The Jackson Memorial's $4 Million City Windfall Dubious

It was cool to hear City Councilman Dennis Zine on news radio this morning discounting the benefit of the purported $4 million tourist-and-shopping stimulus brought by the Michael Jackson memorial at Staples Center in July.

The city paid $3.2 million, mostly in overtime and regular staffing for police, to help the Anschutz Entertainment Group stage the 90-minute memorial, which was aired on television worldwide and featured a variety show-like array of singing and tributes. AEG owns Staples Center and much of the L.A. Live complex downtown and has a 10 percent stake in the profits of Michael Jackson concert film This Is It, which has so far grossed $200 million worldwide (that's $20 millions to AEG if you're counting). The company was also preparing to stage Jackson's 50-date London residency before he died, so it was clearly looking to recoup costs.

The Jackson Memorial's $4 Million City Windfall Dubious
L.A. Live

But the Los Angeles Times, while ignoring the $3.2 million cost story Friday, today headlined a story that stated fans went on a $4 million spending spree during the memorial. Zine discounts the benefit, and so have we: Taxes going to the city as a result of the Jackson tourism amount to a few hundred thousand dollars. And its not necessarily the role of the city to favor events that will bring shoppers to one part of town or another.

The Times today actually states that the memorial show "brought in more money to area businesses than officials paid out in police and other public services costs."

The city report on the memorial costs cites data by LA Inc. showing $1.2 million in hotel spending as a result of the memorial, but it does not say where the rest of the monetary influx comes from. It's dubious. First, hotels are at high season in July. Is the city arguing that bookings were up by $1.2 million over a normal July? And is it saying that many tourists who came to downtown to fawn over Jackson spent nearly four times as much on shopping and eating as they did on $100-plus hotel rooms? They spent nearly $300 on food and tsoskis? Really?

Sure, there were a lot of people downtown (fewer than expected), but consider that there are still few places to eat and shop in the area. A friend of ours who works at an L.A. Live restaurant says it's pretty dead except when there are concerts and Lakers games, and even then a wave of diners comes and goes pretty fast. So where were these people shopping and eating? The hottest items during the memorial were bootleg t-shirts sold by street vendors. Many went for $10 or less.

The notion that the city benefited from the memorial is fishy. It's no secret that AEG boss Phil Anschutz got a sweetheart deal when the city grabbed the land for Staples Center through eminent domain, allowed Anschutz to keep $62 million in bed taxes and gave the Colorado billionaire a $70 million loan.

And it's no secret that Anschutz is cozy with Mayor Antonio Villaraigosa (who had the nerve to ask the public to donate to a fund that would defray the city's cost of helping to put on the memorial). Just after the memorial Villaraigosa held a fundraiser for a pet project, his anti-gang initiative, at L.A. Live. And lobbying firm Sage Advisors, at which AEG has thrown tens of thousands of dollars, has helped to organize fundraisers for the mayor.

So the city spent $3.2 million so that hotels, $10 t-shirt vendors and a handful of restaurants could take in a dubious $4 million? We know, three mil is pocket change for a city government looking at a $100 million spending shortfall. But consider this: The city has been shutting down entire fire stations intermittently to help it cope with its budget. If one person dies as a result of a rescuer not being on duty in their neighborhood, was it worth it for the city to help AEG put on its Michael Jackson show, an event that fanned the publicity flames for This Is It?

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