UPDATE: Nov. 14, 2018: The Los Angeles City Council's Economic Development Committee has voted to approve Anschutz Entertainment Group's proposed $1.2 billion expansion of the city's convention center and nearby JW Marriott hotel.
An analyst's report presented at the meeting indicated that AEG has a gap in financing for the hotel expansion portion of the development, determined by the council's third-party consultant to be $119.4 million. However, the committee approved a financial incentive for AEG of 50% ($97.7 million) of the net new revenues of $195.5 million expected to be generated by the project's construction and 25 years of operations.
For the Populous-designed convention center expansion, the committee approved an exclusive negotiating agreement that gives AEG the right to negotiate final agreements for the expansion. This would allow AEG to move forward with project plans. AEG will serve as the developer, with the Plenary Group as its partner in a public-private partnership with Los Angeles under a design-build-finance-operations-maintenance (DBFOM) agreement.
The plan will now go before the city council and mayor for approval.
- Anschutz Entertainment Group (AEG), global presenter of live music and sporting events, has proposed a $1.2 billion expansion of the Los Angeles Convention Center and the nearby JW Marriott L.A. Live hotel, according to the Los Angeles Times, to be carried out under a public-private partnership (P3). AEG currently operates the convention center, last updated in 1997, and city tourism officials say Los Angeles is losing $1 billion a year because of the old venue.
- AEG wants to spend $500 million on a 350,000-square-foot addition to the convention center, including 250,000 square feet of new meeting rooms, bringing the total area of the venue up to 1.2 million square feet and creating 800,000 square feet of exhibition space, which is key to attracting new business. Also part of AEG's plan is a $700 million addition to the existing hotel. The new 850-room, 40-story hotel, which would include the largest ballroom in Los Angeles, would connect to the Marriott and the convention center via a pedestrian bridge.
- The project would create a 100-acre campus of entertainment, hotel and meeting options that, according to AEG, could win out over other California venues when it comes to bringing home convention dollars. AEG would likely finance the project, which could be complete as early as 2021, with reported partner Plenary Group, through its own funds and private debt, with reimbursement from the city in the form of a break on transit occupancy taxes and other revenue, all of which has yet to be decided.
Cities all over the U.S. are updating and expanding their existing convention centers and hotels at full speed and creating plenty of construction jobs along the way.
The Las Vegas Convention and Visitors Authority (LVCVA) expects its $1.4 billion expansion and redesign of the city's convention center to generate 14,000 construction jobs. When complete, the updated venue will connect to the Las Vegas Strip and is projected to draw at least 600,000 new visitors a year. As part of the addition, the convention center will also feature 600,000 square feet of coveted exhibition space. The LVCVA will be able to use proceeds to finance its own construction from the same hotel tax that is helping build the new $1.8 billion stadium for the NFL's Oakland Raiders franchise.
The Washington State Convention Center (WSCC) in Seattle finally got the go-ahead this week to start construction on a $1.6 billion addition to that facility. Like the Los Angeles Convention Center, WSCC officials said their outdated venue was costing them big money – more than $1.5 billion a year in lost meeting, convention and trade show revenue. The project is expected to create 6,000 construction jobs.