A recommendation to find a private operator for the Los Angeles Convention Center was approved Wednesday by the Los Angeles City Council, despite some members’ misgivings on turning over management of the public asset.
Proposals will be due in the spring. City Administrative Officer Miguel Santana hopes to have a new governance and management structure in place by next July.
Los Angeles attracts trade shows and ceremonies, but is off the radar when it comes to large conventions. Only five percent of events at L.A.'s facility are major conventions that draw people from outside the region, Santana testified. In top convention cities such as Chicago and Orlando, that number is closer to 35 percent.
About 11 percent of L.A.’s Convention Center attendees come here by airplane; in other cities the figure is six times that. That statistic is important, Santana said, because those are the visitors who stay in hotels and turn business trips into vacations, causing a financial ripple throughout the city.
“The goal of this proposal is to convert a city-owned asset into an economic engine that is currently not achieving that goal,” Santana said.
He noted that the bonds on the Convention Center cost the city’s General Fund $50 million a year: “In that larger context, in fact the Convention Center is not operating in the black,” he said.
Santana's report noted that the convention centers in Chicago, San Francisco and Detroit are privately operated.
Labor groups representing Convention Center employees oppose the privatization of management. It is unclear what may happen to city workers if a new operator is hired. To that end, the Personnel Department was asked to determine whether displaced workers could move to other city departments.
“There’s no analysis. There’s no cost-benefit analysis,” said Julie Butcher with SEIU Local 721. “On the other hand, you have very specific recommendations from your Budget and Finance Committee on both booking policies and governance changes that can happen immediately and that [would] make it better.”
The city administrative officer recommended shortening the Convention Center’s booking window from 24 months to 12. He also recommended strengthening the center's Board of Commissioners so members can advise the city on tourism and marketing. Both recommendations are included in the council's decision to seek a private operator.
The city council voted 13-2 to move ahead with the request for proposal. Councilmen Paul Koretz and Richard Alarcon were the dissenting votes.