L.A. Live: City Could Get Starring Role
By Margo McCall -- Tradeshow Week, 9/27/2004
Millions of starry-eyed tourists are drawn to Los Angeles each year, mostly by its entertainment industry cachet. But members of the tradeshow set — seemingly more interested in nitty-gritty than glitz — routinely pass over the country's second-largest city in favor of destinations better able to handle their needs.
Los Angeles hopes to change that with Anschutz Entertainment Group's L.A. Live, a 4 million square foot entertainment complex adjacent to the city's convention center. Over the next decade, the $1-billion project will add a 7,000-seat concert theater, a 4,000-seat multiplex theater and numerous restaurants and bars. Most importantly, it will add a 55-story hotel with 900 "Sheraton-quality" rooms, 300 "Ritz Carlton-caliber" rooms and 100 condominiums, said project spokesman Michael Roth.
This isn't the first time a headquarters hotel has been proposed to help boost the L.A. Convention Center's viability as a major tradeshow site. But prospects for obtaining private financing for the project appear much better now than they did in the early 1990s, when a recession gripped the region and a plan to use redevelopment money for the hotel was nixed.
"It's a common story — create a political consensus around a solid financing plan," said Michael Collins, executive vice president of L.A. Inc., The Convention & Visitors Bureau. Collins expects the developer's proposal to go before the Los Angeles City Council in the next two months.
One thing that makes the hotel more certain this time is the fact that it's part of a larger development proposal. Collins said 30 to 40 percent of the hotel occupancy would be generated by the convention center, and the rest by restaurants and theaters. "A headquarters hotel needs to be able to draw business other than the convention center," he said.
Headquarters hotels are notoriously difficult to get off the ground for a number of reasons. It's not uncommon for existing hoteliers to oppose public financing of a hotel deemed to be a future competitor. That was initially the case in Los Angeles. But with downtown hotel occupancy rates hovering around 55 percent, opposition has faded. Collins said hoteliers understand that headquarters hotels typically drive demand, creating a benefit for nearby hotels.
And just because the city is able to draw 22 million visitors a year as a result of its other attractions doesn't mean that Los Angeles doesn't need its convention business. "It has a fundamental impact on cities' downtowns," Collins said.
The L.A. Live project is expected to quickly pay for itself, according to even the most conservative studies, he said. Part of the reason is that the convention center is already a suitable size. Collins said its $500-million expansion was completed with the idea that adjoining hotels would be built. "There were 10 or 11 hotels on the drawing board and only one of them got built," he said.
Without an adequate hotel room block, conventions went to other Southern California locales, such as Anaheim and San Diego, leaving Los Angeles to weather the recession of the early '90s without that key source of revenue.
The Los Angeles venue has typically attracted tradeshows that cater to locally strong industries or consumer events that draw local audiences. Among its tradeshow mainstays are E3/Electronic Entertainment Expo, which serves the video game industry, and SIGGRAPH, centered around computer generation, a staple of the entertainment industry.
Diversified Business Communications picked Los Angeles as the site to launch its Hispanic food and beverage show, Expo Comida Latina, because the city is home to the country's largest Hispanic population, as well as a high concentration of the targeted food and beverage market.
"It made perfect sense to launch the first show there," said H. Stephen Phillips, show director, adding that organizers had a positive experience working with the venue on a previous show.
Although the 2-year-old Expo Comida Latina isn't yet large enough to fill the planned headquarters hotel, Phillips said the proposed entertainment district is good news for both the city and conventioneers. "Strategically, it's going to be very important to the city. The entertainment district is going to gentrify and enliven that part of the city, which certainly will make conventioneers more comfortable walking around at night," he said.
The Los Angeles Expo Comida Latina, next set for Oct. 3–5, has since expanded to San Antonio in the spring and New York in the fall.
If show managers are paying attention, so are neighboring communities. "It's going to put them in a better competitive spot, no question about it," said Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau. "As they improve it, they'll become a much more viable product and will capture a bigger market share."
Anaheim, just a short drive southeast, boasts the region's largest convention center, with 815,000 sq. ft. of exhibit space, 95,000 sq. ft. more than the Los Angeles Convention Center offers. Anaheim in 2003 hosted 10 Tradeshow Week 200 shows, compared with eight hosted by Los Angeles.
Home to the Disneyland amusement park, the city in recent years built two new hotels under the $4.2-billion Anaheim Resort redevelopment project. As part of that project, a $169-million expansion of the Anaheim Convention Center added 125,000 sq. ft. of exhibit space.
Anaheim now offers 22,000 hotel rooms, and nearly 30,000 more in surrounding areas of the county. The city typically draws about 600 meetings and conventions per year. "It made a huge difference in how we're perceived," Ahlers said of the improvements.
The Anaheim CVB estimates that 1.1 million of the city's 42.7 million visitors last year were convention attendees, on par with the previous year.
The NAMM Intl. Music Market, held at the Anaheim Convention Center for 27 years, recently signed a formal agreement to stay there until 2010. Predictable hotel rates and availability were one reason organizers cited for keeping the more than 550,000 net sq. ft. show in Anaheim, where it's the largest event on the calendar.
Although construction of a long-awaited headquarters hotel in Los Angeles could increase competition between the two cities, Ahlers pointed out that it could also boost recognition of Southern California as a tradeshow hub. "It's all positive for Los Angeles, and it's OK for everyone else too," he said.
Still, the project has a long road ahead. Groundbreaking on the 7,000-seat theater and a parking structure are set to begin early next year, but the entire project will take up to a decade to complete, said L.A. Live's Roth.
For the Los Angeles CVB, the first big milestone will be council approval of the hotel's financing package. Although inquiries from show managers have been coming in fast and furious, until the financing is approved, the CVB can't begin accepting bookings based on the existence of a headquarters hotel.
"That's all our salespeople hear about. If there is an agreement with the city, they can start selling against that immediately," Collins said.
CVB officials are understandably upbeat about the city's convention prospects once the headquarters hotel is built. "If you've got a great building — and we do — and we have a competitive hotel room inventory — which we will — then L.A. is going to win," Collins said. "Why? L.A. is a part of the world that people want to be in. It still seizes the imaginations of a lot of people."
| Show name | Show management | Show size (net sq. ft.) |
| NAMM Intl. Music Market | NAMM Intl. Music Products Assn. | 556,460 |
| E3/Electronic Entertainment Expo | VNU Expositions | 521,000 |
| Medical Design & Manufacturing (MD&M) West, PLASTEC West Pavilion, Pacific Design & Manufacturing, Electronics West, WestPack | Canon Communications | 370,615 |
| Oregon Logging Conference & Equipment Show | Oregon Logging Conference | 355,000 |
| AWFSFair (Assn. of Woodworking & Furnishings Suppliers) | Assn. of Woodworking & Furnishings Suppliers | 347,170 |
| SEMICON West 2003 | Semiconductor Equipment & Materials Intl. | 339,314 |
| San Francisco Intl. Gift Fair (Feb) | George Little Management/Western Exhibitors | 317,455 |
| San Francisco Intl. Gift Fair (Aug) | George Little Management/Western Exhibitors | 316,766 |
| California Gift Show (July) | George Little Management for dmg world media | 307,914 |
| HIA (Hobby Industry Assn.) Convention & Trade Show | Hobby Industry Assn. | 300,500 |
| Source: 2004 TSW 200 | ||
| Facility name | Location | Exhibit space (sq. ft.) |
| Anaheim Convention Center | Anaheim | 815,000 |
| Los Angeles Convention Center | Los Angeles | 720,000 |
| San Diego Convention Center | San Diego | 616,363 |
| Qwest Field & Center (Seahawks Stadium & Exhibition Center) | Seattle | 525,000 |
| Moscone Center | San Francisco | 442,000 |
| Long Beach Convention & Entertainment Center | Long Beach, Calif. | 390,382 |
| Hawaii Convention Center | Honolulu | 350,000 |
| Portland Metropolitan Exposition Center | Portland, Ore. | 349,600 |
| Oregon Convention Center | Portland, Ore. | 315,000 |
| Fairplex | Pomona, Calif. | 300,000 |
| Source: 2004 TSW Major Exhibit Hall Directory | ||
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