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July 1, 2013

Los Angeles Convention Center Gets Private Management

After significant debate and months of arguments, the Los Angeles Convention Center, which has been run by the city for all of its 42 years, will will transfer to private management. The vote was reportedly unanimous. 

The City Council awarded the contract to Anschutz Entertainment Group last week in spite of objections by local hoteliers who, according to the Los Angeles Times, claimed that AEG "would have an unfair advantage filling its hotel rooms while booking conventions." The group owns several hotels, including the JW Marriott and the Ritz Carlton, which are next to the L.A. Live and Staples Center in Downtown Los Angeles.  

Chief Administrative Officer Miguel Santana reportedly said that hotel bookings would primarily be handled by the Los Angeles Tourism & Convention Board. He also told the council that AEG "offers a professional management team that can reduce operating costs at the Convention Center and respond more quickly to changing industry demands." 

Ted Fikre, an AEG vice chairman, told the paper that the company has an "ambitious plan" to drive more hotel business throughout the city, and Mayor Antonio Villaraigosa and the council reportedly set a goal of attracting 425,000 annual visitors by 2020, a 50 percent increase over current levels. Citing a consultant's report, Santana claims that the efforts could bring about $19 million to the city from hotel and bed taxes.

Under the terms of the new contract, AEG will get a $250,000 annual management fee and would qualify for another $250,000 if it meets agreed-upon performance measures. Final wording of a management agreement is expected to come back before the council in coming weeks. 

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About the Author: Jena Tesse Fox

Jena Tesse Fox





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