Welcoming New Approach to Tourism

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The city of L.A.’s $200 million-plus deficit, its focus on core services and maximizing public assets are all intertwined. The city needs to creatively address its stubborn fiscal deficit with more than a regressive sales tax on the March 2013 ballot, and address that deficit more prudently than with further layoffs of city personnel.

During my 16 years as a commissioner for, and as a former president of, the Los Angeles Convention and Exhibition Center Authority, the Los Angeles Convention Center has been the subject of multiple audits by two different city controllers and has been viewed critically by elected city and county officials and even once dismissed as a “white elephant.”

Despite that checkered past, the Los Angeles City Council should adopt the bold structural changes included in a recent recommendation from the city’s budget expert, the city administrative officer – a public-private partnership where the city maintains ownership of the Convention Center, but contracts its operation to a private management firm.

Municipal core services such as planning, public safety and street maintenance share a commonality – none focuses on revenue generation. In contrast, the Convention Center’s promise and potential is as a thriving economic engine. Entering into a public-private partnership to manage this financially based asset can generate additional revenue to assist funding core city services and reduce the deficit.

This partnership will eliminate the current byzantine structure of one city commission and another separate city-county joint powers authority having Convention Center oversight responsibility. This inefficiency is magnified as both the Convention Center staff and the Los Angeles Tourism and Convention Board share responsibility in booking events. It is further compounded because the Convention Center’s general manager reports to the mayor and advises the City Council, while the CAO administers the city’s agreement with the tourism board.

This convoluted and conflicting governing structure can be replaced with private management operating independently of the day-to-day machinations of government while reporting to a sole muscular public commission to ensure accountability and protection of public interests.

The fundamental purpose of a municipal public convention center is to serve as an economic catalyst by generating conventions that attract out-of-town visitors who occupy hotels, dine at restaurants and visit local attractions. While local trade shows and consumer events provide a short-term boost of the Convention Center’s occupancy rates, they do not generate nearly the economic stimulus as that of major conventions. Convention Center attendance from major conventions is a disappointing 10 percent of all bookings, far less than other competing California cities. Attracting more large conventions can be best achieved by an experienced operator with performance-based financial incentives.

Other cities

Operating a 1 million-square-foot convention center in Los Angeles is not for the faint of heart. A convention center is a large business enterprise and requires immediate decision-making and operational flexibility, qualities that have proved difficult with the current structure. There are safeguards to the city since any operating contract would be for a fixed term to allow the city, at its sole and absolute discretion, to prudently proceed at that term’s conclusion.

Los Angeles would not be breaking new ground. Chicago; Detroit; Denver; and Atlantic City, N.J., have successfully adopted this structure for their convention centers.

A legitimate concern is the fate of the Los Angeles Convention Center’s employees in this transition. However, only a small percentage of the center’s valued employees have expertise unique to that industry, nearly 90 percent of the employees could transfer to other municipal departments. Those with specialized skills should be offered an extended opportunity to demonstrate their talents to the private management firm.

Implementing this plan will allow the city to garner the expertise of a private management firm before the planned demolition of the Convention Center’s aging West Hall, the privately funded expansion of a modern and physically connected Convention Center space and the construction of Farmers Field. These changes should be integrated to maximize revenue during this planned whirlwind of construction activity.

The Convention Center has enjoyed many successes since its 1971 opening and its current $26 million in annual revenue is promising. However, the Convention Center must adapt to a challenging and competitive environment to fulfill its promise by attracting more large conventions, stimulating economic activity and generating revenue. The public-private partnership plan is not a panacea, but this plan can maximize public assets to further enhance downtown L.A.’s renaissance of sports, entertainment, culture and housing that surround the Convention Center.


Wayne Avrashow is a lawyer who practices in Encino and has been a commissioner on the Los Angeles Convention and Exhibition Center Authority for 16 years.

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