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City Moves Forward on Privatization Deal for Convention Center

By Eric Richardson
Published: Tuesday, February 09, 2010, at 04:46PM
Convention Center Eric Richardson [Flickr]

The city hopes to find a deal that could reduce its $50 million per year debt load on the Convention Center.

As it continues to find ways to close a growing $200 million budget deficit, the City Council today voted to move forward on trying to find a private operator to take over the Los Angeles Convention Center and potentially reduce the roughly $50 million spent annually on the facility.

Most of that money goes toward servicing the $480 million in debt remaining on the structure, which has 720,000 square feet of exhibit hall space and 147,000 square feet in meeting rooms.

Convention Center Assistant General Manager Phillip C. Hill cautioned the Council that a private deal may not be as easy to find as they might think. He pointed out that 15 of the 16 facilities in the Convention Center's "competitive set" are run by government entities, with only San Francisco operating under private management. That deal, he noted, involves a payment from the city to the operator and the city's continued responsibility for debt service.

Hill emphasized the way in which the center was already focused on saving the city money. For the last few years the facility has been in the black for its operations budget, pulling no money from the city's general fund. "We are the only convention center that I know of in our competitive set that is able to achieve that," he said.

That operating budget is only one piece of the picture, however. On top of the debt load, the city is also faced with the need to make upgrades to the facility to keep it competitive. City Administrative Officer Miguel Santana told the Council that $25 million in necessary capital improvements have been identified.

The facility, which opened in 1971 and was expanded in 1993 and 1997, employs 130 people.

Council's action allows the CAO's office to move forward with drafting a public-private partnership RFP for the facility. That process could take up to a year.

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