June 2, 2000 - From the June, 2000 issue

Envisioning L.A.'s Downtown as a Destination Place

The media buzz at the Convention Center recently focuses on the DNC's August Convention. But another venture is proceeding that may leave a more permanent mark on the City of Angels: Staples Phase 2, a billion dollar entertainment, retail, and hotel complex encircling the arena. Los Angeles Visitors and Convention Bureau Executive Vice President Michael Collins has been lamenting the absence of just such a development, and TPR welcomes his perspective on Staples Phase 2, the public subsidy debate, and how this project relates to the rebirth of Los Angeles and its Downtown as a "destination."


Michael Collins

Let's begin by revisiting an interview that you did with The Planning Report in 1997. In that interview you said, "The arena, with 250 events per year, will add a lot of life to the streets and bring an element of excitement to Downtown that wouldn't otherwise exist." In your mind has Staples brought that vitality back to Downtown? Has Downtown finally become a destination?

The arena was the beginning of helping Downtown evolve into a destination, but we're not there yet. However, to answer the first part of the question-absolutely. The evidence from restaurant business is that Downtown is literally transformed when there is activity at Staples.

In that same interview you also said, "The lack of an adjacent hotel continues to be a problem for the Convention Center " It seems as though someone heard your cries for a strategy to revitalize the area. Can you describe for our readers what Staples Phase 2 proposes, and how will the Convention Center be linked to that project?

Phase 2 is a mix of retail, dinning, entertainment, a theater and a headquarters hotel. The arena serves as an anchor for these additional elements in order to create a destination.

Right now the Convention Center is the biggest on the West Coast-750,000 square feet of exhibit space. It could accommodate two big conventions-but we only have housing for one. Without a hotel we're stunting our growth and reducing the possibility of getting a return on the community's $500 million investment.

That retail, dining and entertainment will be the context in which the hotel can live and ultimately thrive. Even if the Convention Center were running at 100% occupancy, a hotel standing in the middle of a parking lot would only get about 38-40% of its occupancy accounted for by it-that's the way it is around the country. Headquarters hotels next to convention centers, have to be "fun" or "pretty" to attract conventions. Phase 2 creates that around a hotel.

Share with our readers who the critical players in these discussions are-including the developer, city officials and others that need to be at the table?

Phil Anschutz is the principal force behind the master plan. From the City side, there will be the ad hoc committee-including the entire City Council.

But, the massive unknown is the hotel company. Watching the master plan unfold, the hotel company will probably be more than a management company- simply putting its name on someone else's building isn't going to work-it may end up being the builder, or even a co-owner.

Where are we with Phase 2-practically, politically and financially?

It's the political answer that will define all the other elements. The plan has to be approved by the City Council. The ad hoc committee has already met, but it could take anywahere from 6 months to a year to fully examine the plan.

These bodies will have to decide if the scale of the project-which has grown from 23 acres to 40 acres-is right for Downtown and whether or not that hotel will receive financial assistance. And of course there is always how the project will influence labor and special interests.

There are those in the City who are eager to avoid making a billionaire richer. But the hotel isn't going to get built by the City, if a billionaire or a national hotel chain for that matter wants to build that hotel they'll need to have a certain return on his investment. The question is not whether a billionaire or a national corporation becomes richer, but how the City will benefit from the deal.

Let's tie those threads together. Obviously, the public subsidy question is going to be a critical one, as you mentioned. What do you think that subsidy might amount to and what is at risk for the City and Convention Center if the City fails to complete Phase 2?

There is universal belief that the hotel has to be there. If a headquarters hotel does not get built, the investment that has been made in the arena is truly at risk.

We've made a list of 70 conventions that have said no to L.A. specifically because of the lack of hotel space adjacent to the Convention Center. They love the Convention Center but without that headquarters hotel their delegates are cast across a vast geographic region that requires enormous logistical, not to mention financial, costs. It's a hassle, and that hassle is not there when it comes to other cities. In Anaheim, there are 10,000 hotel rooms within a half-mile radius of their newly expanded convention center-In L.A. there are 695 rooms.

What else must a destination city offer to make it attractive for visitor and covention clients to choose a venue? What else must Downtown L.A., offer to assist your efforts to maximize the potential of the Convention Center and Staples?

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The arena master plan will anchor additional smaller hotel properties and development that will enhance Downtown's quality-of-life. In addition, Disney Hall will become-not just an architectural statement-but an anchor for an enormous amount of original creation in the L.A. music world. The Cathedral will anchor brick and mortar retail.

And then in Hollywood, TrizecHahn is beginning to wrestle with another terrible problem. We have 23 million visitors each year with high expectations for Hollywood-there is a very disappointing gap between their expectations and reality. TrizecHahn is closing that gap.

The reason I mention Hollywood is that there is now transportation linking Downtown-visitors won't have to rent a car. Downtown is now a 16 minute subway ride from L.A.'s defining characteristic. In a world where there are lots of palm trees and beaches-we are the only market that has Hollywood.

I was not being flip when I said that to succeed a destination has to be fun and pretty. For example, take any city that you love, and examine what makes that city loveable. Now extract visitors from that city. I would submit that most of those lovable qualities won't exist-they're either initiated or sustained by strangers visitors.

One of the keys to the revitalization effort that Phase 2 and the master plan entail is a transportation system, as you mentioned, that moves passengers around this basin to the points of interest. With the Red Line opening in North Hollwood, anyone in L.A. will be able to travel from the Valley to Hollywood or L.A., and from Long Beach to Downtown in under a half hour. But even with the opening of rail to more of the region, have we all the elements we need to have the mobility our convention guests require?

Convention delegates are a tightly managed group. Meeting planners are not eager to talk about mass transit. They want to have their delegates in a contained transportation system. What we're talking about in transportation is the tourism segment of our business. It creates the prospect of being able to come to a convention in L.A. and spend days before or after in an accessible market.

Easy access mass transit will move wallets all over town that are currently either stuck in buses, or immobilized in one part of town simply because of the daunting prospect of trying to decipher what L.A. is all about.

However, transportation in this town is too big and complex to ever be gridded by full-service mass-transit. Private cars and taxies will end up being the feeder system-they will either feed a mass-transit investment, or replace it.

TPR can't sit down with the Executive Vice President of the L.A. Conventions and Visitors Bureau without asking about the upcoming Democratic election. What's the promise? How will it be practically managed?

The same pieces of other conventions will find themselves emerging in L.A. Delegates will do business inside some facility, that business will be a television program and that program will be either interesting or not. Then there are the 15,000 media personnel. The media will be coming to town-needing to justify a rather substantial expense-for a program that isn't likely to produce any news. So, the media will find news or create it.

But those aspects are not what make a convention exciting. It isn't the delegates or the economic impacts that define the success of a convention. It's the media exposure, the opportunity to show off-you can reposition the way that some parts of the world see you. That's what defines success.

What's the Bureau's role-what responsibilities do you have for the Convention?

The Bureau is preoccupied with transportation. We have been given the opportunity to manage the transportation-and pay for it. That slice of the entire experience is our sole preoccupation. The host committee has the opportunity to expose L.A. to the media. The process by which they do that is still taking shape. The main service that we can provide media is to move them into parts of the city that allow them to have a caption photo experience and give them a ton of information about the community they're visiting.

Let's close with this, Michael. The owners of the L.A. Times are now based in Chicago. Chicago has always had a very close and productive relationship with its Conventions and Visitors Bureau. Unlike Chicago, Los Angeles' media and civic leadership have not always appreciated the value of your role. With the Tribune now the owner of the Times Mirror Square, do you expect more support and better coverage of your efforts?

The fact that L.A. Times' new ownership brings an established track record of doing business nationally and internationally is very exciting. They're aware of what kind of power can be assembled when the media, the corporate community and the government have common views. We have a new publication that will define how we see ourselves and how the world sees us. It will be fun to see how they do business. We're certainly ready to do business with them.

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