For the last year, Los Angeles political leaders have searched for a way to upgrade the downtown Convention Center without also delivering cuts to core services.
The city’s budget team pushed for the facility to be emblazoned with digital billboards, which would produce tens of millions in ad revenue. A city-hired consultant came up with several cost-cutting measures, including the elimination of a public plaza originally planned as part of the expansion.
Despite those efforts, the project has only lost ground. On Tuesday, City Council members were informed the price tag has gone up yet again, reaching $2.7 billion — an increase of $483 million from six months ago.
Some at City Hall are growing nervous that the project’s first phase won’t be finished in time for the 2028 Olympic Games, jeopardizing the Convention Center’s status as one of the main venues. Beyond that, city officials have begun worrying publicly that Gov. Gavin Newsom might not support a state bill permitting the installation of two digital billboards that would face the busy 10 and 110 Freeway interchange.
Those two signs — hotly opposed by groups such as Scenic America — are expected to produce the vast majority of the project’s advertising income, according to the city’s budget team.
If state and federal support for the signs fails to materialize, the city’s general fund budget would have to provide an average of $111 million each year through 2058 to cover the cost of the Convention Center expansion, City Administrative Officer Matt Szabo said.
The earliest years would be the most expensive. In 2031, for example, an estimated $167 million in taxpayer funds would go toward the Convention Center’s debt and operations — even after the revenue from the project is factored in, Szabo told the council’s economic development committee on Tuesday.
“Since we last met in this room on this matter, the costs have increased dramatically,” Szabo said. “The serious [construction] schedule risks remain. And revenue that the project relies upon — will rely upon — is in jeopardy.”
For some on the council, the latest bad news is proving to be too much.
Councilmember Katy Yaroslavsky, who heads the council’s powerful budget committee, told The Times she believes an overhaul of the Convention Center is key to making downtown “stronger, more economically vibrant.” But with the city already struggling to pay for police officers, street repairs and other basic services, the current plan is “just too expensive,” she said.
“Without the signage revenue, the risk to the City’s budget is massive and unaffordable,” Yaroslavsky said in a statement.
Newsom spokesman Izzy Gardon declined to discuss the digital billboard bill, saying the governor’s office “does not typically comment on pending legislation.” State Assemblymember Mark González (D-Los Angeles), who represents part of downtown, said he is “engaging productively” with the Newsom administration on the bill.
“I’m confident we’ll find a path forward,” he said.
Council members must decide by Sept. 15 whether to move ahead with the project, Szabo said. Even some of the council’s downtown boosters sound nervous about their next step.
What “I hear some of my colleagues saying is, ‘Do we want a very beautiful Convention Center but a bankrupt city?’” said Councilmember Ysabel Jurado, who represents the vast majority of downtown.
Business groups have rallied around the expansion, saying it will finally allow L.A. to compete for large conventions, while also injecting new life into a downtown still reeling from the aftereffects of the COVID-19 pandemic.
The project has also amassed broad support from organized labor, especially the region’s construction trade unions, which say it would create thousands of jobs.
“With over 800 members out of work, we need a project like this,” said Zachary Solomon, business representative for the International Brotherhood of Electrical Workers Local 11. “The cost of this project will only continue to increase, so we need this project now.”
Many of the groups backing the Convention Center expansion have played a role in electing council members. Still, if the council presses ahead with the project, it will do so in the face of major warning signs.
The city’s top policy analysts have cautioned that any major construction delay could cause organizers of the 2028 Olympic and Paralympic Games to pull the Convention Center, which is scheduled to host judo, wrestling, fencing and other competitions, off its list of venues.
“It would be really bad to pay such a premium on such a project and [have] it not be ready in time to host the Olympics,” said Chief Legislative Analyst Sharon Tso, who advises the council.
Stuart Marks, senior vice president of Plenary Americas, the development company spearheading the Convention Center project, told council members he is “highly confident” the work will be done on time, saying there is flexibility in the schedule — and major penalties if the developer fails to perform.
Marks, whose company has partnered with Anschutz Entertainment Group on the Convention Center, said the companies tasked with construction have an established history, having worked on projects such as Staples Center — now Crypto.com Arena — and the expanded Moscone Center in San Francisco.
“Their reputations are on the line. Our reputations are on the line. Nobody’s saying there’s no risks. But there are contingencies … mitigation strategies, security packages and contractual regimes that equally meet that risk,” he said.
The proposed timeline calls for APCLA, also known as AEG Plenary Conventions Los Angeles — the joint venture that would oversee the expansion — to start construction later this year, pause that work during the Games and then finish once the event is over.
Under the proposal, a new wing would connect the Convention Center’s landmark green South Hall with the blue West Hall.
Much of the increase in the construction price has been attributed to the city’s Department of Water and Power, which recently issued higher cost estimates for the relocation of utilities under Pico Boulevard and the installation of several miles of cable and conduit.
DWP officials have already warned that they lack the staffing to carry out the project and would need to hire outside labor. They also indicated that work on the Convention Center is likely to result in delays to other projects — including construction of a new rail line in San Fernando Valley — because staff would have to be diverted, according to Szabo’s memo.
Tso has echoed many of Szabo’s concerns, saying in a separate report that the project would have an “acute negative impact” on the general fund budget, which pays for police, paramedic responses and other basic services.
Times staff writer Laura J. Nelson contributed to this report.
The post The cost of expanding L.A.’s Convention Center keeps growing. Can the city afford it? appeared first on Los Angeles Times.
