Sat, Jun

Time to Invest in the Convention Center


LA WATCHDOG - It appears that the modernization and expansion of the Convention Center is once again being considered by the City Council.   

At the November 7th meeting of the Trade, Travel, and Tourism Committee of the City Council, the Office of the Chief Legislative Analyst indicated that it and the Office of the City Administrative Officer would be submitting a report in a “few weeks” outlining their plans for the Convention Center. 

While this report will outline the many economic benefits to the City of developing a world class convention center worthy of the nation’s  second largest city and the economic viability of the Convention Center because of the recovery of the trade show business to pre-Covid levels, it also must address the cost, how to pay for it, will it require an increase in our taxes, and whether to enter into a public private partnership (“P3”) with the Anschutz Entertainment Group (“AEG”), the operator of the Convention Center. 

Based on the conversation during the committee meeting, the project is expected to cost around $1.2 billion, significantly more than the $500 million envisioned in 2015 because of inflation, the higher cost of materials, and the limited number of qualified contractors.

As for how to pay for this ambitious plan, this depends on whether the City will continue its previous efforts to enter into a thirty-year design-build-finance-operate-maintain development agreement with AEG.   Under this agreement, AEG would assume the risks associated with the expansion plan in return for annual payments to recoup its investment in the modernization and expansion project. These payments would be financed by the existing arrangement where 25% of the 14% Transient Occupancy Tax is dedicated to the Convention Center.

AEG would also have the right to develop an 850-room, four-star convention center hotel with significant meeting space that is necessary for a world class convention center. This hotel would also be entitled to economic development incentives since it has amenities and is within walking distance of the Convention Center.

On November 8th, Councilmen Tim McOsker and Curren Price submitted a motion, seconded by Councilwomen Heather Hutt, instructing the City Tourism Department to present an “extended Exclusive Negotiating Agreement” with AEG at its committee meeting on December 5th

We are looking forward to the report from the CLA and CAO which will more than likely be a continuation of the pre-Covid efforts.


The Trade, Travel, and Tourism Committee also approved by consent the hiring of a consultant to evaluate whether a 236-room hotel at 670 Mesquit Street in the Arts District is entitled to economic development incentives that are estimated to be in the range of $30 million over the next ten years. The answer is no.  The proposed three-star hotel (no amenities) is three miles from the Convention Center (not walking distance) and is part of a billion dollar, 1.8 million square foot development that is expected to generate excellent returns.  The City has more productive uses for the $30 million. 


(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate.  He can be reached at:  [email protected].)

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