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L.A. budget chief suggests privatizing Convention Center

City Administrative Officer Miguel Santana says move would save Los Angeles $14 million to $37 million over five years. AEG expresses interest in bidding.

August 06, 2012|By Kate Linthicum and David Zahniser, Los Angeles Times
  • The Los Angeles Convention Center complex is next to two key AEG assets — Staples Center and L.A. Live — as well as the site of the firm’s proposed downtown NFL football stadium.
The Los Angeles Convention Center complex is next to two key AEG assets —… (Allen J. Schaben, Los Angeles…)

After years of pushing for the privatization of more city services, Los Angeles' top budget official took his crusade to pare down city government a step further Monday with a recommendation that lawmakers turn over management of the Convention Center to a private firm.

In a report, City Administrative Officer Miguel Santana said the move would save Los Angeles from $14 million to $37 million over five years and would help the city better compete for lucrative conventions. He advised Mayor Antonio Villaraigosa and the City Council to launch a competitive search so a private firm could be in place by July 1.

One potential candidate is Anschutz Entertainment Group, which Monday expressed interest in bidding on the contract if the plan is approved. The convention center complex is next to two key AEG assets — Staples Center and L.A. Live — 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.

Santana's proposal drew negative reviews from city labor leaders, who were wary of last year's decision to hand over management of a city-run animal shelter to a nonprofit. They oppose a similar effort to let a private operator manage the Los Angles Zoo.

Since the recession hit four years ago, budget-crunched officials in Los Angeles have been forced to evaluate what it is, exactly, that cities must do.

Police, fire and street services are deemed basic obligations to taxpayers. But what about a convention center?

Villaraigosa supports the plan to bring in an outside firm, citing the success of privately managed convention centers in Chicago and San Francisco. So does City Councilwoman Jan Perry, who said a private sector firm would be able to operate with "more flexibility" than city staff.

The city employs 113 people at the Convention Center. Under Santana's proposal, 101 of them would transfer into open positions in other city departments. The private operator would be required to employ the remaining 12, who have jobs unique to the Convention Center, for at least 90 days.

Lowell Goodman, a spokesman for Service Employees International Union Local 721, said his group opposes the proposal because it would replace city staff with cheaper workers. He contended that Santana was pursuing the "Wal-Martization of the city workforce" and pointed out that the city could lose out on future revenue.

"We are against handing control of an important public asset like the Convention Center to a private operator," Goodman said.

According to Santana, the convention center essentially runs on a deficit. Although conventions and trade shows pay for themselves, the city spends more than $48 million a year.

Santana blamed bad management for the center's poor record of attracting large conventions, which draw attendees from outside of the region. Those types of events help generate city tax revenue because participants stay at local hotels and eat at restaurants.

He lambasted the Convention Center's booking policy, which he said favors trade and consumer shows, which attract a more local crowd. He said hiring a private manager and expanding the power of the Convention Center's oversight board would help the city lure bigger events.

"Our biggest competition is Sacramento," Santana said. "And with all due respect to Sacramento, Los Angeles is an international city and we should be competing with Chicago, New York and San Francisco."

kate.linthicum@latimes.com

david.zahniser@latimes.com

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