LA WATCHDOG – The odds that an NFL team will relocate to Farmers Field in downtown Los Angeles are better – but not much – than slim to none, given the avarice of the self-centered owners and their New York-based mercenaries. As a result, the city is considering forming a Technical Advisory Panel to “evaluate the various options the city may have for the re-use of the West Hall site in connection with the expansion and improvement of the Convention Center.”
This is another waste of time and money.
Our broken and broke city does not have management capability, marketing expertise, organizational flexibility, and financial resources to achieve its goal of becoming a top tier convention destination.
Furthermore, the Convention Center is burdened by a meddling, omniscient City Council, a slow moving City Hall bureaucracy, and overly restrictive work rules that makes it difficult to even operate our second rate, poorly designed, and outdated Convention Center.
Business Is Sinking
For example, over the last five years, the number of scheduled exhibit hall events has decreased by about 25 percent.
One primary advantage of selling the 870,000-square foot Convention Center on 54 acres in downtown is that the city would be able to pay off over $400 million in outstanding Convention Center debt.
Further, any proceeds from the sale of the Convention Center that exceed the outstanding debt will allow the city to retire other outstanding indebtedness. Importantly, any excess proceeds should not be used to cover every day operating expenses.
The sale would save the city’s General Fund between $60 and $80 million a year, primarily as a result of eliminating debt service requirements of over $50 million a year.
This savings would help eliminate a portion of the structural budget deficit that is projected to average $275 million a year over the next four years because of soaring salaries, benefits, and pension contributions.
Profile of a Buyer
The buyer of our Convention Center must be a well-capitalized company that has the demonstrated management expertise to develop and operate a world class convention center. This will require significant renovations to the existing, outdated facilities or possibly the construction of a new state of the art, high tech, architecturally significant Convention Center.
The operator will need to develop additional premium hotels, a high quality retail environment, and other exciting venues and attractions so that this convention and entertainment center will be attractive to not only conventioneers, but to tourists from around the world.
At the same time, this development will further stimulate the rejuvenation of downtown by providing additional amenities to this growing residential community.
This only will happen if the city creates a business friendly environment where the city sets up the ground rules and then limits the interference of our Elected Elite and their cronies and of the local activists who will try to extort exorbitant payments from the business community.
The most logical, synergistic buyer is Convention Center’s next door neighbor, the Anschutz Entertainment Group, the owners of LA Live, Staples, the Nokia Theatre, and over 5,000 parking spaces.
Not only does AEG own the $2.5 billion LA Live development that sits on 27 adjoining acres, it is a successful worldwide operator of convention centers, entertainment districts (the O2 in London), theatres and clubs, and arenas, and the owner of numerous sporting events and teams, including the Kings and a minority interest in the Lakers.
If AEG (or a well-heeled buyer such as Disney or NBC Universal) purchases the Convention Center and makes country fortune, many would no doubt complain that AEG took advantage of the city.
That would be a high grade problem because if AEG is successful, the city will do just fine through an increased tax base (real estate, sales, and hotel occupancy taxes); the possible participation in any increases in revenues, profits, or values; the elimination of over $400 million of debt; and annual savings of $60 to $80 million a year.
More importantly, the city’s economy and its citizens will flourish as many new construction and permanent jobs are created, generating even more revenue for our beleaguered city. Not bad considering that the city cannot even operate a parking lot.
Mr. Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. He is the publisher of the Recycler Classifieds, www.recycler.com, and hemay be contacted at lajack@gmail.com Hear him every Tuesday morning at 6:20 on McIntyre in the Morning, KABC radio 790.
