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Expanded Convention Center Plan Is On Again

July 12, 1987|ROXANA KOPETMAN | Times Staff Writer

LONG BEACH — Expansion of the city's Convention and Entertainment Center--an issue considered dead one year ago--has been resurrected by officials working behind the scenes.

City and convention officials are so confident that the center's exhibition space will almost double in size that they have targeted 1989 for the start of construction.

"That is the direction we're heading. A realistic estimate is two years," Mayor Ernie Kell said.

Although the issue has not been the subject of much public discussion this past year, changes in city management and a recently approved increase in the city hotel tax have given the project new life.

While hotel operators and others dependent on tourism have said the expansion is necessary if the city's convention and tourism business is to keep growing, former City Manager John Dever had maintained that the city could not afford the project.

But City Manager James Hankla, who took office in March, said he believes the expansion "is necessary to support further growth in our hospitality industry." Hankla said he considers the expansion a priority for the city.

Kell said that expanding the 192,000-square-foot facility, which includes about 100,000 square feet of exhibit space, is supported by the majority of the City Council. A 1986 study said it would cost $59.5 million to complete the project.

Last month the council raised the hotel bed tax from 7% to 10%. For now, the money is needed to help balance the budget. But in a couple of years, it could be used to partially pay for the convention center expansion, city officials said.

With the expansion in mind, hotel representatives gave their blessings to the bed tax increase, noting that in many cases local hotels would have to absorb the losses since group room bookings often are made a year in advance. Hoteliers want the expansion and are willing to help pay for it, explained Bill Miller, president of the Convention and Visitors Council.

This year's increase in the transient occupancy tax will generate about $1.5 million a year, according to Asst. City Manager John Shirey.

But the increase would not fully finance the project to add 75,000 to 100,000 square feet of exhibition space, plus meeting rooms and parking structures. Where the additional money will come from has yet to be decided.

An ad hoc citizens' committee last year recommended that the Port of Long Beach pick up most of the tab. The committee said that the expanded convention facility would spur port business with a Pacific Rim conference and exhibition center.

Jim McJunkin, port executive director, said city officials have not broached the subject with him since last year. But he said port officials have their own projects to worry about and "we have all our funds earmarked for port expansion."

Link to Trade Center

Another source of money might be tied to the privately-owned World Trade Center now under construction, Councilman Warren Harwood said. But Harwood, who chairs the council's Transportation and Infrastructure Committee where the proposal eventually will return for review, emphasized that any financial link to the World Trade Center is "undefined."

While the 1986 report by San Francisco-based Economics Research Associates put the price of expansion at $59.5 million, some people believe that is too high.

"We have a feeling that it's a lot less expensive. All we need to create essentially is a box. That's a crude term. We need to create a barn, a square facility that is not ornate," Miller said.

Harwood said one way to cut costs would be to ask downtown hotels near the convention center to pay for parking garages. Last year, the ad hoc committee recommended that nearby hotels such as the Hyatt Regency underwrite the construction of their own meeting rooms in the convention center.

$77-Million Bond Proposed

In a 1986 study, the consultants recommended financing the expansion through the sale of a $77.4 million bond issued by the city redevelopment agency and paid back over 25 years. The report projected the annual cost to the city to be between $11.4 million and $13.4 million.

The report recommended raising the hotel tax to 10%--which the council has done--and imposing a tax ranging from 50 cents to $1 per ticket on convention center events. The increased bed and ticket tax would generate about $2.2 million a year, leaving at least $9.2 million needed annually to cover the debt service on the bond and the expanded center's projected annual operating deficit of $3.3 million, the consultants projected.

According to the city's 1985-86 comprehensive annual financial report, the convention center had a $4.2-million budget and a $1.7-million deficit. Figures for the 1986-87 fiscal year ending June 30 are not yet available.

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