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LA WATCHING - Tossing good money after bad is an old truism widely understood, but strikingly enigmatic for Los Angeles’s political leadership. And it is one reason the city today faces a one-billion-dollar deficit.
A serious case in point is the planned expansion of the Convention Center in time for the Olympic Games of 2028. A project once seen as an important incentive for revitalizing downtown, is now doubtful after the severe wildfires and the pending recovery effort, a costly and arduous undertaking.
However, poor fiscal management was evident long before the devastating fires. Tens of millions were spent on the expansion and renovation of the Convention Center, as earlier approved, only to see that plan scrapped a year later in favor of a new scenario.
Renovating and expanding the Convention Center, which opened in 1971, was a high priority because the archaic layout prevented Los Angeles from capturing major conventions. The coming Olympics has table tennis and other events planned there and this provided an added impetus for its remodeling and expansion.
Ten years ago, I served on Mayor Eric Garcetti’s jury selecting the Convention Center architect for a $350 million expansion event. But the city abandoned that plan after wasting millions of dollars and chose to negotiate a public/private partnership with AEG and Plenary.
Those negotiations were finalized last year and subsequently presented to the city council for approval. Councilmember Monica Rodriguez cast the lone negative vote, expressing concerns over the funding and a timely completion date. Nevertheless, the city council acted recklessly and proceeded to authorize $54.4 million for design, engineering, and preconstruction work. At least $40 million of that money has been spent.
As per this new plan, a report released last year by Chief Legislative Analyst Sharon Tso and Chief Administrative Officer Matt Szabo estimated that the cost to the city would be $4.78 billion over a 30-year period, which includes debt on any loans. They also warned council members that it will be challenging to get the project done before the Olympics.
Despite the warning, and in another careless move, the city council authorized spending $27.7 million to pay consultants to determine if it is feasible to have the expansion completed in time for the Olympic games. Meanwhile the sidewalks are broken, the streets are full of potholes, the streetlights are not maintained resulting in multimillion lawsuits and claims, and trash fees will probably increase by 54%. And half a dozen federal agencies are investigating the homeless program for waste, fraud, abuse and corruption.
It is this persistently poor financial planning and execution that lead to negative consequences, and a one-billion-dollar deficit.
(NICK PATSAOURAS is a civic leader, who has overseen as a volunteer a number of infrastructure projects for LA County Supervisors and Mayors.)
