LOS ANGELES - Entertainment company Anschutz Entertainment Group, one of two firms looking to take over management of the Los Angeles Convention Center, could be knocked out of the running after executives failed to open their accounting books to city officials, according to a report today from City Administrative Officer Miguel Santana.
The City Attorney's office has recommended AEG be disqualified from the competition to run the convention center, Santana said.
On March 18, Santana sent a letter to AEG, informing the company that it has been deemed "non-responsive" after requests to provide documents attesting to the company's "financial sustainability" were ignored.
Santana said in today's report that the company's failure to offer up financial information "is not a technical informality but rather goes to the issue of whether a company has the resources to manage the facility."
AEG failed to provide three years of balance sheets, income statements, cash flow reports, and stockholder equity information, as well as credit history, a credit report, a recent quarterly financial statement and tax returns, according to Santana.
In their application, AEG executives said that as a privately held company, they cannot release financial information.
In a letter last Thursday, the company's executives asked to meet with the city to resolve the issue. Santana said granting the meeting would constitute preferential treatment.
In the letter, the company's Vice Chairman Ted Fikre cited the "successful execution" of previous projects with the city, including Staples Center, hotels near the convention center and L.A. Live.
"It was always our intention to provide requisite financial information, but ... we felt there was a lack of clarity regarding precisely which information was necessary," Fikre wrote.
The possible disqualification comes as the city is revising a deal inked last fall with AEG to renovate the convention center and bring an NFL team to Los Angeles.
Efforts to attract a football team were delayed when plans to sell AEG were called off and after the company's president Tim Leiweke announced he would be stepping down.
Santana has asked that the City Council give direction on what to do next.