If the City of Los Angeles decides to tackle the overhaul of the L.A. Convention Center by itself, it will be $250 million more expensive than the initial $470 million quote, a new report found.
However, there are options. The report, from City Administrative Officer Miguel Santana, offers an alternative to paying $720 million for renovations on the outdated center at 1201 South Figueroa Street: a $1 billion private partnership that would result in greater savings down the road.
Under this option, a private developer would design and finance the property and develop it into a mixed-use complex that includes housing, retail and a hotel, L.A. Downtown News reported.
The project has been in the talks for decades. The City previously considered going the private route, in which Anschutz Entertainment Group would spearhead the renovation as part of its Farmers Field stadium proposal. But the stadium efforts failed, and the city began to pursue a self-financed version of the plan. Last June, it picked Populous and HMC Architects to design the project.
The new report by Santana, however, suggests that the $470 million the city expected to spend on the project would not be nearly enough when accounting for “soft” costs such as design and legal work.
“One thing to note is that the Bureau of Engineering has made it crystal clear that $350 million is their construction budget,” Convention Center Executive Director Bud Ovrom told the Daily News. “If it comes in higher, we would cut something out.”
But the city doesn’t have to fight tooth and nail to come up with the additional funding, according to Santana. In February, he proposed the “P3” private-public partnership that would revamp the Center to a greater extent.
A public-private partnership isn’t unprecedented for L.A. The city has long had a relationship with AEG. The firm currently runs the convention center alongside the city authorities. But this connection may be strained, as the entertainment firm announced last month it was pulling out of the development of a 755-room hotel on Olympic Boulevard next to the Convention Center because of competition form the city’s own on-site hotel.
“It runs against the grain, as a P3 is not the traditional way that buildings get built by the city,” Santana said earlier this year. “But given the amount of real estate here, this is a once-in-a-lifetime opportunity, and we can do it while minimizing financial risk.”
The City Council’s Economic Development Committee will discuss his latest report when it reconvenes. [LADT News] — Cathaleen Chen