Los Angeles, a city with a budget of $7.2 billion for fiscal 2013, is considering turning over its convention center to private management to save money. City officials say the move would save Los Angeles $14 to $37 million over five years. AEG expresses interest in bidding. The city also calls for a new nearby hotel to boost bed availability for large conventions. The convention center complex is next to two key Anschutz Entertainment Group(AEG) properties, the Staples Center, L.A. Live and the firm’s proposed downtown NFL football stadium. The stadium plan would involve the demolition and reconstruction of one wing of the Convention Center.
The City Administrative Officer, Miguel Santana said the convention center essentially runs on a deficit, and while trade shows pay for themselves, the city spends more than $48 million a year towards its costs. Mr Santana also proposes that the center focuses on attracting conventions from outside of the region as these events help generate city tax revenue because participants stay at local hotels and eat at restaurants.
The City of Los Angeles is now also soliciting proposals from developers for a new large-scale hotel to be located across from the L.A. Convention Center, as part of a massive expansion and redesign of the area and facility. LA city planners have released a Request For Proposals for the development of a high-end property between the Convention Center and Staples Center. The preferred future development of the site is a four star or boutique hotel.
The site is a city owned land located on the corner of Figueroa and Pico Boulevard. City planners are working to drive hotel development near the Convention Center to stimulate our local economy and attract large citywide conventions to Los Angeles in an effort to bring more tourism, jobs, and more revenue to the city. The development of a new convention hotel would provide about 5,000 hotel rooms in order for L.A. to be a competitive convention city compared to San Francisco which has about 19,000 rooms near their convention center and San Diego which has more than 8,000.
At present, major upscale hotels close to the LA Conference Center include the J.W. Marriott, the Ritz-Carlton and the Luxe. There are also two new Marriott hotels, a Courtyard and a Residence Inn, planned for the area and developers have commenced work on the $172-million Marriott project adding new hotel rooms to the area.