AEG drops plans for hotel near LA convention center

(Los Angeles Convention Center)

A planned 755-room hotel near the Los Angeles Convention Center may not see the light of day. Anschutz Entertainment Group, a sporting and music entertainment provider, said Thursday that it is canceling plans to build the hotel on Los Angeles’ Olympic Boulevard.

The cancellation comes as the city reveals plans of its own to update the convention center, adding in an on-site hotel. AEG spokesman Yusef Robb said in a statement that the company’s project, which was first announced in March 2015 and would have consisted of a high-rise Marriott hotel, would be in direct competition with a 1,000-room hotel to be built on convention center property.

AEG has close ties to Los Angeles’ convention business, and made agreements with the city in 1997 giving AEG rights to use convention center parking garages, walkways, driveways and more for its Staples Center arena and L.A. Live projects. In seeking out a taxpayer subsidy to build its now-abandoned Marriott property, AEG would have had to relinquish a selection of the rights granted from the 1997 agreement, according to company officials.

“We believe the proposal for a second convention headquarters hotel is a fundamental violation of the deal entered into by AEG and the city, and would deprive AEG of the benefit of the agreement it negotiated with the city," AEG vice chairman Ted Fikre wrote in a statement.

In the same statement, Fikre accused Los Angeles of attempting to “usurp” L.A. Live as the city’s primary choice for a convention hotel. “The development of a second headquarters hotel was not a part of the deal when the city insisted that AEG build a convention headquarters hotel,” Fikre wrote.