Budget committee backs short-term ‘modernization’ of LA Convention Center, sends plan and wider options to full council

The Los Angeles City Council Budget and Finance Committee on Sept. 16 voted to send the committee chair’s amended recommendation — favoring a shorter-term modernization of the Los Angeles Convention Center and directing staff to report back on a competitive process for a larger expansion after the 2028 Olympics — to the full council for consideration.

The committee moved the amended plan by Chair Zev Yaroslavsky and Councilmember Blumenfield and approved it 3-2 (Yaroslavsky and Blumenfield and Councilmember Hernandez voting yes; Councilmembers Hutt and McCosker voting no). A competing motion to send the item to full council without a committee recommendation failed 3-2 earlier in the meeting.

The vote follows months of debate and a week of renewed scrutiny after new information arrived from state and project partners. City Administrative Officer Matt Szabo told the committee the project’s revenue assumptions had changed after amendments to AB 770 in Sacramento and that the city can no longer assume the previously advertised $61 million a year from freeway-facing digital signage. "If the governor signs AB 770 as it was passed, it would have no positive impact to the convention center expansion project," Szabo said, noting updated projections that count only on-site signage revenue and reduce estimated signage income to about $38 million per year.

Chief Legislative Analyst Sharon So summarized the committee’s fiscal concern: the office’s latest analysis, she said, leaves a net general-fund gap of roughly $100–111 million per year on average over the bond term — and much higher debt service in the early years. "The bottom line is it will not generate enough and so the additional general fund will have to come from somewhere else," So told the committee.

Members repeatedly cited schedule risk tied to Olympic readiness and the Department of Water and Power’s (LADWP) outstanding technical work. Senior Assistant General Manager Dave Hanson told the committee LADWP had been given updated load and schedule information as recently as the morning of Sept. 16 and that the department was still finalizing the scope and potential contractor requirements tied to circuit relocations and a new network station. "There are 27 different relief events associated with the contract…15 of them fall on the city for responsibility and control," Hanson said, describing how missed city approvals or required relocations could create compensable delays.

Bureau of Engineering officials said the project is proceeding as a design-build delivery and expected to deliver a 100% design-development package imminently, which in a design-build model places remaining design completion and most change-order risk with the contractor. Bureau staff also proposed city staffing additions for oversight if the project goes forward under the current agreement.

APCLA (the developer joint-venture on the project) representatives and dozens of business and labor groups urged approval in public comment, emphasizing jobs and regional economic impact. Labor and hospitality unions, business groups and downtown resident associations said a modern convention center would restore visits, hotel occupancy and downtown economic activity.

The committee’s motion directs the CAO, CLA and relevant departments to close out current activities tied to the full expansion delivery method, use the existing early-works investment to deliver a shortened ‘modernization’ scope that can be completed before the Olympics (electrical and signage upgrades to the extent permitted by law, accessibility and technology/back-of-house improvements, certain repairs and plaza work), and report back within 30 days with cost and implementation plans. The motion also requires a 120-day report on options for a future competitive RFP to expand the LACC footprint after the 2028 Games.

Committee members and staff emphasized the difference between discussion and formal outcomes: the committee did not adopt the full expansion under the current delivery agreement and did not award bonds at the meeting. The committee approved consent items 3–14 earlier in the session (vote 5–0) and approved a separate City Attorney contract augmentation (Gibson, Dunn & Crutcher LLP) on item 30 by 4–1 vote later in the meeting.

The full council will receive the committee’s recommendation Friday; the council will consider public comment and the CAO/CLA analyses before any final action on financing or bond issuance.

"This is one of the most consequential decisions any of us will make as council members, certainly financially," Chair Yaroslavsky said at the start of the discussion. "I want to make sure that we have all the information before us and have had time to fully understand the implications of moving forward."