Expansion of Convention Center OKd

Easing the city’s financial load by $40 million, the Los Angeles City Council on Tuesday approved a redrawn $310-million expansion that would more than double permanent exhibition space in the city’s Convention Center.

The expansion, which will add 375,000 square feet of space to the existing 235,000 square feet, will be built on a quadrant of land bordered by Pico Boulevard on the north, Venice Boulevard on the south, Figueroa Street on the east and the Harbor Freeway on the west.

The exhibition halls and meeting rooms will be connected to the original structure--situated north of Pico Boulevard--by a pedestrian bridge over the street, according to preliminary plans.

In a separate but related action, the council approved a hike in the city’s hotel bed tax from 10% to 11% to help pay for the project.

Although the issue generated heated debate when it was considered in council committees, there was no spoken criticism of the plan on Tuesday. Councilman Joel Wachs was the only member to vote against the expansion, saying after the council meeting that the financial burden posed by the project threatened the city’s general fund. But he did not speak against the expansion during the council session.

The council was under intense pressure to approve the sale of bonds for the expansion project before federal tax bills now under consideration in Washington stripped the bonds of their tax-free status. Without that status, which drops the interest rate on the bonds, prospects for financing the expansion appeared doomed, city officials said.

Before the 13-1 vote, other council members praised a restructuring of the expansion’s financial package by the council’s Finance and Revenue committee.

Originally, Chief Administrative Officer Keith A. Comrie and a blue ribbon panel appointed by Mayor Tom Bradley asked the city to float a $350-million bond to finance the project.

The committee and Comrie also called for a boost in the city’s hotel bed tax to 11.5%, which led hoteliers to sharply criticize the plan.

Claiming they were having trouble competing with hotels in nearby cities with far lower rates, hotel operators asked council members to cancel the expansion rather than push the rate beyond 11%.

But in a compromise worked out by Councilman Zev Yaroslavsky, chairman of the committee, the Community Redevelopment Agency agreed to pay for almost $40 million of the budgeted expansion costs. CRA funds are acquired largely from taxes paid to it by downtown developers, and no CRA revenue is derived from the city’s general fund.

The CRA also pledged to cover any cost overruns that occur during relocation of residents and businesses from the construction area.

That agreement allowed the council to limit the hotel bed tax increase to 11%, thereby winning the hotel operators’ support of the expansion.