Cost of L.A. Convention Center upgrade rises to at least $287 million
Two high-level advisors to the City Council projected that the convention center makeover -- tearing down one section and constructing another nearby -- would cost between $287 million and $358 million, up from last year's estimate of $275 million. The demolition would be needed to make space for Farmers Field, the $1.2-billion football stadium planned by developer Anschutz Entertainment Group.
The higher price tag is due in part to a decision to seek additional design elements for the convention center, including a new ballroom that would be the largest in L.A., said City Administrative Officer Miguel Santana, one of the report's authors. Consulting firms retained by the city portrayed the new ballroom as "vitally important" to attract large convention business.
Despite the increased expense, Los Angeles will be able to move ahead with the convention center project, thanks to lower than expected interest rates on the bonds that will be used to finance it, Santana said.
The new cost estimates are contained in a series of reports that are to go before the council's Ad Hoc Committee on Downtown Stadium and Convention Center Renovation on Thursday. That same day, the city's Planning Commission is to review land-use documents connected with the stadium and convention center project.
The council is scheduled to finalize the plan before the end of the month. However, key agreements would not be executed until the city's terms are met, including the signing of a lease for an NFL team.
Santana and Chief Legislative Analyst Gerry Miller have recommended the city rely on two forms of borrowing to finance the convention center project. The Los Angeles Convention Center and Exhibit Center Authority would issue as much as $228 million in lease revenue bonds, a form of debt that would be the responsibility of the city’s general fund budget, which pays for police officers and firefighters.
Parking taxes, property taxes, sales taxes and rental income from the stadium would be tapped to cover those debt payments, according to the report.
The project would also rely on a second set of bonds worth up to $109.7 million, the report states. Those would be the obligation of Anschutz Entertainment Group, not the city. That debt would be repaid from taxes on LA Live, the nearby entertainment complex owned by AEG, and the stadium site.
-- David Zahniser