Industry Noize: L.A.’s Plan B Hotel

And that prospect has some Angelenos questioning possible conflicts of interest – particularly since L.A. Convention Center officials have alternately suggested building a 1,000-room hotel on the football stadium site as a sort of Plan B. AEG already has a contract to operate the convention center, and owns hotels adjacent to its own L.A. Live nearby.

It agrees another hotel should be built to service the convention center – but two blocks north of, rather than adjacent to, the venue and on AEG-owned land, according to the Los Angeles Times. L.A. Convention Center Executive Director Robert Ovrom says the ideal plan for the city would include a 1,000-room hotel, built on city-owned land, attached to the venue and developed by a private company following a competitive search process, the paper says.

And that location would place the hotel between the convention center and L.A. Live in direct competition with AEG’s Ritz-Carlton and JW Marriott hotels. AEG and the City recently agreed on a six-month extension of the company’s exclusive right to pursue an NFL team to occupy its proposed Farmers Field, in part thanks to AEG agreeing to pay the $750,000 cost of design work on the convention center backup plan.

In exchange, city officials reportedly made sure three of the six alternative proposals won’t include a new hotel immediately next to the convention center, and agreed to put AEG on the city panel that will review the design.

Kathy Feng, head of watchdog group California Common Cause, told the Times the relationship is cozy enough for a potential conflict of interest, particularly when a private company is paying for the design work on a public project that it will have a financial stake in should the hotel come to a council vote.

Ted Fikre, AEG’s chief legal and development officer, acknowledged to the Times there’s “an element of self-interest” for AEG in the hotel debate, but added the company isn’t concerned about a competing hotel. “L.A. Live provides a wide variety of amenities,” he told the paper. “And if those amenities are available to serve convention visitors, they will walk across the street.”

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