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City News

Did City City Hall Just Give Staples Center A $1 Million Gift? In This Economy?

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Mon, Jun 21, 2010 at 6:06 AM

click to enlarge ZEREGA VIA FLICKR
  • zerega via Flickr
It's a question that's been lingering, so we decided to try to answer it. If the city spent nearly $3.2 million to help Staples Center put on its Michael Jackson memorial, why did Anschutz Entertainment Group, the company that owns Staples, recently announce that it's ponying up only $1 million to cover the city's costs? And who came up with the number? We asked a high-ranking city official who indicated that it was not a figure that came from City Hall, which maintains, at least through its own documents, that the cost hasn't changed.

A call to AEG's spokesman was not returned. The $3.2 million figure, however, stands as the official amount you, the taxpayer, spent to help AEG, a billionaire-controlled entertainment company with a for-profit stake in Michael Jackson's legacy (including a portion of the proceeds of his posthumous concert film This Is It) stage its July 7 concert/memorial.

Interestingly, a statement from AEG indicates that "Mayor Antonio Villaraigosa and AEG President & CEO Timothy J. Leiweke" had "jointly reached the accord" on what the company characterized as a "donation" but would, in any other circumstances, simply be partial payment for services rendered. In fact, if the city's own policies on the matter are taken at face value, AEG still owes L.A. at least another $1 million. (The announcement stated that the estate of Michael Jackson was also contributing money as part of the "accord," but it did not indicate the portion).

And it's not clear that the mayor has the jurisdiction to say otherwise or to reach any kind of accord that would dodge L.A's own official rules when it comes to special events.

If the city's policy is to be believed, then Friday's announcement was really a matter of the public giving a $1 million "donation" to a private corporation (although it wouldn't be the first time AEG has gotten a good deal out of City Hall).

You see, the cost to the city over and above what it would have normally spent on staffing the area around Staples Center that day would have been about $2 million -- mostly overtime, mostly for police.

According to the city's own "special events" policy, passed by the council in 2008, organizers are big happenings like the memorial are "required to negotiate with the city to clearly define the services which will be necessary, and payment for all the services beyond which the city would have provided as a matter of course will be required."

But a memo by the city's chief legislative analyst notes that "a contract between the city and AEG for municipal services for the event had not be negotiated and executed" for the memorial.

Interestingly, according to city documents, "the city was informed that a memorial service for Michael Jackson would be held at the Staples Center" on Thursday, July 2, a day that would have made it almost impossible for the City Council to address the issue before the event on July 7 because of the Forth of July holiday.

Responding to criticism about the public cost of staging the private party, the council in October approved an ordinance covering special events that states "applicable fees and charges, including salary costs, equipment and material" for such happenings "will not be subsidized" and that "any event that the sponsor can reasonably foresee to require a higher level of public safety ... than normally provided by the city, will be responsible for ... payment of all fees, charges and salary costs for all such [city] services."

Why this doesn't apply to AEG is beyond us. Why would the mayor enter into an "accord" that directly defies the city's own rules?

In the case of the Jackson memorial, more than one-third of the LAPD, 3,968 officers, were deployed in and around Staples Center because as many one million fans from around the world were expected to show up for the event. (Aside from the 17,000-plus fans granted free tickets to the event, the crowds did not materialize, and the Weekly's own eyewitnesses could barely count a few hundred people out side the venue. During the event the LAPD rapidly told officers who were working overtime to go home).

It appears from city documents that AEG unilaterally hoisted this event upon the citizens of L.A. -- without time for the council to take up the matter. The LAPD, which has arguably less officers on the streets as a result of overtime and civilian budget cuts, was left to scramble for ways to get nearly 4,000 cops around Staples.

As part of its "accord," AEG has also agreed to give $300,000 to the L.A. Police Foundation.

AEG boss Leiweke said, "It was important to us that all parties agreed that this was not an obligation but a choice ... ."

We're not so sure all parties really did agree. After all, your pocket might have just been picked by a very rich company, you didn't really have a representative at the table when this back-room deal was worked out, and you're the most important party of all -- the taxpayer.

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