In an 11-2 vote, the Los Angeles City Council approved a $2.62 billion expansion for the Convention Center with the aim of bolstering downtown and preparing the facility for the 2028 Olympics with the move coming despite concerns of rising costs and potential risk that could impact city services for the next 30 years.
The expansion is expected to connect the site's West Hall with the South Hall via Pico Boulevard, adding 190,000 square feet of additional exhibit hall space, and nearly 40,000 square feet of meeting room space, as well as 95,000 square feet for a multi-service room. In a similar vote, the City Council authorized staff to issue $990 million in bonds to fund the project -- with the debt service paid through 2058.
"Our city has faced a series of difficult decisions and circumstances this past year, but with this Convention Center, we must take bold action, invest in projects that don't just cost money but actually make us money because projects that strengthen our economy lift up working families and build strong communities that Angelenos deserve," Councilwoman Ysabel Jurado said, whose 14th Council District includes parts of downtown.
Councilman Curren Price emphasized that they needed to move forward with the project, noting that further delays would result in higher costs because "doing nothing is the most expensive choice of all."
City officials expect the project to generate significant economic impact by adding nearly 9,000 union jobs and 1,600 apprenticeships, $1.8 billion in additional local business sales, $103 million in tax revenue for city services and $3.6 million visitors annually.
With the Convention Center slated to be the venue for fencing, taekwondo, judo, wrestling and table tennis during the 2028 Olympics and wheelchair fencing, taekwondo, judo, boccia and table tennis for the 2028 Paralympics, city officials aim to provide a world-class stadium for the event and attract more visitors to the city in a bid to boost tourism.
City Administrative Officer Matt Szabo presented an updated cost estimate to the City Council, and warned elected officials about the risks associated with the project.
Szabo reported that the initial construction cost for the project was $1.4 billion in June 2024, which later increased to $2.2 billion by March. An August estimate projected the cost at $2.7 billion, however, due to late night negotiations and a cut interest rates, the construction cost decreased by some $500 million, resulting in a $2.62 million project, according to the CAO.
The total cost of the project that will be financed ends up being $3.06 million after adding the capitalized interest and issuance cost, Szabo added. Of that money, approximately $566 million will be set aside for "city- retained costs" to control overages, tariffs on construction materials, electrical service delivery and other unknown risks.
Annually, the city would need to cover $231 million for debt service and operating costs, and with projected revenues from the facility coming in at $142 million, it results in an average annual General Fund impact of about $89 million. Szabo noted that in the early years the debt service payment will be higher.
While officials recognized the project will provide substantial benefits, there are notable concerns with the construction schedule and finances, among other potential issues.
The project will be constructed through a so-called "phased delivery" with completion slated for 2029. Work would be paused during the 2028 Games. The facility must be "Olympic ready" by March 31, 2028, or the city could be on the hook with additional costs if competitions need to be relocated.
For the next three decades, the city will straddle with the project cost, impacting the city's ability to hire and offer services.
Councilwoman Katy Yaroslavsky, chair of the Budget and Finance Committee, opposed the project, citing the risks associated with the project. She had offered a third option to modernize the Convention Center but not expand the site until after the Games, which could have provided an opportunity for the city to control costs and reduce certain challenges. Her proposal failed to gain support.
"This expansion is unrealistic. It's unaffordable and it's fiscally irresponsible. It puts our city at severe risk.," Yaroslavsky said.
"We literally are talking about putting City Hall, the Los Angeles Police Department headquarters and your local LAPD and Los Angeles Fire Department stations up as collateral for this loan," she added. "We just closed a billion-dollar budget gap."
Certain ballot measures further jeopardize the city's finances with attempts to repeal Measure ULA, business and hotel taxes -- that could potentially take away millions of dollars in revenue.
"You'll notice that I have not mentioned the Trump administration, in part, because we can't fathom how bad the federal cuts are going to be," Yaroslavsky said. "We should have done this 10 years ago. One of the arguments that seems to be carrying the day is that our predecessor failed to act for years."
"But when you can't afford something, you don't buy it because it will more be expensive later. You buy what you can afford," Yaroslavsky said.
Councilwoman Traci Park, who supported the project, addressed concerns related to potential delays in work to underground utility lines in Pacific Palisades. A Department of Water and Power confirmed they will not pull staff from recovery work in the coastal neighborhood for the Convention Center.
The project was supported by a coalition of labor, business and community groups, such as the Los Angeles County Federation of labor, the Central City Association, Los Angeles/Orange County Building and Construction Trades Council, among others.
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Mayor Karen Bass and Assemblyman Mark González, D-Los Angeles, endorsed the project too.
"As downtown continues to recover from the pandemic, this expansion is the kind of bold investment that will bring foot traffic back, revitalize small businesses, and restore energy to the heart of our city. There is no other shovel-ready infrastructure project in Los Angeles today that can deliver this scale of impact," González said in a statement.
It also had its critics such as the Howard Jarvis Taxpayer Association.
"The City Council is threatening to saddle L.A. taxpayers with decades of debt payments to pay for a Convention Center expansion that they're rushing to approve in time for the Olympics. It's completely unfair to the taxpayers to put this unaffordable vanity project ahead of all the important priorities placing demands on the city's budget," the Howard Jarvis Taxpayers Association said in a statement.
City Controller Kenneth Mejia urged against the project.
"As long as the city fails to fundamentally change the way it handles its finances and continues to inadequately fund city services for our nearly four million residents, we cannot recommend taking on this project at this time," he added.
Council President Marqueece Harris-Dawson noted it was a "perhaps one of the biggest decisions that the city made."
"It is a decision that, if it goes in one direction, has at least 30 year implications on the budget and beyond. Either way, this decision has an impact on our city for generations to come," Harris-Dawson said.
Council members Bob Blumenfield and Monica Rodriguez were absent during the vote.
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