Sep. 27--The Los Angeles Convention Center has added millions of dollars to its mounting losses through poor management, lax bookkeeping and offering discounts in violation of city rules, Controller Laura Chick said Wednesday. 

Release of three controller's audits on operations of the Convention Center -- long criticized as a white elephantdraining the city treasury -- comes at a time that City Hall is considering expanding it and hoping that approval of a $1 billion project around Staples Center will produce a badly needed major hotel in the area. 

Chick said her goal was to challenge city officials to closely monitor plans to expand the complex as well as examine the need to use public money to finance construction of the hotel. 

"We all agree that a convention hotel is needed, but we have to closely examine the impact of using public money," Chick said. 

The Convention Center, located adjacent to Staples Center, has experienced years of deficits. It has lost 26 conventions since 2000 alone because of the lack of adjacent facilities, competition from other areas and a slowing economy. 

In one audit, Chick said part of the problem with the Convention Center dates back to its expansion in the early 1990s and the lack of information provided to decision-makers on what would be required to pay it off. The city now pays $30 million a year to pay off bonds that financed a $500 million expansion and provides a subsidy to cover Convention Center operating expenses -- a cost that was supposed to be covered by revenue the expanded center generated. 

"It's something I think about almost every day and how we could use that money elsewhere," said City Councilman Nate Holden, expressing concern about the amounts the city has to pay and whether that will increase. 

"But we have it there and have to see it succeed," said Holden, who said planning for expansion, the entertainment center and hotel should proceed -- but that a final decision should be delayed. 

"When you look at us being on the brink of war and the threat to the economy, we should step back and see where we are in a year," Holden said. 

Chick criticized many financial practices of Convention Center management but acknowledged officials are moving ahead to make changes after auditors uncovered shortcomings. 

Among the changes is renegotiating contracts with Staples Center for 475 parking spots to make sure the Convention Center is fully repaid for its costs on shared parking. 

In addition, she said work is under way to examine the city's policy on offering discounts to some conventions -- a practice she said might have resulted in the agency awarding $5.8 million more than allowed under city regulations. 

Chick said discounts are allowed up to a certain amount of the hotel tax expected to be generated by a convention, and she believes some events were given too large of a financial break. 

She also questioned how well management was looking over the accounts that owe money to the agency, with some $1.4 million in unpaid bills. 

The agency should begin to seek collection once a bill is 30 days overdue and also charge interest to encourage payment, she said. 

"The Convention Center has great potential as an economic engine and has brought much to Los Angeles, but past performance has not been optimal," Chick said. 

"In each audit, we found numerous ways the Convention Center should more carefully watch all the dollars it has and improve operations." 

Among other items, Chick said she was concerned the city has been given inaccurate revenue projections and expense statements. 

However, she did note the facility was among the best in the nation in generating revenue on the basis of how much space is available. 

San Diego far outstripped other cities, generating some $80 in revenue per square foot of convention-center space in fiscal year 1999. Los Angeles was in second place at more than $35 per square foot, followed by Atlanta, New Orleans, San Francisco and Las Vegas. 

Michael Collins of the Los Angeles Visitors and Convention Bureau said part of the problem is that the city does not have an adjacent hotel -- something that is being promised with a proposed new entertainment center and expanded Convention Center proposal. 

"You have to remember that a lot of these conventions are booked three, four, five years in advance," Collins said. "We have taken a hit here because so many of the conventions booked years ago were for the high-tech industry and they've taken a beating this past year. 

"And we have more competition. Anaheim just reopened its Convention Center with an adjacent hotel and San Diego has been beating us up with their facilities." 

Collins said the problem was not with the Convention Center itself, but the lack of hotel rooms. 

"A lot of conventions want their people to be able to go right next door to a hotel and we can't do that," Collins said. "We have a 21st century convention facility with a 1987 hotel capacity." 

Chick said her concern is whether public funding should be used for the hotel. 

"One of the things the City Council has done is ask for a study to determine if it's the right way to go," Chick said. 

The audits indicated the lack of a clear policy on discounts to be offered resulted in a confusing situation on what reductions to offer in order to get conventions. 

Chick said the city needs to develop more data on best-case and worst-case scenarios for any further expansion of the facility to look at whether any additional costs will be offset with other revenues from hotel or sales taxes. 

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