LA Livid: AEG sues county over Microsoft Theater property tax bill

Entertainment giant alleges venue at LA Live is worth far less than its assessment

Los Angeles /
Nov.November 06, 2020 08:00 AM
AEG CEO Philip Anschutz and Microsoft Theater (Credit: Shaun Clark/Getty Images and Tibrina Hobson/Getty Images)
AEG CEO Philip Anschutz and Microsoft Theater (Credit: Shaun Clark/Getty Images and Tibrina Hobson/Getty Images)

L.A. Live’s landlord is suing Los Angeles County over its property tax bill, months into a pandemic that has decimated the Downtown entertainment scene.

Anschutz Entertainment Group filed the suit this week, claiming a $72 million disparity between the amount the county assessed the property, and what AEG thinks the 235,000-square-foot Microsoft Theater at L.A. Live is worth. The 45-page suit was filed in L.A. County Superior Court.

County Assessor Jeffrey Prang’s office concluded the Downtown property is worth $101 million, taxing AEG based on a 2007 assessment after the 7,100-seat performing arts venue was completed.

But Los Angeles-headquartered AEG claims the venue’s income estimates were incorrect, and is contending the Microsoft Theater should have been assessed at $29 million.

The lawsuit comes as AEG’s L.A. Live complex went from the epicenter of the downtown entertainment scene — hosting sporting events, concerts and awards shows — to being largely deserted since the onset of the coronavirus.

The filing does not mention the pandemic but instead delves into the details of the 2007 property assessment.

Under California law, commercial properties are only assessed when purchased or have undergone what county assessors deem a significant renovation. (A ballot measure to change that, Proposition 15, appeared headed for a narrow defeat.)

When construction was completed on Microsoft Theater in 2007, the county assessed not only the value of the venue but its draw as an entertainment center. The assessor, for example, drew information from entertainment trade publication Pollstar to estimate the income that Microsoft Theater’s music and comedy shows may generate.

AEG argues that the assessor erred in its income estimate approach. It also claims the county unfairly added the money AEG generates from Microsoft’s naming rights and other corporate sponsorships. Such naming rights are a “non-tangible asset,” the lawsuit contends.

In April, AEG filed plans for a 160-key hotel near L.A. Live and the Staples Center, which it also owns. AEG is still working the city on a $1.2 billion overhaul of its entertainment and event properties, which would add hotel rooms and integrate the L.A. Convention Center with the Staples Center and L.A. Live.


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