From Los Angeles Times:
L.A. council approves controversial signs for convention center
The deal with AEG will bring in at least $2 million a year. Separate hearings will be held on the firm's request for 50,000 square feet of billboards and electronic displays.
By Phil Willon, Los Angeles Times Staff Writer
September 11, 2008
The Los Angeles City Council on Wednesday voted overwhelmingly to sell signage rights for the L.A. Convention Center to the owner of Staples Center, a move that could allow dozens of billboards and video displays to sprout on a public facility along one of the city's busiest freeway interchanges.
The agreement grants the exclusive signage rights to Anschutz Entertainment Group, known as AEG, the company that is overseeing the adjacent $2.5-billion LA Live development. In exchange, AEG will pay the city at least $2 million a year over the next decade and also share a portion of the net advertising profits from the signs.
Council members said they were largely swayed by the stream of cash that the deal will deliver to the city at a time when the economic downturn has forced budget cuts and fee increases.
Critics, however, argued that the additional signs would create a visual blight on the downtown skyline and add to the proliferation of billboards in the city, and also questioned whether the city could have struck a more lucrative financial deal.
With the signage rights granted, the city will now hold separate hearings on AEG's detailed plans to adorn the convention center with more than 50,000 square feet of billboards and flashing electronic signs.
The most visible would be two massive signs that would cover portions of the center's landmark glass towers, and four digital billboards would blink out to drivers chugging through the 10 Freeway and 110 Freeway interchange.
Caltrans also must review the plan to ensure that freeway drivers will not be distracted by the signs.
One of the lead architects involved in the convention center's 1993 expansion and redesign said he was "appalled" by aspects of AEG's proposal. AEG wants to hang a 75-by-66-foot sign and a 56-by-50-foot sign on the center's signature features -- the two soaring towers of glass panels and white metal tubing that face South Figueroa Street.
"The glass pavilion is designed for transparency . . . It's a landmark, and when you add a solid panel of that magnitude and size," it destroys that view, Ki Suh Park, managing partner of the Los Angeles-based architectural firm Gruen Associates, told The Times in a telephone interview Wednesday.
Park said he is not opposed to allowing signs but to have such a massive amount would damage the integrity of the design: "Signs should complement rather than overwhelm the building. The scale is a concern."
Park worked with the primary designer of the updated facility, architect James Ingo Freed, who also designed the acclaimed Holocaust Memorial Museum in Washington and was a longtime partner of architect I.M. Pei.
On Wednesday, council members emphasized that they had only approved the business agreement with AEG, and that issues regarding the size, location and features of the signs still must be reviewed by the city Planning Commission and, eventually, will come before the council for a separate vote.
Councilwoman Janice Hahn said the agreement would help invigorate the sports-and- entertainment complex that AEG is developing around the convention center, including Staples Center and the Nokia Theatre, and attract tourists and residents downtown. The greatest benefit, however, would be the money it brings into the city coffers, she said.
"This is revenue we've never had before," Hahn said.
The council approved the agreement 12 to 1, with Councilman Bill Rosendahl casting the sole dissenting vote.
Rosendahl said he was worried that the deal was a taxpayer giveaway to AEG and said the city could possibly bring in more money if other companies were allowed to bid on a convention center signage contract.
Rosendahl also expressed concern that AEG already has benefited from a "sweetheart deal" with the city that granted the company $27 million in tax breaks to build LA Live.
"I don't think it's a great business deal for the city at all," Rosendahl said. "I think it's a great business deal for this private vendor."
Dennis Hathaway of the Coalition to Ban Billboard Blight told council members that their vote would undercut the city's effort to impose a moratorium on new outdoor advertising in Los Angeles because the city itself is ignoring it.
"If you do this, you're basically throwing the sign ban out the window," he said.
AEG and its executives have been major political donors to local politicians, giving hundreds of thousands of dollars to the mayor and his political committees, as well as contributions to more than two-thirds of the council members.
Under the agreement approved Wednesday, AEG will initially pay the city $2 million a year, increasing by 3% a year, for a decade.
The city also will get 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.
Gerry Miller, the city's chief legislative analyst, told the council that AEG was given exclusive rights to hang commercial signs on the convention center in 1998 as part of the Staples Center lease granted by the city. Because of that, other firms were not allowed to bid on the contract, he said.
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Doesn't really sound like that lucrative of a deal.
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