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L.A. City Council is set to rule on whether AEG should cover cost of Jackson's memorial

Some critics are skeptical that the panel will press the firm to help pay for police and cleanup because the promoter has been a reliable source of campaign contributions.

December 06, 2009|By David Zahniser and Phil Willon

After nearly six months of study, the Los Angeles City Council is poised to decide this week whether Anschutz Entertainment Group should help taxpayers cover the public cost of Michael Jackson's downtown memorial ceremony at Staples Center.

And if AEG steps forward with a check, it will be the latest move by the Jackson promoter to help the city's elected officials out of a jam.

When the council sought voter approval of a $1-billion affordable-housing bond in 2006, AEG and its affiliates contributed $75,000. When Mayor Antonio Villaraigosa needed help with a telephone tax measure two years later, Tim Leiweke, AEG's president and chief executive, gave $100,000 and urged other businesses to do the same.

And when council members faced the prospect of being ousted by term limits, the company and its affiliates stepped forward with more than $137,000 -- becoming the biggest single donor to the ballot measure, which gave council members the ability to run for a third term. Had that measure been defeated, five council members would now be out of office, and four others would have to leave in 19 months.

Because of those donations, some critics are skeptical that council members will press AEG, which runs both Staples Center and the nearby L.A. Live entertainment complex, to help defray the city's $3.2-million cost to police and clean up after the July 7 memorial.

"I don't believe they can separate themselves" from the campaign contributions, said Lisa Sarkin, who serves on the Studio City Neighborhood Council.

Two council committees are scheduled to meet Monday to discuss the cost of the memorial, which was televised around the globe and ended with the message "All Rights Reserved" by AEG. Last summer, the city's involvement in the event sparked criticism from taxpayers, in part because the city was facing a $400-million budget shortfall.

Councilwoman Jan Perry, whose district includes Staples Center, acknowledged last week that AEG is a player in Los Angeles politics. But to view the company exclusively through that lens misses the larger picture, said Perry, who praised the company for giving generously to charity, transforming a decaying section of downtown and providing much-needed jobs in an economic downturn.

"AEG doesn't own the place . . .I think that's a really stupid way to think," said Perry, who would have been forced from office in June had the term limits measure been defeated.

AEG declined to comment for this report. But in previous interviews, AEG officials have said they are politically active because they want to make Los Angeles a safer more economically healthy city.

Leiweke told The Times in October that the city needs clearer policies regarding reimbursement for major events. "But as it relates to this particular incident, we followed the lead of the" Los Angeles Police Department, he said.

The council established a new policy in September that states the city has sole authority to set the level of services it provides to Staples Center, Dodger Stadium and other major venues and events. If organizers for those venues and events want a higher level of service, they must negotiate the exact terms with the city, according to a city report.

In the case of the Jackson memorial, city officials planned for a large event after learning that the website offering free tickets to the event had gotten more than 500 million hits and crashed. The LAPD deployed 3,968 officers between 6 a.m. July 6 and 6 p.m. July 7 -- the vast majority of them to the Staples Center area. By comparison, 2,642 officers were deployed to the Lakers' NBA championship parade. Because the Lakers play at Staples Center, AEG raised money to cover the $900,000 public cost of the parade after citizens complained that the city would be stuck with the tab.

An economist with the Los Angeles County Economic Development Corp. said he thinks the Jackson memorial created a counterbalance to the city's expense by generating $4 million for restaurants, hotels and other businesses. But the organization did not conduct a formal study into the matter.

Jackson unexpectedly died as he was preparing to begin a new concert tour being promoted by AEG.

City Councilman Dennis Zine said he would like AEG to reimburse the city for at least $1.5 million because the company sold the rights to the concert tour's rehearsal video to Sony Pictures for $60 million. That footage was used for the recent feature-length film "Michael Jackson's This Is It."

Zine, who has criticized AEG over the memorial, said council members are not beholden to the company in any way. "I would believe there is enough integrity on the City Council that contributions by AEG would not interfere with our responsibility and obligation to the taxpayers," he said.

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