Last month the L.A. Convention Center announced a $3.3 million profit for 2014. The first-ever profit at the Convention Center was the result of a new partnership between the City of Los Angeles and AEG to operate the facility.
AEG, the owner and operator of Staples Center and L.A. LIVE, made hundreds of big and little changes at the Convention Center to eliminate a perennial operating deficit. AEG operates or manages a network of 120 sports and entertainment venues on five continents. They drew on this expertise and utilized more than 30 new contactors to improve efficiencies, increase aesthetics and save money on new technology.
“Converting to a private sector contract to operate the Convention Center was a bold experiment and AEG’s performance has exceeded our highest expectations,” said Bud Ovrom, executive director of the Los Angeles Department of Convention & Tourism Development, which has management oversight of the Convention Center. “We’ve observed a significant invest in preventative building maintenance as well as the completion of numerous projects ranging from painting to washing all the windows and improving the lighting systems throughout the building.”
The partnership between AEG and the City of L.A. not only saved the City money in operating costs, but also it will mean more tourism and convention business for the L.A. area in the future. AEG knows how to bolster efficiencies, but they also know how to market a facility to generate new entertainment opportunities, more visitors and new sources of revenue.
With this success as an example, the City should start looking for more opportunities to partner with the private sector to reduce short and long-term city operating costs; and to invest in infrastructure and technology improvements that will enhance the quality of life for all Angelenos. The Chamber will be collecting your suggestions for privatization.