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Hoodwinked at City Hall or Co-conspirators? AEG Selling Out to Profit from Stadium Deal; LA Only Gets the Bills

“This was always part of the game plan. It’s the right time for Mr. Anschutz to find an exit strategy.” — Tim Leiweke, CEO of Anschutz Entertainment Group, on the global sports and entertainment company being put up for sale days before final city approval of the Farmers Field/Convention Center deal in downtown LA.

Mayor Antonio Villaraigosa said he has “known about this potential sale for some time,” but felt no need for the public to know because he’s got a “commitment from both” Leiweke and Anschutz that the NFL is coming back to LA and the deal “will not affect my support for moving ahead with Farmers Field and the Convention Center site.”

Really?

Councilwoman Jan Perry, the mayoral candidate and point person for the deal, is just as sanguine, saying: “Whoever steps into the shoes of the previous owner would have to fulfill all the responsibilities and obligations as the current owner.  The city has been well-negotiated and well-protected.”

Really?

Throughout the mad rush to exempt AEG from state environmental law, to short-circuit the city approval process and to make this just about football and not a major investment in LA’s future, Leiweke and AEG representatives have rested their case as an issue of trust.

With generous public subsidies, AEG built the the spectacularly successful Staples Center and then added the hideously artificial LA Live with its struggling hotel-condo towers and lived up to all their promises, the AEG team argued over and over.

Trust AEG — that was why their transit plan is nothing but a bunch of unenforceable goals, why their commitment to pay all workers the “living wage” amounts to only an 80 percent target with a $25,000 penalty if it isn’t achieved after five years of operation, why everything in the development agreement is vague and left to be worked out after the fact.

Yet, the City Council is set to rubber-stamp it in nine days, surrendering all power to AEG, a company that is going to cash in handsomely on the value added by its masterful manipulation of the process with the help of the politicians it bought.

Consider how they got their CEQA exemption by throwing millions of dollars around the state Capitol for lobbyists and to fill the coffers of dozens of politicians.

Among the 40 or so recipients identified back in early 2011 were  Sen. Alex Padilla, D-Pacoima, $10,100; Assemblyman Gil Cedillo, D-Los Angeles, $8,100;  Sen. Kevin De Leon, D-Los Angeles, $5,300; Assemblyman Bob Blumenfield, D-Woodland Hills, $4,000;  Assembly Speaker John Perez, D-Los Angeles, $3,600, and the Moorpark Republican team of Sen. Tony Strickland $10,500  and Assemblywoman Audra Strickland $7,300.

AEG bought off environmental groups and charities like the Midnight Mission and Salvation Army, turned this into a chance for LA to turn its white elephant Convention Center that devours $45 million or more a year into a smashing success and transform downtown into a digital billboard paradise for millions of tourists housed in 5,000 new luxury hotel rooms.

What’s horrifying about this, revealing just how deep the corruption runs in the leadership of the city, is that AEG didn’t hoodwink anyone into buying this deal if Leiweke and the mayor are to be believed — admittedly a big “if” to be sure.

This was always part of the game plan!

In the light of AEG’s scheming to cash in on huge bonus the “Events Center” provides, the development deal needs to be thoroughly scrubbed by independent lawyers and experts from out-of-town who have no connection to any of the interests involved.

This isn’t like any deal ever put together before. It was written by AEG itself with some minor tweaking by city bureaucrats who have no experience in matters of this sort.

It isn’t good enough that AEG and its successor gets all the profits and the people of LA get all the bills. That’s what has been wrong with the deal from day one.

The Convention Center will still be a massive drain on the general fund. Nearly all the infrastructure costs and support services needed to keep this from being a “carmageddon” fiasco on game and event days will be paid for by taxpayers. All the profits from dozens of digital billboards trashing the vista and night sky go to the owners and so does all of the profits from operations and most of the tax revenue.

Someday when those involved in this dirty deal are free to talk honestly and openly about what has transpired, we will know the truth about one of the greatest scandals in city history, the Great Farmers Field Ripoff.

This entry was posted in City Hall, Development/CRA, Hot Topics, Los Angeles, NFL Stadium and tagged , , , , , , . Bookmark the permalink.

21 Responses to Hoodwinked at City Hall or Co-conspirators? AEG Selling Out to Profit from Stadium Deal; LA Only Gets the Bills

  1. Anonymous says:

    Where is the FBI to investigate this corrupt deal?

  2. Ricardo says:

    Every neighborhood council needs to immediately send in a NO SHOW OF SUPPORT. This is as corrupt as it gets in City Hall. Can’t we file ethic violations on all of them? How can they vote to approve the NFL stadium not knowing who is going to run the entire AEG side? The tax payers of Los Angeles are going to get stuck holding the bag on millions for this fiasco.

  3. Ricardo says:

    AEG eyed by L.A. billionaire Patrick Soon-Shiong. So they all were in cahoots about this sale. Is this the reason why JAN PERRY wanted the deadline moved from 29 days to 10 days so the public wouldn’t find out?????? There has to be some type of crime in this whole mess.

  4. ex valley says:

    Just think–if the staple center and la live are so profitable, why’d aEG want to sell them? If LA had any investigative journalists, would be interesting to find out the real story.

    Maybe the city is getting close to bankruptcy and AEG does not want to be there anymore.

  5. LA Moderator says:

    My guess that Soon-Shiong is a decoy…I don’t think the Broad/Burkle/Billionaire Buddies are through monopolizing L.A.

    This would just complete the groundwork for the long awaited merger between L.A. Times/Staples Center!

    (Thank Golem for the Guggenheims!)

  6. Teddy says:

    “Where is the FBI to investigate this corrupt deal?”

    I want to know why the FBI has let it go this far – Ron Kaye
    has done all the down and dirty work on this outrageous
    story.

    It is many months.

  7. anonymous says:

    this is hilarious…
    but don’t laugh darlings…
    the worst is yet to come…
    courage, pay attention, prepare to suffer…

  8. LA Moderator says:

    Oldest trick in the developer’s book is to get your entitlement while you can, and if you don’t have the stomach to see it through, sell it!

    Just like the Lloyd’s lawsuit, the old man is forcing his lieutenants to cut bait.

    I just love how what started as a Community college credit transfer bill, and was completely usurped by the urgent business of making AEG’s boondoggle rush through the rubber stamp department.

    http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0251-0300/sb_292_bill_20110902_amended_asm_v94.html

  9. Wayne from the most corrupt City ever since man emerged from the caves and cooked meals says:

    The NFL WONT give Farmer’s Field a team! But….the Downtown Mafia will build the Stadium and new Convention-Clown Centre ANYWAY PRAYING FOR A TEAM! WANT TO SEE WHAT WILL HAPPEN—GOOGLE “TROPICANA FIELD.” You’ll learn what Tampa Bay did. They build an indoor baseball stadium WITHOUT A TEAM, then got one 10 years later AND THEY CAN’T DRAW 10,000 FANS A GAME! The design of the stadium will NOT be for BASEBALL/FOOTBALL as it should be. The “Game Plan” as Lie-Weekly calls it is for GUGGENHEIM/MAGIC Scumbag Johnson and Co. to buy up AEG and pull the swicher00—Move the Dodgers to the Farmer’s field then TEAR DOWN DODGER’S STADIUM AND BUILD THE FOOTBALL STADIUM UP IN CHAVEZ RAVINE. BUT THE CLOWNCIL is set to vote in A FOOTBALL-ONLY STADIUM! This will SET BACK THIS SCHEME 10 TO 20 YEARS BACKWARDS!!!
    The only hope next week for Corruptopia is for the Clowncil to BACK OUT OF THE STADIUM DEAL and await the AEG sale. Then they could redesign the stadium for baseball. As much as I hate the stadium deal: making it an indoor retractable roof NATURAL TURF baseball stadium WOULD BE THE FINEST BASEBALL STADIUM IN THE NATION and a hit with sold out Dodger games. The Hotels around the L.A. Live would get serious use. A football stadium there by the 110—STOOOPID!

  10. Sierra says:

    We may get lucky and no NFL team will come to LA and the stadium won’t be built.

    But then will the new/old AEG still want sweetheart deals on billboards, land use entitlements, and the new convention center?

    • LA Moderator says:

      Don’t get me wrong…I for one am pro nfl…as long as the Coliseum is not gutted of the Peristyle (or USC home game 94,000 seat capacity) and the option of dropping back in an Olympic track.

      But AEG has only diversified in this market this much because CRA money was theirs to be had…so maybe sb292 was Brown’s consolation prize.

      But all this means that this project is on the ropes! Soon-Shiong and other ligit players will be scared off by the mayor’s “a deal is a deal” sound bites. This isn’t what Anschultz had in mind when this division started burning bucks for political capital.

      There is a real opportunity, RIGHT NOW, to pull out all the stops for the next hearing.

      Sticklands and the Dems are trying to present themselves as pro jobs, but it’s whitewash.

      Challenges to CEQA will not go away easily, and if there’s a chance in h e double hockey sticks that things don’t get nailed down at the horseshoe, AEG will throw in the towel on this, so that the overall value of the (overly)vast portfolio doesn’t poison the well for potential buyers.

  11. KS says:

    What’s crazy to me is that these cheap effers can actually be bought off for a measly $10k. If this were Chicago or NY, you’d have to add some zeroes somewhere.

    • LA Moderator says:

      I was learning about CEQA – and the implications of pursuing challenges – in 1985, from a brand new small suburban city mayor…who I’m currently supporting for a final State Senate term.

      A small group of neighborhood activists…HOA folks mainly, sat in my folks living room, and determined that the risks of the lawsuit’s failure wasn’t worth pulling second mortgages for a bond, which was what would literally be required to stop the bulldozers. They chose to lose that battle (and interestingly, a handful of ugly tiltup concrete buildings, one now housing a Farmers Insurance hub) but went on to keep winning the war of local control…until most of the true believers passed on.

      That Senator is not on the Examiner’s list, but I do see an Aye vote when this thing went through.

      It sickens me…and I’m sure there are extenuating circumstance, whither the political realities of back-scratching or above stated concerns about creating jobs…but for CEQA to be thrown under the business, just like the Brown Act being whisked away here and there, under the guise of cost savings?

      Let’s not settle for losing this battle.

      4th and short yardage…they’ve had the legislature and downtown blocking for them…the referees (media) are distracted.

      But can we stiffen our line, and repel this onslaught?

  12. Oh, Gee, I'm shocked, Just shocked -- Not says:

    What’s the big fuss about? The city engaged in another criminal fraud to fleece the tax payers, and the thieves with whom they’re doing business cashed out early. That’s one mark of a Control Fraud — where the business fraudulently hypes how great its business is doing through a lot of lies and accounting fraud, but it evades all risk by dumping the project on some sap. (The AEG Stadium will probably turn out to be a bigger real estate write off than Hollywood-Highland at over $400 Million.)

    Garcetti has perfected this type of fraud many times over in Hollywood — which is one reason that the exodus from Hollywood increased by 400% since Garcetti has become Princelet of the Fiefdom formerly known as Hollywood. He has also decimated what was left of the entertainment business in town.

    But here’s where the incompetent crooks at City Hall may have done themselves in — while AEG will recoup the loot it has spread around to all the corrupt councilmembers and state legislators, what if the new owners, want to install their own lot of corrupt politicos and not support The Princelet.

    Let’s face it, if you’re a billionaire out to buy yourself a mayor, do you really want to buy such defective goods as Garcetti -

    * who got AB 2531 vetoed, (Hollywood help get Gov Arnie to veto AB2531)

    * who got the CRA abolished, (Sacramento pointed to Garcetti’s excesses as reason to kill CRA’s)

    * who got the Hollywood Plan sued in 3 different lawsuits, (after City Planning adn City Attorney told Garcetti to withdraw the Plan)

    * who was caught with the falsification of the LAFD responses times, (we do not know how many Angelenos have died due to his cutting $200 M from LAFD based on his “accounting control fraud”)

    * who had one of his own Neighborhood Councils call for a Federal Grand Jury to investigate his dealings with the fire department and developers, and

    * who has has turned Hollywood backwards towards its slum days???

    Yep, that’s surely what the billionaire wants — a mayor who’s so incompetent that he has lead the Feds right to their door step their various forms of “control frauds.”

    Welcome to LA AEG buyers, “Go Directly to Jail, Do not pass Go, do not collect $200.”

  13. Anonymous says:

    “What’s crazy to me is that these cheap effers can actually be bought off for a measly $10k. If this were Chicago or NY, you’d have to add some zeroes somewhere”. But who pays for the Mayor’s fine wines, dining and expensive suits? Just wondering.

  14. anonymous says:

    see Ron’s post of 08/29/12…
    well now…this gives a significant twist to
    Durazo’s /Unions’ assertion that AEG also
    supported “extension of living wage ordinance citywide”…
    inside-backroom- negotiations-memos of understanding-
    deals-trade-offs-sell-outs…AEG, Unions and LA politicos…
    do you understand…?

  15. Anonymous says:

    Here is a hilarious interview with the Politburo Chief Villar–LA Times

    “SMITH: You’re saying that whoever buys the team, or AEG, is going to have to live with the deal that’s negotiated. But [budget official] Santana never knew that AEG might be sold –

    VILLARAIGOSA: I’m the mayor. I knew.

    SMITH: Right, but perhaps –

    VILLARAIGOSA: I’m the mayor and I knew.

    SMITH: OK, but –-

    VILLARAIGOSA: Let me be clear about something: I’m the mayor and I knew”.

  16. pissed off says:

    And where is the charlatan? On CNN with his Latino bromides. Rome is burning and Nero, hmm not bad comparison , is having a good time.

  17. Anonymous says:

    Where is the outrage? Mayor Villar ego sa should be forced to resign. He represents AEG’s interests-not the citys’.

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