LA City Council approves $2.6 billion convention center expansion, despite financial risks

The Los Angeles City Council approved a massive expansion of the downtown convention center Friday, setting aside concerns about the risks to future funding for basic city services.

The project will connect the West and South halls of the sprawling facility and add an estimated 325,000 square feet of space in hopes of attracting new conventions — and new revenue — to Los Angeles.

“Every year we lose tens of millions of dollars in economic opportunity to other cities with better facilities,” said Councilmember Traci Park. “We need to bring our city back to life and we don't have time to wait.”

The benefits

Los Angeles Convention center will get a major overhaul under a new plan.

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The project would bring to L.A. at least 500,000 additional visitors over the first 10 years, according to City Administrative Officer Matt Szabo. It would generate an average of $120 million in direct revenue from events, parking and signage over 30 years, he said. It would produce more than $650 million dollars in indirect general fund tax revenue over 30 years from things like the hotel occupancy tax.

Szabo said the convention could expect to hold 83 additional events.

Powerful business and labor leaders alike spoke out in favor of the project ahead of the vote.

“We’re going to be able to compete with Orlando and San Diego and Las Vegas and bring more people here to conventions,” said Stuart Waldman, president of the Valley Industry and Commerce Assn. “This is going to be a job creator that is going to benefit everyone,”

The head of the L.A. County Federation of Labor also praised the decision.

“This will create an additional thousands of union jobs for more Angelenos who need an economic lifeline,” said Yvonne Wheeler, president of the L.A. County Federation of Labor.

Szabo said the project would create 13,300 new jobs during the expansion and more than 2,000 net new jobs at the convention center.

Concerns about cost

But dire warnings came from Katy Yaroslavsky, who heads of the City Council’s Budget and Finance. She voted against the project.

“This expansion is unrealistic, it's unaffordable and it's fiscally irresponsible,” Yaroslavsky told her colleagues.

Under the plan, the city would have to pay out on average $89 million a year over 30 years for operating costs and debt service for the project. That number hits a high of $147 million in fiscal year 2031.

Yaroslavsky said that financial commitment will tie up city resources for years.

“It means when we want to accelerate the hiring of police officers or expand the fire department, there will be no money left to do it,” she said. “If we want to repair the sidewalks that are costing us more than $100 million dollars in liability or build more bike lanes and walkable communities so that we’re in compliance with HLA, there will be absolutely no money to do it.”

Councilmember Nithya Raman was the only other "no" vote. She expressed concerns the project will take away money from efforts to stem the city’s homelessness crisis.

“What I fear is that we are going to have a beautiful new convention center surrounded by far more homelessness than we have today, which will drive away tourists,” Raman said.

Olympics and timing

Both said they feared the project’s first phase won’t be done in time for the Olympics — calling the "Olympic-driven timeline.. unrealistic on its face." The convention center is supposed to host wrestling, fencing, and judo.

Szabo said that despite its benefits, the project comes with “significant risks.”

Even council members who supported the project acknowledged its challenges. Some wondered if the Department of Water and Power would be diverted from other projects like installing underground power lines in the fire ravaged Pacific Palisades.

A DWP official assured the council it would not.

Still, supporters said the project was in part an expression of hope in the future of downtown L.A.

“The project before you today stands to transform our future,” said Nella McOsker, president and CEO of the Central City Association.