Three years of AEG Management Leads the Los Angeles Convention Center to $6.1 Million in Reserves and an annual Operating Surplus
Dec 20, 2016
December 20, 2016 (Los Angeles, CA)- December marked AEG Facilities and the City of Los Angeles three-year anniversary of a successful partnership. The private and public entities have worked together to reinvigorate the Los Angeles Convention Center (LACC) turning into an excellent economic driver for downtown Los Angeles. Key highlights of the three-year partnership include record-breaking financial results, surpassing the City’s goal of building a financial reserve, new sales and marketing initiatives, and capital improvement projects upgrading the building.
On December 8, 2013, AEG Facilities assumed management of the Los Angeles Convention Center. Since the transition, the LACC has reported increasing operating profits every fiscal year from $1.7 million in the first year of management to $8.1 million in 2016. In the span of three years, AEG Facilities has generated an operating profit of over $11.8 million after reimbursing the City of Los Angeles $4.6 million for the Department of Convention & Tourism Development (CTD) overhead. Additionally, AEG Facilities has surpassed the City’s initial goal of building a financial reserve of $2.1 million in five years with $6.1 million at the conclusion of 2016.
“The financial accomplishments of the Los Angeles Convention Center in these past three years are testament to an effective and efficient public/private partnership. Revenues are up, expenditures are down and we have turned a profit every year. This is a partnership that is flourishing and we have the stats to prove it,” stated Bud Ovrom, Executive Director of the Los Angeles Department of Convention & Tourism Development (CTD). The financial success of the LACC is due to key operational improvements with increases in revenue from parking, food and beverage, event rental, and related revenues.
Since LACC’s transition to private management, AEG Facilities has developed a new approach to sales and marketing of the Center. The Convention Center’s brand was relaunched via a new website and a more entrepreneurial approach has led to more events being booked. The LACC and the Los Angeles Tourism and Convention Board (LATCB) continue to successfully interface and partner to book Citywide conventions and special events which provide a significant economic impact to the City of Los Angeles. Through this partnership, the number of citywide conventions has increased over 86% from the three years prior. “The relationships between Los Angeles Department of Convention & Tourism Development, AEG Facilities, and the Los Angeles Tourism and Convention Board have never been better. We have worked collaboratively in marketing and sales and after three years have seen our efforts result in increases in Citywide Convention bookings that drive material revenue/economic impact to the City of Los Angeles,” commented Jon F. Vein, President, Board of Los Angeles Convention & Tourism Development Commissioners.
Additionally, filming revenue from commercial, television, and feature film shoots has increased by over 20%, with over 100 film projects booked from 2013 to 2016. In regards to marketing, all social media channels for the LACC have consistently grown to support clients and the LACC brand. The LACC has also developed interactive floorplans and virtual tours, accessible on the improved website, that serve as helpful tools to meeting planners and clients.
Reaching $6.1 million in reserves and creating substantial operating surplus has created the opportunity to take on imperative capital and alteration and improvement projects. Between 2014 and the conclusion of this calendar year, $30 million will have been invested in the Convention Center in the form of completed and in progress capital improvement and alterations projects funded through the City of Los Angeles and the annual operating surplus achieved through AEG Facilities’ management of the LACC. A few of these projects include the addition of 190 security cameras installed throughout the facility along with a modernized security command center, 20 magnetometers (metal detectors) to further elevate safety and security procedures, installation of water saving toilets and urinals, carpet replacement in public spaces, and the re-landscaping of turf with 30,000 square feet of native and drought-tolerant vegetation to conserve water and aid with the Los Angeles drought, among other projects. “In accordance with best business practices, we believe in appropriating our operating surplus towards sustaining and improving the LACC Facility. Since 2013, the LACC has completed and/or is in progress of over 40 capital and alteration and improvement projects to provide a modern, safe, environmentally conscientious, and competitive facility, “stated Brad Gessner, General Manager of the Los Angeles Convention Center and Senior Vice President at AEG Facilities.
The prosperous partnership between AEG Facilities and the Los Angeles Convention Center has seen three years of growth and success. As 2016 comes to a close and we celebrate three years of achievement the LACC anticipates the relationship will further develop and continue to surpass expectations to achieve the overarching goal of prosperity for the City of Los Angeles in 2017.
Alexa M. Diaz
About the Los Angeles Convention Center
The Los Angeles Convention Center (LACC) is renowned internationally as a prime site for conventions, trade shows, and exhibitions. Professionally managed by AEG Facilities, the LACC attracts over 2.5 million visitors annually. The facility is an integral economic component to the Southern California area; based on historical averages the total economic impact based on direct and indirect spending is $548 million annually, generating and sustaining over 5,900 local jobs. The LACC also remains an enduring symbol of environmental sustainability and social responsibility, and is proud to be a LEED® Gold certified facility; the venue was recertified on the Gold level in 2015 making the LACC the largest convention center in the U.S. to receive LEED® EB:O+M Gold recertification. For more information, please visit lacclink.com.
About AEG Facilities
AEG, a wholly owned subsidiary of the Anschutz Corporation, 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 across the globe. The Los Angeles-based organization owns, operates or provides services to the world’s most elite venues, including KFC Yum! Center (Louisville, Ky.), STAPLES Center (Los Angeles, Calif.), StubHub Center (Carson, Calif.), Microsoft Theater (Los Angeles, Calif.), Los Angeles Convention Center (Los Angeles, Calif.), Sprint Center (Kansas City, Mo.), AmericanAirlines Arena (Miami, Fla.), Prudential Center (Newark, N.J.), Target Center (Minneapolis, Minn.), BBVA Compass Stadium (Houston, Texas), Oracle Arena and O.co Coliseum (Oakland, Calif.), CONSOL Energy Center (Pittsburgh, Penn.), Valley View Casino Center (San Diego, CA), Rabobank Arena (Bakersfield, Calif.), Puerto Rico Convention Center (San Juan, PR), Hawaii Convention Center (Waikiki, HI), Mercedes-Benz Arena (Shanghai, China), MasterCard Center (Beijing, China), The O2 Arena (London, England), AccorHotels Arena (Paris, France), Mercedes-Benz Arena (Berlin, Germany), Barclaycard Arena (Hamburg, Germany), Ahoy Arena (Rotterdam, Netherlands), Itaipava Arena Pernambuco (Recife, Brazil), Allianz Parque (Sao Paulo, Brazil), Allphones Arena (Sydney, Australia), Ülker Sports Arena (Istanbul, Turkey), Ericsson Globe Arena (Stockholm, Sweden) and the Oman Convention, and Exhibition Center (Muscat, Oman). For more information, please visit aegworldwide.com.