L.A. Live Phase 2

After years in development, AEG’s L.A. Live entertainment district officially kicked off Phase 2 Dec. 3 with the opening of the Grammy Museum followed the next day by a holiday tree lighting with Britney Spears.

The grand opening celebration also included the debut of the Conga Room, ESPN Zone, and a free concert with Keb ‘Mo in the Nokia Plaza – the first of a series of free performances to run through Dec. 19.

The project is opening in phases – the Nokia Theatre L.A. Live debuted 13 months ago, Club Nokia and Lucky Strike Lanes opened in November and a hotel-condo tower isn’t expected to be completed for another year. But expectations are high, especially since other non-AEG downtown projects have been put on the back burner thanks to an imploding economy.

The recession doesn’t seem to be putting much of a damper on AEG’s vision for the 27-acre district in the South Park neighborhood near the downtown core, however.

In addition to the Ritz-Carlton and Marriott hotels already under construction, AEG Real Estate VP Ted Tanner told the Curbed L.A. blog Dec. 10 the company was going forward with plans for a third hotel on land presently being used as a Staples Center parking lot.

Tanner didn’t tell the blog what hotel brand would be on the third building but described it as a “high-end brand” and “major player.”

But for now, all eyes are on the rollout of Phase 2.

The Conga Room officially reopened Dec. 10, having moved to L.A. Live from its previous location on Wilshire Boulevard. Owned by a group including Jimmy Smits, Jennifer Lopez, Shiela E. and Paul Rodriguez, the 15,000-square-foot club can pack in 1,000 and features Latin and world music under the guidance of musical director Oscar Hernandez, leader of the Spanish Harlem Orchestra, according to the Los Angeles Times.

In addition to live music, the Conga Room offers a tapas restaurant, state-of-the-art broadcasting and recording studios and a special-events business likely to draw from its high-profile neighbors using the Staples Center such as the L.A. Lakers and Clippers.

But despite the flurry of festivities surrounding the Phase 2 rollout, there’s still an economic storm cloud threatening to rain on AEG’s parade, according to the Times.

With the U.S. in recession and unemployment figures spiking, it remains to be seen if tenants, neighbors and tourists will flock to L.A. Live in the numbers needed to sustain such a massive development – particularly one with such high-end establishments.

AEG clearly intends to corner the market on L.A.’s convention business, which has historically been only marginal in the first place, let alone in a down economy, according to the Times. L.A. Live and its hotels are directly adjacent to the city’s Convention Center.

The development will also include office space that will need to be filled and, to date, 224 condominiums to be sold or leased.

Meanwhile, consumer spending in the form of retail and food service dropped 3 percent from the previous year, UCLA economist Jerry Nickelsberg told the Downtown News. And Convention Center officials also report tourism has tailed off in recent weeks.

Even though AEG broke ground on L.A. Live during boom times that have largely fizzled, it still has reason to be confident the development can live up to those lofty projections of 2005.

The district is expected to host 600 events and draw 20 million visitors a year, according to the Downtown News, and in-state tourism is projected to pick up where international and domestic travel dips. And with improved facilities, it’s hoped the clubs, restaurants and shops will benefit from improved convention business with all those shiny new facilities.

Already, tourism officials report booking 53 conventions and 650,000 rooms for the next few years, an 800 percent increase in room stays since 2005.

“The big issue we used to have was there used to be nothing to do downtown,” convention sales VP told the Downtown News. “These conventions could not happen without the partnership with L.A. Live.”