AEG announces agreement to pay $1.3 million to help cover cost of Michael Jackson memorial

An entertainment conglomerate and the estate of Michael Jackson have agreed to donate $1.3 million to the city of Los Angeles to help cover most of the costs of last year’s memorial for the international recording artist at Staples Center, officials said Friday.

Anschutz Entertainment Group, which hosted the Michael Jackson Memorial at its Staples Center and Nokia Theatre properties in downtown Los Angeles, announced the deal Friday in conjunction with Mayor Antonio Villaraigosa.

The accord would seem to end a controversy that has simmered for almost a year over how much the cash-strapped city should have paid to provide police and other services for the tribute.

The Lakers have already agreed to pick up their tab, estimated at $1.5 million, for a massive parade scheduled for Monday to celebrate the team’s second consecutive NBA championship. A dispute erupted about the hefty public costs of similar services provided for last year’s Lakers parade.

City officials have sought pledges of donations since there is no clear-cut legal requirement that private companies chip in for police overtime and other costs associated with large-scale civic happenings. Other cities have also grappled with the dilemma of how to finance services for spectacles that draw large crowds.

The AEG donation — $1 million for the city’s general fund and an additional $300,000 for crime-fighting equipment—is meant to cover police services, trash pickup, traffic control and other costs stemming from the late pop icon’s star-studded tribute last July 7 at a packed Staples Center. An overflow crowd watched on screens at the Nokia Theatre across the street.

Some public estimates of the city tab for the tribute have topped $6 million; one report to the City Council put the cost at $3.2 million. A city study last year also found the event may have brought in some $4 million in additional revenues for hotels, restaurants, taxis and other businesses. But Miguel Santana, the city administrative officer, said Friday that the additional cost to the city was about $2 million, mostly in overtime payments for police, sanitation workers and traffic control officers. The donation of $1.3 million will cover the bulk of those costs, he said.

“I applaud this team effort and thank everyone for doing what was best for the people and the city of Los Angeles,” Villaraigosa said in a statement distributed by AEG.

The mayor and Timothy J. Leiweke, AEG’s president and chief executive officer, jointly reached the accord, officials said.

“This was not an obligation but a choice we believed was important to make at a time when thousands of city employees are being reduced,” Leiweke said.

Controversy about the public price tag has persisted since the event, which was televised worldwide and ended with the message “All Rights Reserved” by AEG, one of the world’s leading entertainment and sports concerns. The well-connected, L.A-based firm — a major political contributor in Los Angeles — was also promoting the new concert tour that Jackson was planning at its The 02 arena in London before he died unexpectedly after being rushed to a hospital from his mansion in Holmby Hills.

Taxpayers and others objected to the city spending extra money on the lavish memorial at a time when it was facing a $400 to $500 million budget shortfall and contemplating layoffs and deep service cuts.

The dispute carved deep divisions between AEG and City Atty. Carmen Trutanich, who also quarreled with company executives about their plans for new billboards outside movie theaters at the company’s L.A. Live project.

An outraged Trutanich said last year that he had launched a criminal inquiry in connection with the city funding of the tribute. “We wasted a lot of dough on the Michael Jackson memorial,” Trutanich declared at the time.

Leiweke told The Times editorial board last year that Trutanich tried to “bully” him into ponying up some $6 million for tribute-related expenses.

But on Friday Trutanich declared he was delighted with the resolution and said his “exhaustive” criminal inquiry had failed to turn up any evidence of a crime.

“This is an appropriate and complete resolution of the issue,” Trutanich said.

The city attorney lauded Leiweke as “a tremendous human being in terms of his caring for the city.”

The AEG president, in turn, said Friday’s accord would “now allow us to finally put this issue behind us.” He offered “special thanks” to Trutanich and said he had developed “a very positive relationship with him and his office.”

Trutanich declined to say what the potential “criminal aspects” of the issue might have been or who his inquiry may have targeted. He called those confidential law enforcement matters.

Under Friday’s agreement, the city’s general fund — which pays for basic services such as public safety and parks — would receive $1 million. An additional $210,000 will be provided to the Los Angeles Police Foundation to pay for LAPD equipment, including scanners to be used by police patrolling skid row, officials said. AEG already contributed $90,000 raised through sales of suites at the Jackson tribute.

Times staff writer David Zahniser contributed to this report.