The deal that helped bring SoFi Stadium to Inglewood isn’t legally valid, judge rules

This story first appeared on The LA Local.

The contract Inglewood’s SoFi Stadium was built on is void, a judge ruled, upending a 10-year-old deal at the center of a larger fight between the city and the stadium developer.

Companies tied to Stan Kroenke and his Hollywood Park stadium property say Inglewood owes them about $400 million under the agreement that had the companies pay for the development’s infrastructure up front in exchange for future reimbursement.

But Inglewood said it shouldn’t have to pay, and claimed the agreement was not enforceable, prompting several businesses that operate SoFi, YouTube Theater and other real estate developments on the site to sue in December 2025.

The city claimed that the process used to greenlight the stadium construction in 2015 was no longer legitimate after a court ruled a similar development agreement in the Inland Empire was void a couple of years later.

Now, Superior Court Judge David Reinert has not only agreed with the city, but said in a Sept. 1 ruling the process leading to the contract had been problematic from the start. Developments similarly based on signature-gathering campaigns that skirt voter feedback had been overturned in the 1990s, according to his ruling.

The order calls into question the future of the financial arrangement the city and the stadium developer have maintained for more than a decade, one that promised Kroenke’s companies reimbursement for the infrastructure and services they paid for and that has generated millions in tax revenue for the city.

It’s also the latest public signal that the once-friendly relationship between Kroenke and Mayor James Butts, which paved the way for the NFL’s return to LA, has grown increasingly tumultuous.

A spokesperson for Hollywood Park said they could appeal the order but haven’t yet done so.

“We respectfully disagree with the Court’s ruling,” they said by email. “Hollywood Park has fulfilled every one of its commitments under an agreement that the City unanimously adopted, described as ‘the best [stadium deal] ever’, and benefited from for more than a decade. We remain hopeful that the City and its leadership will reverse course from their unilateral decision to abandon their commitments under the agreement and will honor their part of the deal.”

An attorney representing Inglewood described it as an important win for the city.

“This decision has huge repercussions for the 300-acre SoFi Stadium/Hollywood Park development,” Skip Miller, lead counsel for the city of Inglewood, said in a press release. “It means that without a valid development agreement, Hollywood Park/SoFi Stadium no longer has vested rights and that the City has no further obligations under the 2015 Development Agreement.”

Butts told The LA Local he wants to negotiate a path forward with the stadium developer but didn’t say if those talks have been scheduled.

“I look forward to talking with them and seeing what we can do to move forward as partners,” he said.

The backstory 

The arrangement that cemented the development agreement in 2015 was: Kroenke’s companies would pay up front for the infrastructure needed to build Hollywood Park, and Inglewood would reimburse them later.

The deal landed Kroenke a new home for the Rams and the opportunity for more real estate development on the site in the future. And it helped the city move forward with reworking the site of the former Hollywood Park Racetrack into one of the nation’s premier stadium complexes.

The reimbursements were designed to be delayed until the city could afford them: When the city earned $25 million in tax revenue from the development in a given year, it would pay down the debt.

Kroenke’s companies say Inglewood owes them about $400 million for those improvements and other investments they made. They claim that the city began surpassing the $25 million revenue threshold in 2022 and each year since.

Butts first told Hollywood Park that he believed the development agreement was void in letters he wrote to Kroenke and his employees last year. He was frustrated that the stadium businesses were fighting the city’s plan to work with an LA advertising agency to install dozens of digital billboards near the stadiums.

The city’s lawyers had found that a similar development agreement had been voided in 2018 and asked that the city be paid back the $20 million in reimbursement payments it made, Butts wrote Kroenke.

The stadium companies sued soon after.

The judge’s ruling

Public projects on the scale of SoFi Stadium typically require a series of hearings, reviews and voter approval — which can take years to achieve. Instead, the stadium developer and city truncated that process by collecting more than 22,000 signatures supporting it.

The City Council voted unanimously in favor of the stadium development in February 2015, and the project broke ground not long after. Butts was a booster of the plan, the LA Times reported at the time. “Now we can celebrate,” Butts said after the winning vote to a cheering crowd in Rams jerseys.

Hollywood Park’s lawyers said in interviews and court filings that the city never questioned the validity of the subsequent contract until last year.

“Its announcement that the Development Agreement is void comes only after the Project was painstakingly built in reliance upon the [agreement], and after the City has reaped enormous benefits from the economic boon created by the project,” Hollywood Park’s lawyers wrote.

State law requires legitimate development agreements to meet various standards. They need to be negotiated between the involved parties, for example, and subject to voter referendum. But the initiative process the city and the developer pursued did not meet those standards. California courts had already found similar agreements “wholly void” dating back to the 1990s, Reinert wrote in the Sept. 1 ruling.

“Therefore, here too, the Development Agreement must be set aside,” he wrote.

Butts said the city was not aware of the legal issues the development agreement could face back in 2015, but he declined to talk more about it because the case could be appealed.

“This is the ruling right now, and we agree with it,” Butts said on Friday.

What happens next

Lawyers for both Hollywood Park and the city released statements saying they remained committed to the success of the stadium development. But how they will arrive at or proceed with a new framework remains unclear.

Hollywood Park said it is exploring its legal options and could appeal the decision. If the ruling stands, the city and Hollywood Park will have to determine what, if anything, replaces the agreement that governed their financial relationship for more than a decade.

The timing adds urgency. SoFi Stadium is set to host the 2027 Super Bowl and the Opening Ceremony of the 2028 Olympics.

Meanwhile, the disagreement over the city’s and stadiums’ digital billboard programs continues. The competing billboard networks have sparked an advertising turf war that has jumped from the courts into the Nov. 3 election.

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