I’ve been critical of the LA City Council for years, so I don’t expect a lot from them. But even I was stunned by their vote to approve the LA Convention Center expansion in September. The Council is not known for fiscal responsibility. You may recall that they’ve been struggling to deal with a $1 billion deficit during the current fiscal year. So you’d think the councilmembers would be a little hesitant to plunge the city even further into debt. But on September 19, the LA City Council approved the expansion in an 11 to 2 vote, with two absent. Mayor Bass signed off on it a few days later.
Supporters of the Convention Center expansion promoted it as a great idea, and a crucial step in attracting events to Downtown LA. No one disputes that the Convention Center needed repairs and upgrades, and the expansion could provide benefits. But the cost of the project will bury the City of LA in debt for decades. Don’t take my word for it. Read what LA City Controller Kenneth Mejia had to say about the impacts it will have on the city’s budget….
The City of Los Angeles is currently contemplating a $2.7 billion expansion and modernization of the Convention Center, which will end up costing taxpayers $5.9 billion with borrowing and other costs included, of which $5.45 billion will be paid for by the General Fund. If this plan goes through, the City is projected to need an additional average of $116 million from the General Fund each year for the next 28 years starting in FY2029. $116 million is the equivalent of nearly 1,000 City jobs.
The City isn’t expected to see a related net positive General Fund impact for 30 years (in FY2057 once the debt service payments end). However, at that time, the City will still be down $3.2 billion from the General Fund and will take an additional 25 years or so to truly break even.
Mejia goes on to point out that if the city can’t bring in the revenue necessary to cover the cost of the expansion, it would likely have to make further cuts to funding for city departments, which are already understaffed. The quality of services could decline even further. Beyond that, rating agencies have put the City’s credit rating on negative watch status, which means we could be heading to a rating downgrade. That would make it more expensive to borrow money, raising the deficit even further.
So why did the Council okay this project? Let’s start with a little background. The City has been talking about expanding and modernizing the Convention Center for years, and again, there are certainly good arguments for making that happen. But it was clear that the expansion would be extremely costly, and there were budget conscious folks at City Hall who argued that the City couldn’t afford it. It’s important to remember here that the City of LA has a history of staggering from one budget crisis to the next. Because there’s no meaningful long-term fiscal planning, the City’s budget process invariably involves a lot of wishful thinking and a fair amount of financial sleight of hand.
You would think the fact that the 2025-2026 Budget resulted in a $1 billion shortfall would serve as a clear warning to elected officials that the City was in serious trouble. There were folks at City Hall who saw the flashing red lights and tried to move things in a different direction. On September 16, the Budget & Finance Committee voted to approve a scaled down version of the project, involving repairs and upgrades to the Convention Center now, and deferring the expansion until after the 2028 Olympics. This would have been a much more realistic, much more manageable option. The vote was 3 to 2, with Councilmembers Yaroslavsky, Blumenfield and Hernandez supporting the reduced project. Observers who had been alarmed by the cost of the expansion breathed a sigh of relief. If the City Council accepted the Committee’s recommendations, disaster could be averted.
But on September 19, just three days later, the Convention Center showed up on the Council’s agenda, along with a motion presented by Council President Marqueece Harris-Dawson that ignored the Committee’s action and asked for approval of the expansion. The Council voted 11 to 2 in favor. Councilmembers Blumenfield and Rodriguez were absent. The two no votes were from Nithya Raman and Katy Yaroslavsky. At the meeting, Raman rightly pointed out that the City of LA had just declared a fiscal emergency in June, and spoke about the devastating impacts the project would likely have on funding for public services and homeless programs. Yaroslavsky gave a detailed breakdown of her reasons for opposing, including the likelihood of cost overruns and the unrealistic timetable for completion. Alissa Walker published Yaroslavky’s comments on Torched, and it’s worth taking the time to read them.
The City of LA is becoming increasingly dysfunctional. We have a huge homeless population, and in spite of repeated promises from City Hall, progress has been minimal at best. Transit ridership has been declining since 2014, and still hasn’t even recovered to pre-pandemic levels. Our sidewalks are a mess, and it can take years for repairs to happen. We have a growing solid waste crisis that few people are even talking about, even though illegal dumping has become a chronic problem. And the Palisades fire made it clear that there are serious questions about the City of LA’s ability to deal with disasters.
We could be doing a whole lot better if our elected officials made a serious attempt at planning for the future. Instead, the majority seem determined to ignore reality and pretend that were doing just fine. They give us a lot of talk about their vision for the future, but if you look at the facts, they seem to be flying blind.
The Horizon and the Skyline 