L.A. considers selling rights for electronic billboards on Convention Center
Council committee approves agreement to let developer AEG post and sell advertisements along the 110 and 10 freeways. The city would get at least $2 million a year, plus a portion of profits.
By Phil Willon, Los Angeles Times Staff Writer
September 4, 2008
The Los Angeles Convention Center, for years a bland roadside afterthought for drivers creeping along the 110 and 10 freeways, could soon be plastered with mammoth signs peddling soft drinks and upcoming events at the convention center, Staples Center and Nokia Theatre under a proposal approved by a City Council committee Wednesday.
Under the agreement, the city would collect at least $2 million a year over the next decade by selling the signage rights to Anschutz Entertainment Group, owners of Staples Center. The agreement would bring steady revenue to the city at a time when the sluggish economy has forced budget cuts and fee hikes.
But the prospect of stripping more ads across the downtown cityscape and along two busy freeways has raised the ire of at least one critic, who says L.A. already is overwhelmed by gargantuan billboard images of Kobe Bryant, McDonald's hamburgers and other advertisements.
The agreement deals only with the business arrangement between Anschutz Entertainment, also known as AEG, and the city, and still must be considered by the full council. Issues related to the location and size of the signs that would adorn the convention center will be considered separately and must go before both the planning commission and the council for approval.
"In tough budget times, we in the city have to look for creative ways to raise revenue," said Councilwoman Janice Hahn, who chairs the Trade, Commerce and Tourism Committee that approved the agreement. "Do we want to increase fees, or do we want to get revenue from a source that's never existed before?"
Councilwoman Jan Perry, whose district includes downtown, said the signs wouldn't affect any residential neighborhoods, so "lights won't be flashing into people's bedrooms." The area surrounding the convention center and Staples Center already is designated as a sports and entertainment zone, she said.
Venice resident Dennis Hathaway, president of the Coalition to Ban Billboard Blight, said that erecting big signs on the vast walls of the convention center would be a distraction for drivers and would amount to another sensory assault on residents.
"The public spaces of the city, the visual landscape of the city, belongs to the people of the city. It's not just something for the city to sell off to advertisers," Hathaway said. "You can't drive anywhere, you can't walk around anywhere, you can't look anywhere without a commercial message in your face. This is a terrible, terrible trend."
City officials say that any proposal for signage on the convention center would be heavily scrutinized. AEG officials say the signs would stay in line with those already in the area.
"We are working on a plan that will be consistent with the existing signage at the sports and entertainment district, which has already been completed and approved," said AEG spokesman Michael Roth.
AEG is a subsidiary of Anschutz Co., whose founder and chairman is Denver multibillionaire Phil Anschutz. The sports and entertainment company is developing the $2.5-billion L.A. Live complex, which includes the Nokia Theatre and will feature movie theaters, restaurants and a luxury hotel across the street from Staples Center.
The agreement would give AEG exclusive rights to sell commercial advertising on signage outside of the convention center. Those signs, which AEG would erect and maintain, would include electronic displays, message boards and standard, static signs.
On the electronic displays, 25% of advertisements must be devoted to promoting events at the convention center, Staples Center or L.A. Live; 25% could be used for official "sponsors" at AEG facilities, such as soft drink companies or convention exhibitors; and AEG could sell the remaining 50% to commercial advertisers.
If the agreement is approved, AEG will initially pay the city $2 million a year, increasing that payment by 3% a year for a decade. The city also would receive 25% of AEG's first $5 million in net profits on the signs; 50% of the profits on the next $5 million; and 75% of the profits on the next $5 million. The city could extend the agreement for an additional 20 years.
Beer advertising would be allowed under the agreement, but ads for other alcoholic beverages, tobacco products, firearms or adult entertainment would be banned.
The city had agreed to provide signage rights to an AEG affiliate, the L.A. Arena Land Co., in 1998, but that agreement was delayed until the convention center area was more developed and financial arrangements could be worked out, said Pouria Abbassi, the convention center's general manager. Currently, the signage outside the center is minute, he said.
"We were looking to have a forum in which we could advertise and promote our events," he said.
The new signage would help attract more visitors to convention center events, and some of the proceeds could be used to improve the facility, he said.
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