AEG, operators of the Los Angeles Convention Center, have proposed a $1.2 billion expansion of the downtown meeting facility to city officials, according to the LA Times. The expansion would include 800,000 additional square feet to the convention center and a new 40-story tower expansion for the nearby JW Marriott hotel at L.A. Live. With the Staples Center, L.A. Live, the JW Marriott, and the Convention Center, the proposed new campus would total 100-acres in the heart of Downtown Los Angeles.
On Monday (May 7), AEG sent a letter to city officials outlining the proposal that they suggest would help to bring in the $1 billion Los Angeles loses every year due to inadequate convention space. The expansion calls for private/public funding requiring tax incentives. Los Angeles Mayor Eric Garcetti and City Councilman Curren Price, whose district the convention falls into, have already shown support for the plan.
The expansion plans calls for $500 million to build 800,000 square feet of contiguous exhibition space as well as adding up to 350,000 square feet to the South Figueroa Street center. The result would be over 1.2 million square feet with 250,000 square feet of meeting rooms which will make the LA Convention Center more competitive against other, larger facilities.
“This is not just about competing with Anaheim, San Diego and San Francisco,” Ted Fikre, Vice Chairman of AEG told the Times. “The bigger opportunity here is to create this unrivaled destination.”
The Gilbert Lindsay Plaza would get a redesign per the proposal as well. The current bus and car drop-off space will be redeveloped into a landscaped green space that would be utilized for outdoor exhibitions and receptions.
The $500 million would be provided by a public-private partnership with AEG and Los Angeles infrastructure-development and investment business, Pleanary Group. The cost of designing and constructing the expansion would come from AEG and Pleanary “through a mix of the companies’ funds and privately placed taxable debt sold to large institutional investors, such as insurance companies, mutual funds and pension funds” explained Stuart Marks, senior vice president of Plenary. Public debt would not be raised for the expansion, but the city would make annual payments to the AEG-Pleanary partnership — the exact amount has yet to be determined.
The additional $700 million cost laid out in the proposal seeks a new JW Marriott Los Angeles L.A. Live hotel. The expanded hotel space would be located next to the current Marriott, include 850 new rooms, and provide more meeting space, including a 51,000-square-foot ballroom that AEG says would be the largest in Los Angeles. A pedestrian bridge would connect the new tower with the existing Marriott and the West Hall of the Convention Center.
AEG and partners would fund the hotel, but expect tax incentives such as a breaks on the hotel’s bed tax.
“We want it completed by 2022 at the latest,” Mayor Garcetti told the Times of the latest proposal. “Tourism is one of our huge success stories, but we have been playing with one hand tied behind our back.”
AEG’s new plan is seeking to get approvals promptly so that construction can be completed by 2021. The last time the Convention Center was expanded was in 1997. AEG had proposed a different plan for expansion that was contingent upon luring a National Football League team to Los Angeles and building Farmer’s Field next to L.A. Live. The plan fell through when NFL Rams owner Stan Kroenke decided instead to build his own stadium in Inglewood, California.
“We did a significant environmental review and a lot of other entitlement work” on the earlier proposal, Fikre said, “which could save us a lot of time.”
According to Fikre, the approval process could take between a year and 18 months and then be followed by two years of construction on the Convention Center and 30 months on the new hotel tower.