Privatization Proves to be the Right Choice for City-owned Los Angeles Convention Center

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Privatization Proves to be the Right Choice for City-owned Los Angeles Convention Center

1/29/2015
Privatization of the Los Angeles Convention Center (LACC) has proven to be effective in improving operational efficiency, enhancing building maintenance and aesthetics, and increasing client and attendee satisfaction while saving millions of dollars for the City’s General Fund.

“Converting to a private sector contract to operate the Convention Center was a bold experiment and AEG’s performance has exceeded our highest expectations,” remarked 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.

AEG Facilities improved operational efficiencies, enhancing facility functionality and aesthetics, 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. Undeniably, 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. In addition to enhancing the overall maintenance of the facility, we commend AEG for elevating customer service standards and increasing building security,” added Ovrom.

AEG Facilities has also instituted new polices and upgraded amenities to support the LACC’s commitment to excellence by partnering with industry-leading contractors to offer resources and event support to meeting and event planners. AEG 1Source and the LACC negotiated and completed over 30 new contracts with service providers, contractors, and suppliers to reduce costs. “Utilizing the approved-vendor model has allowed the LACC to open up its partnership opportunities and bring in the best talent to support shows and events of all types and sizes held at the venue,” said Ovrom. “AEG has also drastically increased the business inclusion program, exceeding the 20% goal put forth by the City,” concluded Ovrom.

In addition to improved operational efficiencies and upgraded amenities, a notable component of LACC’s success has been the strategic use of technology. “In order to stand-out and compete in our industry we have embraced technology and strengthened our communication channels. The modernization and launch of LACC’s new, user-friendly website and integration of its social media platforms has given the Center a cohesive voice and a consistent presence in the online community. We value engaging with our audience and find these channels to be very effective in our communication strategy. 2015 will continue to bring exciting improvements to the LACC both on and off-line,” commented Jon F. Vein, President, Board of Los Angeles Convention & Tourism Development Commissioners.

Maintaining peaceful labor relations during the transition from public to private management has also contributed to AEG Facilities’ successful management of the LACC. Recently, AEG Facilities successfully completed 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. “This new partnership between AEG and the Building Trades once again shows that fair and professional labor 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.

In the realm of finance, transitioning the LACC from a publicly operated facility to private management has been a great success for the City of Angels. According to City records, privatization of the Los Angeles Convention Center had the potential of reducing City General Fund costs by approximately $2M-$6M in the first year. AEG Facilities’ management of the LACC has met the aforementioned goal of improved fiscal responsibility in its first year of operations.

“The convention industry is a huge economic force for Los Angeles and AEG Facilities has collaborated extensively with the LATCB to secure new business for L.A. in just its first year. We look forward to a productive and rewarding year as we work in tandem to attract Citywide Conventions, tradeshows and corporate events in our effort to drive the LACC to a top tier convention destination,” commented Ernest Wooden Jr., President and CEO of LA Tourism.

“The synergy created by the partnership between the City, the LATCB, and AEG Facilities has contributed to the overall success and improvement of the city-owned facility and continued collaboration will propel the LACC to be recognized as an industry leader,” added Jon F. Vein, President, Board of Los Angeles Convention & Tourism Development Commissioners. AEG Facilities and the City of Los Angeles are proud of the positive achievements privatization has brought to the facility in such a brief period of time. “We look forward to an even better second year,” concluded Brad Gessner, Sr. Vice President & General Manager Los Angeles Convention Center, AEG Facilities.

About The Los Angeles Department of Tourism & Convention Development
The mission of the Los Angeles Department of Convention and Tourism Development (CTD) is to attract and host conventions at a world class facility with world class service and to drive economic development and job creation by marketing the City’s unique cultural, sports, entertainment, and leisure attractions that make visiting the City of Angels an unparalleled experience. The CTD Department is comprised of the Executive Director, two Assistant General Managers, and support staff. The CTD Department administers both the AEG and LACTB contracts, develops strategies to expand the tourism and convention industries in Los Angeles, and facilitates capital improvements to the Convention Center.

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 www.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 www.aegworldwide.com.

Contact:
Vkarpilovich@lacclink.com