A company seeking to run the Los Angeles Convention Center filed a challenge Monday to the city's plan to hire Anschutz Entertainment Group, saying AEG lacked the experience needed to secure the lucrative contract.
Pennsylvania-based SMG said in a protest letter that AEG did not meet the city's search specifications, which called for a firm with five years of "managing and operating convention or exhibition facilities in similar markets." SMG and AEG were the only candidates in the city's search process.
"AEG does not manage or operate any 'similar facility' in any 'similar market,'" said SMG Senior Vice President Gregg Caren in a letter to city officials. "Indeed, AEG does not operate a single convention or exhibition facility in the United States, and operations in ... Qatar can hardly be considered experience in a similar market."
SMG's letter serves as a formal challenge to the selection process, expected to culminate in a City Council vote later this month. L.A. officials recommended AEG for the contract last week.
AEG representatives did not comment. But city Administrative Officer Miguel Santana said officials were satisfied with the company's track record running convention facilities in other nations, including Australia. "They run major convention centers around the world," Santana said.
SMG also contends AEG has a disqualifying conflict of interest: ownership of hotels at the nearby L.A. Live entertainment complex. In his letter, Caren pointed to the city's conflict-of-interest code, which bars city employees from making decisions on matters that affect their personal financial interests.
Santana said he did not believe that provision applies to city contractors but noted that his office is double-checking with the city's lawyers.
AEG has been a major player in Los Angeles politics, giving generously to an array of candidates and city ballot measure campaigns. The company and its former executive, Tim Leiweke, provided more than $127,000 to the City Council's failed bid to hike the city's sales tax earlier this year.
AEG also provided $50,000 to Working Californians, a campaign group that provided major financial support for mayoral candidate Wendy Greuel and other contenders in this year's election.