The company that produced a favorable report on the economic impact of the Angels, which city officials have touted as they mull a controversial new lease framework for Angel Stadium, is related to another company that won the baseball team’s food and beverage concessionaire contract soon after the report’s release, records show.
Anaheim officials last year contracted with Conventions, Sports & Leisure International, LLC (CS&L), a subsidiary of New York-based Legends Hospitality Holding Company, LLC, a firm co-owned in part by the Dallas Cowboys and New York Yankees, to perform the study on how the Angels impact the city's economy.
CS&L's report on the study claimed the team generates more than $200 million in annual economic benefit within the city limits.
This finding played a central role in the Anaheim City Council majority’s justification for a proposal to give team owner Arte Moreno development rights to 155 acres of city-owned land surrounding the stadium with the idea being that Moreno would use revenue from the development to finance up to $150 million in stadium renovations.
“The economic impact is probably the No. 1 factor” in wanting to keep the team, Councilwoman Lucille Kring told The Orange County Register last year.
However, while this study was being conducted, Legends Hospitality, LLC -- another Legends subsidiary -- was being considered for the baseball team's food and beverage concessionaire contract. Legends Hospitality announced that it was chosen for the contract just two days after a CS&L consultant made a glowing presentation to the City Council about the team's economic benefits.
This relationship was first revealed by "Anaheimer," a Voice of OC commenter. A good government expert says it raises conflict of interest concerns.
“The question obviously is, are they being rewarded for their report?” said Bob Stern, president the Los Angeles-based Center for Governmental Studies. “And why are they having a relationship with the Angels at the same time, right after they’re supposedly doing a nonpartisan, or non-biased report about the impact?”
Stern added, “the question would be to them: What were you thinking?”
In a written statement, city spokeswoman Ruth Ruiz said city officials were not made aware of the relationship until the company made a public announcement on Sept. 26.
“Although CS&L’s final economic impact report was completed and provided to the City weeks prior to this announcement, as soon as the City became aware of the Angels selection [Convention Center, Sports and Entertainment Director] Tom Morton immediately contacted CS&L and requested a letter clarifying that the two subsidiaries (Legends Hospitality and CS&L) remain wholly independent of each other,” Ruiz wrote.
“As stated in the correspondence from Legends Chairman and CEO, Mr. David Checketts, CS&L is a stand-alone, wholly owned subsidiary of Legends which operates autonomously.”
Angels spokeswoman Marie Garvey contradicted Ruiz’s account. And public filings by the firm paint a different picture from what is presented in Legends’ Oct. 23 letter to the city.
Garvey said the city was told of Legends’ potential as an Angels contractor before the economic report was presented to council members in early September. This was part of the Angels’ due diligence, she said.
Furthermore, Garvey emphasized that the two contracts -- the consultant’s study and the food concessionaire -- are not connected. While a subsidiary of Legends, the consulting firm is completely independent, she said.
“Any accusation that there was any connection between these two contracts is absolutely false,” Garvey said, adding that the food and beverage contract was “not a small decision” given the critical service it provides for the fans.
Yet filings with the state of Texas, where CS&L is based, indicate that the consulting and hospitality firms have the same top executives.
The Legends website lists Dan Smith as “President, Hospitality,” a position he has apparently held since at least 2012. However, on a 2013 filing with the Texas Secretary of State, Smith is listed as president of CS&L.
Additionally, Texas filings show three other executives for CS&L also serving as executives at Legends Hospitality, LLC. They include David Checkett, David Hammer and Marty Greenspun.
(Click here http://goo.gl/BuveS6 to read the Texas filings.)
Despite these filings, the parent company’s letter claims that “Legends management nor staff have involvement in the day-to-day operations of CSL or have any influence on projects in which CSL provides advisory services.”
(Click here http://goo.gl/n83HN1 to read the letter from Legends.)
Legends spokesman Eric Gelfand declined comment.
A chorus of critics, led by Mayor Tom Tait, claims the proposed lease deal amounts to a massive giveaway of public land to a billionaire team owner. Members of the Council majority, meanwhile, say the proposal is only the starting point for negotiations.
Since it was first issued, Tait has said the study is based on flawed assumptions. He pointed out that the consultant acknowledged not interviewing a single person in Anaheim. The Register also published an article highlighting several key flaws with the study.
“I thought the study was worthless when I voted on it,” Tait said, adding this latest revelation regarding a potential conflict of interest “just confirms it.”
(Click here http://goo.gl/FfqJde to read the study.)
Council members Lucille Kring, Kris Murray, Jordan Brandman and Gail Eastman did not return phone calls seeking comment.
Please contact Adam Elmahrek directly at firstname.lastname@example.org and follow him on Twitter: twitter.com/adamelmahrek