SMG Protests AEG Bid In LA

SMG has filed a protest letter against the recommendation of AEG by the Los Angeles City Administrative Officer to manage and operate the L.A. Convention Center, which won’t be finalized by the City Council until at least late June.

AEG lacks the city’s search specifications, SMG said in the letter and reported by the Los Angeles Times, which called for an operator with at least five years of “managing and operating convention or exhibition facilities in similar markets.”

“AEG does not manage or operate any ‘similar facility’ in any ‘similar market,’” SMG Senior VP Gregg Caren wrote in a letter to city officials, according to the paper. “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 also accused AEG of having a “disqualifying conflict of interest,” according to the Times, because it owns JW Marriott and Ritz-Carlton hotels at LA Live, adjacent to the convention center.

AEG spokesman Michael Roth defended the convention center bid, and disputed the conflict-of-interest charge, telling the paper that a company that operates competing convention centers “presents much more of a conflict than a company headquartered in Los Angles with a common interest in attracting those events to this city.”

City Administrative Officer Miguel Santana recommended AEG to the City Council and told the Times officials are satisfied with the company’s track record with overseas convention centers in Australia, Malaysia, Qatar and Oman. He said the city defined “similar” facilities as those with at least 350,000 square feet of exhibition space and 100,000 square feet of combined ballroom and meeting space.

SMG runs about 70 such centers, in California cities including San Francisco, Long Beach, Fresno and Palm Springs. It also operates convention centers in major cities such as Chicago, Houston, Denver and Atlantic City.