AEG official optimistic hotel deal can be struck shortly.

A 1,200-room convention center hotel planned for a site near Staples center, bogged down for years as its developer sought funding, could receive a significant boost in the next 60 days.

Standing on the floor of Staples Center last week, Anschutz Entertainment Group President Tim Leiweke told a crowd of 1,400 at the Central City Association's annual luncheon that negotiations were proceeding to finalize the development's funding.

"It's a matter of the hotel and how it ultimately gets funded," said AEG Spokesman Michael Roth. "We're hoping to have something to announce within 60 days, but I think if it took that long we would be surprised."

By then Roth said AEG hopes to announce other partners in the $1 billion sports/entertainment district that's entitled for the roughly 1-acre of surface parking lots that ring the Staples Arena.

Leiweke has vowed to move forward with the project using mostly private funds. It is believed that AEG would ask the city for an abatement on hotel room taxes to help offset the project's $300 million price tag.

AEG is said to be in talks with Lewis Wolff, principal of Maritz Wolff & Co., which owns the Fairmont Miramar Hotel in Santa Monica, to develop the downtown hotel.

Meanwhile, AEG officials have been meeting with Peter Zen, president of FIT Investment Corp., which owns the Westin Bonaventure hotel about a possible settlement of ongoing litigation that has so far blocked the city of Los Angeles from using public funds to subsidize construction of the hotel.

"There "always have been and continue to be discussions to make a settlement. It's in our best interest and the city's best interest not to have this continue," Roth said. "We have always said we've wanted to work out a settlement. So far the atmosphere hasn't been conducive to it, but perhaps in the upcoming weeks it will be."

Zen could not be reached for comment.

Without the hotel, AEG officials say they cannot move forward with other aspects of the project, including a 7,000-seat theater called L.A. Live, nightclubs, shops and restaurants.

"I think everybody understood the hotel would be the linchpin and it didn't make sense to pursue everything else until the hotel was solid and we had a tentative date to break ground," Roth said.