Tim Leiweke, chief executive of the sports and entertainment empire AEG, has been involved in some big deals. But no project compares with the challenge of building a convention hotel, he told a group of city leaders on Tuesday.
"Hardest project I've ever done in my life. Period," Leiweke said.
Standing in the seating bowl of the Sprint Center, which AEG manages, Leiweke talked about the $965-million convention hotel AEG is building in Los Angeles. AEG made the "big bet," as Leiweke called it, in order to maximize its investments in downtown L.A. AEG operates the Staples Center (home of the Lakers), the Nokia Theatre (site of the recent Emmys) and the L.A. Live entertainment district.
Leiweke addressed the members of the city's Convention Hotel Steering Committee. He encouraged city leaders to find a way to make a 1,000-room convention hotel happen. At the same time, the man who guaranteed the Sprint Center an anchor tenant warned: "This project is not for the faint of heart."
AEG and its lenders took on the risk of building the convention hotel in Los Angeles. Public financing was not an option, Leiweke says, because L.A. is so broke.
"They're trying to stay out of bankruptcy," he said.
Leiweke said the 54-story hotel, set to open early next year, will enable L.A. to recapture convention businesses being lost to San Diego and Las Vegas. Omaha is outperforming L.A. as a convention destination, Leiweke said.
Tourism officials in Kansas City say a 1,000-room hotel is necessary to keep Bartle Hall competitive. Such a building will require substantial public assistance. No private developer will take on an endeavor similar to AEG's deal in L.A. There, AEG is counting on the sale of 224 condominium units inside the hotel to raise $450 million. "Our model probably doesn't work anyplace in the world -- maybe London," Leiweke said.
The setting of Leiweke's talk was itself an object lesson in risk.
AEG has not been able to fulfill its promise to bring an NHL or NBA team to Kansas City. At the same time, the Sprint Center has kept Kansas City in the rotation of Big 12 and NCAA basketball tournament sites. AC/DC is coming back nine months after its last appearance.
And the building operates at a profit. Leiweke said the Sprint Center returned $1.8 million to the city over the last two years.
Leiweke, who's taken abuse for not delivering the winter sports team he said he would, joked that AEG should present a check to city officials.
Comments (0)