$27 Million to Cover Convention Center Overrun Approved : City Hall: Officials say the extra money is needed to pay for inflationary costs related to expansion of site.

Without debate, the City Council on Wednesday unanimously approved an additional $27.3 million to cover higher, mainly inflationary, costs to expand the Los Angeles Convention Center.

The project, estimated at about $315 million before the new costs arose, is designed to make the 29-year-old downtown facility one of the largest and most attractive convention centers in the nation.

Most of the cost overrun--$20 million--represented inflation-fueled construction costs, according to City Administrative Officer Kieth Comrie.

The balance--$7.3 million--was generated by what Comrie described in a January report to Mayor Tom Bradley as “unanticipated costs.”

The center, which first opened in 1971, was originally financed by a $38-million bond issue.

The mammoth expansion project of the city-owned-and-operated facility, begun in 1985, has involved the relocation of more than 400 families and the demolition of a neighborhood of run-down apartments and commercial buildings.

Comrie said that among the items adding to higher costs were the removal of asbestos from the existing structure, installing new fire-safety systems, creating and installing terrazzo and brass designs for two new lobby floors, and costs associated with keeping the center open during the construction period.

Comrie’s senior administrative analyst, Ellen F. Sandt, said no new funds would have to be raised by the city to underwrite the higher price tag because tax-exempt bonds sold to finance the project between 1985 and 1989 have been accruing interest.

“The money is there,” she said. “The interest on the bonds is pretty much equivalent to the annual 4% inflation rate in the construction trades.”

Expansion of the 35-acre center by another 28 acres--and, most importantly, expansion of exhibit hall space to 600,000 square feet from 335,000 square feet--is seen by city officials as crucial in attracting conventions.

The center site is bounded by Pico Boulevard, Figueroa Street, Venice Boulevard and the Santa Monica and Harbor freeways.

Even with the expansion, Sandt added, Los Angeles would probably move up to only about 10th place among the nation’s largest convention centers from its current 16th-place position.

City officials and private businessmen, including hotel owners, have complained in recent years that substantial convention business has been lost to other cities such as Las Vegas, Chicago and New York, which have larger and more modern facilities.

Cities heatedly compete for convention business because the $12-billion-a-year industry translates into big cash transfusions for local economies.

The project’s initial price tag five years ago for upgrading was about $225 million. By 1987, however, other convention centers throughout the nation had been surveyed, Sandt said, and in December of that year it was decided that another $90 million was needed to make the facility competitive.

The expansion designers are Gruen Associates/I.M. Pei & Partners of Los Angeles. April 25 is the deadline for construction bids.

Already, Sandt said, several organizations, anticipating the expansion, have made plans to meet here after the complex is completed. For example, she said, the 7,500-member American Academy of Dermatology has booked the expanded center for 1995.

That’s an important group, she said, because, doctors “tend to spend a lot of money and we want their tourist dollars.”