LOS ANGELES CONVENTION CENTER REPORTS FIRST PROFIT IN YEARS

AMERICAS – Venue operator AEG Facilities has reversed years of financial deficit at the Los Angeles Convention Center and posted the first profits in years ($3.3m) following the centre’s first year in private hands.

The AEG division now running LACC under a four-year contract says the turnaround is due to the company running the venue more efficiently than the local authorities. The company has pledged to invest $80m in the centre, which remains somewhat dated in design.

The new profitability has come at a price for some: senior vice-president and GM Brad Gessner admitted AEG had cut staff from about 200 workers to 91 and a contractor now manages the 5,400 parking spaces at the centre, “running it like a business”. Future commercialisation includes plans to sell advertising in the parking area.

The more businesslike approach is reflected in Gessner’s management attracting more business from television shows, commercials and movies filming at the centre.

For the last five years the centre ran on a deficit, costing the city $48,000 in 2013 and $1.8m in 2012.

The bald figures do not, however, fully take into account the spend in the city due to the trade shows and conventions coming to town and many event organisers remain to be convinced that AEG will deliver more than an upturn in entertainment and sports events – the company’s primary focus.

There are no doubts on the success of the privatisation among those that sold off the centre for the city. “Converting to a private sector contract to operate the convention centre 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 AEG Facilities’ contract as well as the Los Angeles Tourism & Convention Board’s (LATCB) contract for marketing and sales.

Ovrom is convinced AEG Facilities improved operational efficiencies, while reducing the environmental footprint by investing in sustainable products and technology.

“We’ve observed a significant investment in preventative building maintenance as well as the completion of numerous projects ranging from painting to washing all the windows to replacing and improving lighting systems throughout the building,” he said. “These projects have contributed to the positive responses received in the electronic post-show client surveys – the LACC has received an overall rating of 4.5 out of 5. We commend AEG for elevating customer service standards and increasing building security.”

With labour unions relations often crucial to the success of convention centres Stateside, AEG Facilities’ recently concluded negotiations with the Los Angeles and Orange Counties Building and Construction Trades Council AFL-CIO, who represent the Convention Center’s electricians, painters, plumbers, and carpenters, appear to have led to a new optimism.

“This new partnership between AEG and the Building Trades once again shows that fair and professional labour relations are a strong foundation for success in the City of Los Angeles,” said Ron Miller, Executive Secretary of the Los Angeles/Orange Counties Building and Construction Trades Council, AFL-CIO.

Source: CMW