Los Angeles Convention Center Achieves Major Milestones Under AEG Facilities' First Seven Months of Management
Sep 22, 2014
Los Angeles, CA (September 22, 2014) The Los Angeles Convention Center (LACC) has reached several key and significant financial and other performance milestones since AEG Facilities took over the management of the city-owned facility in December 2013.
Just prior to the venue’s transition to AEG Facilities’ management team, the City of Los Angeles projected a deficit of $2 million for the fiscal year which ended on June 30th, 2014. With AEG Facilities, the world’s leading venue management organization, taking control of the downtown Los Angeles Convention Center half-way thru the fiscal year, forecasts began to indicate a financial turnaround was underway and, with final figures now available for the year which concluded June 30, 2014, a $290,000 operational surplus was reported.
Other financial milestones reached for the LACC during the same period include parking revenues increasing by $1 million, wages and salaries finishing $1.5 million lower than the previous year, increased usage and revenue from film and television production by 140% while new sustainability programs initiated in just the past six months have decreased electrical usage by 2% and decreased water usage by 10% year to year.
“Transitioning the Los Angeles Convention Center from a publicly operated entity to private management was a major undertaking, one that AEG Facilities implemented seamlessly,” said Bud Ovrom, Executive Director of the Los Angeles Department of Convention & Tourism Development. “We are very pleased with what AEG accomplished this first year, not only significantly improving the operational efficiencies and the bottom line, but also improving the customer service, security and overall maintenance of our convention center. It took bold political leadership for this City to privatize management of one of our major public facilities, and we know now that selecting AEG Facilities as our partner to embark on this endeavor allowed us to successfully overcome the many challenges and set the LACC on a better course,” continued Ovrom.
Under the leadership of new General Manager, Brad Gessner, and activation of AEG 1SOURCE, the LACC has solicited, negotiated and completed over 30 new contracts with service providers, contractors, and suppliers to reduce costs. Waste Management was selected as the new provider for waste hauling, recycling, and trash compactors, which will save the facility $50K in operating expenses annually.
“We are extremely proud of the positive achievements already made at the Los Angeles Convention Center in such a short period of time”, said Bob Newman, President of AEG Facilities. “The staff, with the full and unwavering support of the City, has created a true service culture that event planners are already recognizing as best in class in the industry.”
In a very short transition period, AEG also implemented the initial hiring and training of 82 fulltime and 75 part-time employees in 2013, followed by an additional 25 more employees brought on in 2014. Under the new management structure, the current job count of 91 full and 91 part-time employees can be compared to a peak of 200 fulltime employees when the City managed the LACC.
In addition to providing full management services for the LACC, AEG Facilities also provides support to the Los Angeles Tourism and Convention Board (LATCB) in its efforts to attract Citywide Conventions, tradeshows and corporate events and propel the LACC into a top convention destination while enhancing the customer and client experience.
Milestones and other highlights since the transition to AEG Facilities’ management include:
- Budget forecast received from the City department last November anticipated a deficit of $2.0 million for the fiscal year FY-14. AEG Management LACC, LLC re-forecasted a $1.6 million shortfall in February 2014. Actually finished the fiscal year on June 30th with a $290,000 surplus.
- Increased parking revenue by $1 million compared to the prior fiscal year.
- Wages and salaries finished $1.5 million lower than prior fiscal year.
- Reduced overtime expenses from Los Angeles City historical expense of $800K annually to $120K, a reduction of $650K year-over-year.
- Hosted and event-managed a total of 167 events held over 298 event days from December 2013 through June 30, 2014.
- Reduced utilities usage by implementing an energy conservation programs which resulted in the reduction in electrical usage of 2% year-over-year.
- As of June 30th, 2014 LACC has hired a total of 91 full-time employees and 91 part-time employees, compared to a peak of 200 full time employees when the City managed the LACC.
- Initiated and completed AEG’s “Encore” Guest Services training to all employees, partners, and contractors.
- Improved overall security and building coverage by increasing staffing numbers and conducting thorough training.
- Developed new marketing plan and initiatives to improve short-term bookings and assist the LATCB with Citywide bookings.
- Developed sales initiatives to increase LACC usage for feature films, TV and advertising film shoots resulting in an increase of filming revenue by 140% year over year.
- With the assistance of AEG 1SOURCE, LACC has solicited, negotiated and completed over 30 new contracts with service providers, contractors and suppliers.
- Implemented and improved the MBE/WBE/SBE/DBE/EBE participation completing 11 contracts worth over $1 million in annual spend for 30% MBE+ participation.
- Transitioned from an exclusive, in-house Utility Provider Program to an Approved Vendor Program completing three contracts with Approved Vendors. This has been well received by LACC Licensees as they now have choices and can negotiate price and terms for event utility services, something they never had before.
- Solicited bids and awarded a contract for preferred audio/visual services, eliminating the need for an AV department in-house and saving related operating expenses. Encore AV was awarded the contract.
- Solicited bids for a Business Service Center operator that resulted in awarding a contract to “ImageQuest”, a local MBE/WBE contractor. The City department had been unsuccessful in attracting and retaining a Business Service Center operator.
- Levy Restaurants implemented the “Taste of LA” food & beverage program with focus on procuring local vendors and products, while reducing the LACC’s carbon footprint.
- Groundwork Coffee replaced Starbuck’s as the specialty coffee provider for the LACC. Groundwork is a local Los Angeles coffee company that serves exclusively USDA-Organic certified coffees and teas, has an extensive sustainability program, and active social responsibility program.
About the Los Angeles Convention Center
The Los Angeles Convention Center (LACC) is one of the most technologically advanced convention and exhibition centers in the world. Operated by AEG Facilities, the LACC attracts more than 2.5 million visitors annually and is renowned internationally as a prime site for conventions, trade shows and exhibitions. An integral economic component to the Southern California area, total sales from client secondary spending tops $1.1 billion annually, generating and sustaining over 12,000 local jobs. LACC is a model environmental-friendly facility, holding the prestigious US Green Building Council’s LEED-EB GOLD Certification. LACC is also a Bronze Level recipient of the California Award for Performance Excellence (CAPE), Eureka Award. For more information, please visit lacclink.com.
About AEG Facilities
AEG, a wholly owned subsidiary of the Anschutz Company, is the leading sports, entertainment and venue operator in the world. AEG Facilities, a stand-alone affiliate of AEG, owns, operates or consults with more than 100 of the industry’s preeminent venues worldwide, across five continents, providing complete venue management, as well as specialized programs in operations, guest services, ticketing, booking, sales and marketing. AEG Facilities also provides resources and access to other AEG-affiliated entities, including live event producer, AEG Live, AEG Global Partnerships, AEG Development, AEG 1Earth, AEG Encore and AEG Creative to support the success of AEG venues and events across the globe. For more information, please visit aegworldwide.com.
Michael Roth Cassandra Zebisch
(213) 742-7155 (213) 763-7712
Los Angeles Convention Center