LOS ANGELES (CelebrityAccess) A $1.2 billion convention center/hotel expansion of the L.A. Live complex housing the Staples Center, Microsoft Theatre and The Novo would require nearly $100 million in public subsidies according to a report recently considered by a Los Angeles City Council committee.
AEG, which owns the venues, wants the assistance to close a $119 million “feasibility gap calculated by the report, according to the Los Angeles Times. The company also owns the complex’s hotel complex centered by JW Marriott and the assistance would help construction of a new tower with 850 luxury rooms and the city’s largest ballroom. The city’s existing development incentive program would allow AEG up to half of new revenues generated for the city during the construction and 25 years of operation, the Times said.
The $700 million project and a $500 million expansion of the city-owned convention center must proceed together, reportedly according to AEG, for the development to make sense. The Los Angeles Convention Center is considered to be lagging behind facilities in other cities that are drawing the major conventions, and the hotel expansion, with its ballrooms, meeting spaces and other would help get L.A. back in the mix.
Ted Fikre, AEG’s vice chairman, told the Times that luxury hotels that can serve big conventions with ballrooms, meeting space and other amenities are hard to make profitable.
“The combination of expensive development and operating costs makes it very challenging,” Fikre said.
The cost to design and construct the L.A. Live project would be privately funded by AEG; the funding proposal for the convention center relies on a separate public-private partnership model that has been used for other large public developments, according to the paper.