Don't feed the white elephant

Stagnant trade-show business coupled with a convention center glut translates into more white elephants subsidized by taxpayers. Some cities such as Washington are already offering deep discounts to conventioneers to keep their buildings occupied. The L.A. Convention Center faces ever more cutthroat competition in such an environment. Unfortunately, the evidence suggests that a flashy hotel nearby may not increase the center's allure, especially because other cities, including Denver and Phoenix, are planning similar investments.

The Brookings report concludes that many of the cities that have invested heavily in convention-related projects, such as Baltimore and New Orleans, have not gained the expected new jobs. One problem is that tourism is generally notorious for creating low-wage employment, which does little to dent a region's deep-seated poverty.

Finally, Sanders contends that there are also "opportunity costs" associated with funneling scarce city resources into convention-center developments rather than into projects with a better record of adding economic wealth, such as business-improvement districts. Building upscale hotels in Central L.A., an area with chronic underemployment, doesn't seem a promising economic strategy to upgrade worker skills there and foster industries that have a competitive advantage downtown.

So if the hotel subsidy doesn't make economic sense, who benefits from the largesse? The biggest winner from the new public investment stands to be billionaire Phil Anschutz, whose $2.5-billion, 27-acre L.A. Live project -- billed as "Times Square West" -- is slated to be built adjacent to Staples Center. The refracted prestige of a new Ritz Carlton and luxury condos in the neighborhood would add luster to Anschutz's project, the proposed home of the West Coast headquarters of ESPN and a Grammy Award museum.

For the rest of Los Angeles, however, the payoff is far less obvious. For the last three decades, public investment downtown has been in the form of numerous loans and subsidies to developers, lavish office buildings for state and city workers and, perhaps most expensively, the still largely underused, downtown-centered subway system.

These efforts are the latest chapters in a continuing attempt to reengineer the city's history. Los Angeles was among the first historic downtowns in the nation to lose its economic preeminence to areas to its west, as well as to the San Fernando and San Gabriel valleys, according to historian Robert Fogelson. As architect Frank Gehry and others have noted, L.A.'s "true downtown" long ago relocated along the expanse of Wilshire Boulevard.