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≡ THE CONVENTION CENTER ≡
After a two-and-a-half hour hearing, the Los Angeles City Council Budget & Finance Committee voted, 3-2, for a lengthy recommendation to the full City Council to scrap the proposed $2.72 billion expansion of the Los Angeles Convention Center until after the conclusion of the 2028 Olympic and Paralympic Games.
The committee, chaired by Council member Katy Yaroslavsky, heard extensive testimony from the City’s Chief Administrative Officer Matt Szabo, Chief Legislative Analyst Sharon Tso, from the Department of Water and Power’s Senior Asst. General Manager for Power Systems Dave Hansen and the developer on the project, APCLA.
Tso noted the rushed nature of the reviews by City departments on the project and that the project has not been completely designed, risking added scope and costs. The cost has risen dramatically and the projected revenue from massive, digital signage facing the Harbor Freeway is now in jeopardy as a hoped-for waiver in bill AB 770 from the State of California has not materialized. Tso explained:
“The real concern that we have is really about Olympic readiness. When we embarked upon this, the whole purpose was to do this for the Olympics. And ironically – ironically – where we’re at, we could actually compromise the delivery of the Olympics, by moving forward on a project that could possibly be delayed for any number of reasons.
“And Water & Power is here to address that, Engineering can also address that, but there are a lot of schedule risks that could impact that. We’ve had some preliminary sessions with LA28; they’ve already begun the venue design for the Convention Center.
“I will remind you that there are at least 10 events that will be taking place there, as well as six other events that will be using adjacent facilities there. That facility, that whole sports park, will be utilized every day by LA28. Every day. They are expecting over a million ticketed people who will be attending everts there.
“And any risk that compromises the delivery of that, it gives me great concern. And we could be on the hook for additional liability and the fact that we worked so hard to maintain venues here in the City makes me think really hard about that. And so that is of great concern.”
The City has set a hard deadline of 31 March 2028 for most of the expansion work to be done on this project so that the LA28 organizers will be able to take exclusive access with a fully-functioning facility on 1 June 2028. That rest of the expansion work would be done in 2029.
Tso added:
“We have real fiscal problems right now. We really do. We just completed a budget process that was very brutal, and if you’re happy with the level of service that we have today, then this is the project for you. If you want to devote pretty much all of your economic activity in the next few years, this is your project. But if you’re happy with the level service, that’s what you’re going to get with this project, because you will be very, very limited in terms of being able to add any additional firefighters in the next decade, any additional police officers, improving your Rec & Parks services, paving another street. That is all going to be at risk.”
Yaroslavsky, after two hours, expressed her frustration with the project, especially with the costs and the aggressive timeline:
“The truth is that we don’t actually know. We don’t know. Because as a city, we haven’t built up a real estate development practice in-house, that can advise us on whether or not this is a good deal, and it’s capable of being finished by March of ‘28, or it’s not. We just don’t know. I don’t know.”
She noted that the cash cost to the City for debt payments on the bonds required to finance the expansion would cost $100 million per year for 30 years and up to $160 million in the early years.
Yaroslavsky made a motion to end the current expansion plan, and asked City staff to come back within 30 days with a plan to take care of deferred maintenance at the Convention Center, implement electrical, fire, technical and accessibility upgrades, installation of digital signage as allowed now and other modernization needs. Further, within 120 days, a report was requested to create a new Request for Proposal for the expansion of the Convention Center with a firm, fixed-price contract, with the construction to start after the 2028 Games conclude.
The motion was countered by Council member Heather Hutt, who asked for a vote to have the committee make no recommendation and forward the matter to the City Council. That motion failed, 3-2.
Yaroslavsky’s motion passed by 3-2, with Council members Bob Blumenfield and Eunisses Hernandez in favor. Hutt and Council member Tim McOsker were opposed.
The matter now goes to the full City Council for an up-or-down vote – with lots more discussion – on Friday.
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