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The White Elephant That Bleeds the City Treasury Dry — LA Convention Center and Its Bloated Payroll

Editor’s Note: City Hall wants to tear down half the LA Convention Center, borrow $350 million on top of the $450 million already owed on it and then turn over its operation to AEG to profit from an entertainment complex that includes an NFL stadium, LA Live and Staples Center — all heavily subsidized by taxpayers with at least half of all tax revenue that’s generated going to the Denver-based company. In the meantime, vast amounts of public money and tax dollars that could be keeping cops on the streets and fire stations open is going to pay inflated salaries at the Convention Center — a white elephant that costs the public tens of millions of dollars a year.

By Tim Cavanaugh,

Although excessive public-employee salaries are getting close attention in California, many ostensibly private
officials – including a tourism bureau boss who makes almost
$500,000 a year – are paid mostly or entirely from public money. In
some cases, these compensation packages are higher than the pay of
public employees who have been the focus of public

LA Inc. is a non-profit that functions as Los Angeles’ convention
and visitors bureau. LA Inc. is organized as a 501(c)(6). In its tax filing (LA-Inc tax.pdf) LA Inc.
describes its main function: “Advance the prosperity of LA’s
visitor economy and the livelihoods that depend on it.” 


LA Inc.’s budget in 2009 was
$19.4 million. About $15.6 million of that money came directly from
the public: $10.4 million from a portion of the city’s 14 percent
hotel room tax and $5.2 million from Los Angeles World Airports.
Another $1.3 million came from membership fees and $2.4 million
from business activity, including advertising in LA Inc.’s visitors
guide. But by far the largest portion comes from public funds. If
you want to know what happens to all those taxes and fees that run
up your airport and hotel bills, this is one example. 

LA Inc.’s budget will soon be going up thanks to a recently
approved additional 1.5 percent hotel tax. Mark Liberman, LA Inc.’s president and CEO, says the new
dedicated tax could double the organization’s budget. 

Where does all that money go? More than 40 percent of it goes to
pay staffers. Salaries, pensions, benefits and other compensation
make up $8.6 million of the organization’s spending. All of LA
Inc.’s executives make well over $100,000 a year in total


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7 Responses to The White Elephant That Bleeds the City Treasury Dry — LA Convention Center and Its Bloated Payroll

  1. Anonymous says:

    For the Mayor and City Council the motto is
    SPEND and it is our money they spend so freely.
    If there ever were a reason for a recall on the
    whole bunch, this news is it. It is called THIEVERY.
    How do we do a recall? Anybody know? I will help. Thank yoiu, Ron, for informing us.

  2. Koch Brothers ragsheet says:

    This is a pretty lame link. While that salary figure is obviously too high, this lazy column from Reason magazine can’t be bothered to look at other tourist bureaus in other major metro areas. The first question is whether LA is far out of line with those tourist bureaus and measure the money spent based on tourism spending, etc. If LA is overspending and underperforming, then there is a real problem.
    NYC spends tens of millions of dollars promoting its tourism even though most of the world’s tourists have heard of the Statue of Liberty and Broadway. The fact is tourism dollars are not static – travelers move around every season and just like with other marketing you have to get the word out and catch those eyeballs regularly to make sure LA and SoCal stay on their radar.
    A lot of the tourism here goes straight to Disneyland and other theme parks and others to the beaches, so it makes sense to invest in making sure tourists know about other aspects of LA that could make an interesting visit.
    Demanding more accountability and tighter cost controls is one thing, but suggesting that this money doesn’t have to be spent at all is stupid.

  3. Anonymous says:

    Now we know. The Mayor and the City Council feel
    that they can spend our money to make lots
    more money for friends and supporters.
    Itis time for a recall. I will help. How
    does a reccall work – anyone know?
    Thank you, Ron, for finding this information
    which is never in newspapers, on tv news or on
    the radio. Keep up your good work. We need people like you on our side.

  4. Anonymous says:

    Other than participants and beneficiaries, who in our city of about 4,000,000,000 people would want to be taxed about 25% more each period in the DWP proposals, Stadium proposals, CRA proposals – etc, etc,etc?????
    Those who are registered voters are probably more
    than a million, the rest are newcomers, children, illiterate , etc… I have rarely seen an election of that many who take the time to vote. The above named participants and beneficiaries always do but they are not the majority. Our problem is that we do not vote.
    I say,if you cannot take the time to vote, then you are just asking to be scammed. What say you???

  5. Anonymous says:

    The end of the Reason article makes a good point about taxes and spending:
    “As an extra irony, that cost is coming out of the other end of the tourism business. By not imposing massive hotel taxes and airport fees in the first place, L.A. could help its tourism business in a way that can be justified without flimflammery: If you make it less expensive to come here, people will be more likely to come here.”

  6. Anonymous says:

    LA Inc is the piggy bag of the electeds. The LA Slimes should spend some time investigating it besides Bell and Vernon.

  7. Anonymous says:

    8:04am You are comparing bums. Who cares who is the worst?

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