Did L.A. Benefit from the Jackson Memorial?


AEG, the entertainment conglomerate who might be on the hook to reimburse the city's costs for the downtown Michael Jackson memorial, likes to say the city made $4 million from the event. But no one's really sure.

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Details on the controversy from L.A. Weekly:

Jack Kyser, chief economist at the Los Angeles Economic Development Corporation, told the Weekly that he came up with the $4 million estimate just two days before the memorial at the behest of city officials and LA Inc. -- the Los Angeles Visitors and Convention Bureau.

"We had to put our heads together very quickly," Kyser says. "So we put together an estimate on people traveling to the city, use of hotels, limos, shopping, and who would come in on private planes. We came up with a rough estimate before the memorial. We were asked to do this very, very quickly."

There is now plenty of reason to doubt Kyser's quick, back-of-the-envelope guesses:

Kyser says he based his $4 million estimate more on the hoped-for spending by high-dollar celebrities who would come to town, stay at posh hotels, fly in on expensive charter planes, and eat at high-end restaurants while mourning for Jackson. Many of the celebrities listed as official guests, however, already live in or near Los Angeles. Even an AEG official said that "people who travelled here from around the world were in town anyway" to give their last respects to Jackson.

Meanwhile, anecdotal evidence suggests that there was little basis for Kyser's $4 million estimate. LA Inc.'s own hotel occupancy figures found that stay-over rates in Los Angeles during July actually dropped by 9.5 percent over July of 2008.

The Weekly's story goes on to quote local airports and area businesses all denying they saw much benefit from the Jackson event downtown at Staples center, and to note that if existing accepted estimates of the entire Staples Center's economic benefit to L.A. are to be believed, then this one event allegedly represented 11 percent of the entire year's benefit of Staples existence, which seems unlikely.

The L.A. Times has details on how AEG has been local politicians' best pal, making it doubtful the city will decide to stick AEG with the bill for its own Michael Jackson event, a question the City Council will be pondering this week:

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.

AEG sold footage from Jackson's Staples Center rehearsals to Sony for $60 million for the movie This is It.

Past City of Angles blogging on the politics of the MJ memorial.

And let's take a moment to remember what all the MJ fuss was about, before the political wrangling set in:

The image associated with this post was taken by Flickr user tommy.chang. It was used under user Creative Commons license.

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