The Los Angeles Convention Center is disjointed and out of date, and the city is hungry for conventions, but big plans to update the old complex never seem to quite stick. A few years back, Los Angeles was counting on LA Live developer AEG to overhaul the convention center as part of its plans to build an NFL stadium nearby. When that whole thing tanked, the city held a design competition for its own makeover. Last summer, a panel selected a red-heavy redesign by a team of HMC Architects and Populous; the LA City Council also approved a $470 million bond funding plan. So now they're considering throwing all that work out and doing something else entirely.
Last week, the City Council's Economic Development Committee approved a proposal from City Administrative Officer Miguel Santana that would send the city down an entirely new path to redevelop a much more extensive LA Convention Center campus in a public-private partnership (aka P3), where LA would essentially hand over the project to a private developer to do its thing. The city will probably end up considering both options now and making a final decision in June on whether to go ahead with the HMC/Populous plan or tear it up and start over.
Santana's proposal suggests "a re-imagined integrated urban development project [that] would provide the City with a convention, hospitality, and mixed-use district on the existing LACC campus, where an additional 9 to 14 acres of developable mixed-use real estate and other private revenue enhancements (e.g. signage and naming rights) enable the expansion to be privately financed and significantly reduce the project's reliance on the City's General Fund."
Arup, a consulting firm the city hired to report on the public-private partnership potential, "raises several risk factors associated with" the HMC/Populous plan, which only renovates the convention center's West Hall instead of replacing it; they say that "the possibility of latent defects is extremely high" and that the idea to raise the West Hall's floor to be more in line with the new South Hall will make the ceilings too low to be functional/marketable.
There's a request for proposals out for a similar deal in Fort Lauderdale, but otherwise the public-private thing has never been done for a convention center in the US, according to the Bond Buyer. According to Santana's report on the matter, the P3 means "the City sets the vision and goals of the project and the private sector delivers the project using its own financing tools." In this case, the city would make money off the ground lease, since it'd own the land underneath the massive development, and off of what they hope will be extra tax revenues.
But one very weird aspect of this whole plan is that convention centers are generally loss leaders, as Bud Ovrom, the executive director of the Los Angeles Department of Convention and Tourism Development, points out to the Bond Buyer: "It is a big building that we rent to people cheap, so they will stay in our hotels." He notes, however, that the LACC did make a profit starting in 2014, when it contracted operations out to AEG—"because the private sector pays employees lower salaries and less benefits" (AEG has also cut staff), which is another thing to consider in letting the private sector take over public infrastructure.
And then there's the Grand Avenue Project, as the BB notes, a multi-parcel, public-private development on Bunker Hill that was supposed to be finished in 2009. To date, the city has gotten one park and one apartment tower out of the deal; the bulk of the project has been held up over and over.
Regardless, the Economic Development Committee voted to go down what a supplementary Santana report calls the "dual path"—the city will continue working on the bond-funded HMC/Populous overhaul while also beginning development of the public-private partnership plan.
That means that the Bureau of Engineering will launch the state-mandated environmental review process with a report that will cover "multiple project options," while also getting refined architecture and engineering work from HMC/Populous.
Meanwhile, the City Administrative Officer will keep working with Arup to create "an architectural and engineering framework tailored to meet the needs of the P3 procurement model," which means "developing alternative architectural plan layouts and 3D massing layouts … while leaving enough flexibility in the design and site plan to allow P3 proposers to creatively achieve an economically viable project."
Then, aside from various financing and business plan work, the city will also be planning what they call a Headquarters Hotel, which would be separately developed, but accompany either plan.
Two other City Council committees will have to sign off on this plan before it goes to the full City Council for approval. Santana's supplemental report assumes Council sign-off in mid-February, with all of the above to be finished by late May and "presented to Council for a decision on a final path to take" before the end of the fiscal year on June 30.
· PUBLIC-PRIVATE FINANCING OPTIONS FOR THE LOS ANGELES CONVENTION CENTER EXPANSION PROJECT [LACity.org]
· Los Angeles Weighs Convention Center P3 [Bond Buyer]
· 14 New Views of the Big Redesign at the LA Convention Center [Curbed LA]