Council votes to seek private Convention Center manager
Los Angeles City Council members voted Wednesday to invite a private operator to run the downtown Convention Center, handing Mayor Antonio Villaraigosa a major victory as he prepares to leave office this summer.
The 13-2 decision to seek bids from private management firms comes after years of discussion about how best to revamp the aging facility to bring more visitors to downtown hotels and restaurants. A modern Convention Center, with more space and up-to-date amenities, would attract the kind of national and international conventions that bring tens of thousands of visitors at a time, officials say.
But to get there, the city needs a manager with national expertise in hosting large conventions. In today's competitive market, it's crucial to be able to accommodate large events quickly and to be flexible with changes, Chief Administrative Officer Miguel Santana told the council.
A private operator would be more "nimble" than the current public administration of the Convention Center, he said. And the city would have the added benefit of reducing its roughly $50-million annual subsidy -- general fund dollars that could be used to trim trees and fix sidewalks.
Villaraigosa has long pushed to privatize the Convention Center and the Los Angeles Zoo as cost-saving measures for the city. On Wednesday, he called the complex an "economic engine."
"Tourism is one of Los Angeles’ key industries, generating jobs and creating revenue that pays for important public services,'' he said in a statement. "In 2011, we added almost 8,000 tourism and hospitality jobs, and we need to continue building on this success."
After sifting through bids, a recommended operator will be presented to the council for approval, probably in April, Santana said. The council must also sign on to changes in how the center is governed.
Opposing the privatization were council members Richard Alarcon and Paul Koretz, who wants to see if the new governance structure will bring about positive changes to the center.
"I know partly the urgency is that the mayor wants to see this done under this watch," Koretz said. "But common sense says we should take a little longer and make sure we do it right.”
The council could halt the process next year if it chooses, Santana said.
The Convention Center complex is adjacent to Staples Center and L.A. Live, assets owned by Anschutz Entertainment Group, as well as the site of the firm's proposed downtown NFL football stadium. The stadium plan would involve the demolition and reconstruction of one wing of the Convention Center.
If the stadium deal were to fall through, Santana said, the city would still move forward with private management plan of the Convention Center.
"This is a public asset either way,'' he said.
A handful of Convention Center workers pleaded with the council to reject the move, saying they are worried that they might lose their jobs. Luis Aguilar, a clerical worker for eight years, said employees had worked hard to keep the center "in the black."
"It would be a shame to kick us out and lose a trained workforce,'' Aguilar said.
Amendments to the request for proposals give city workers first right of refusal to seek similar jobs under any new management. The selected operator must also agree to a unionized workforce, Santana said.
Union leaders asked the council to delay a vote until a final version of the bid proposal was written. Julie Butcher of Service Employees International Union, Local 721, which represents many of the city's civilian workers, said employees are also worried that privatizing the center might jeopardize the tax-exempt status of city bonds.
But Santana assured the council that no legal problems emerged when the city undertook a similar transition at a publicly operated animal shelter in the San Fernando Valley.
Councilwoman Jan Perry, who authored the motion earlier this year, said working with a private operator would finally bring the underperforming convention space to its "true potential."
"Back in the 1980s, we expanded it to attract national and international conventions,'' said Perry, who is running for mayor. "We're not there yet but we could get there."
Consultants told the council that similar public-private transitions in Chicago and San Francisco have resulted in greater revenues for those cities as hotels filled with visitors. One analysis said private operation would save the city up to $8.5 million annually by the fifth year.
-- Catherine Saillant at Los Angeles City Hall
Photo: Mayor Antonio Villaraigosa. Credit: Irfan Khan / Los Angeles Times