Officials with the American Film Market are reportedly considering a move from the Loews Santa Monica Beach Hotel to L.A. Live come 2013. (photo by Brandon Wise)

OCEAN AVE — Business leaders here are concerned about rumors that the American Film Market, which brings hundreds of movie industry insiders and their cash to the city each fall, is exploring a move from Loews Santa Monica Beach Hotel to L.A. Live.

The Hollywood Reporter, citing unnamed sources, reported this week that AFM, one of the world’s largest film markets, could move to downtown Los Angeles after its contract with Loews expires after 2012. Loews has been the headquarters for the market since 1991.

The trade publication said AFM began looking at other locations after Loews asked for an increase in the rates it charges.

Anschutz Entertainment Group, which manages the L.A. Live complex, has stepped in with an offer at a much lower cost than the Loews bid. Loews is said to have made a counteroffer earlier this week to try and retain the event, which each fall attracts more than 8,000 people involved in the independent production and distribution of movies from over 70 countries, according to The Hollywood Reporter.

Representatives from AFM did not respond to requests for comment.

This year’s market is scheduled from Nov. 2 to Nov. 9 at Loews. It is estimated that $800 million worth of transactions will be made during the market’s run.

John Thacker, regional vice president of operations for Loews Hotels, said negotiations are ongoing to keep AFM in Santa Monica. He confirmed the hotel did ask for more money from AFM to help cover increased labor costs associated with transforming the hotel into hundreds of mini board rooms where independent filmmakers meet with producers and distributors in hopes of selling their movies. That means removing all the beds and some furniture from the 342 rooms, and, once the market is over, putting that all back while making some minor repairs.

“We are … ask[ing] for a little bit more,” said Thacker, who added that he “wouldn’t be surprised” if AFM executives were looking at other venues. Thacker would not disclose the rate Loews is asking for.

AFM, a nonprofit trade organization representing independent film companies from 22 countries, is not only a chance for filmmakers to strike it rich, it is also an opportunity for local businesses to get an influx of cash during the fall when things tend to slow down until the holiday shopping season arrives. Theaters are packed daily as are many hotels, restaurants and retail stores.

In 2007, the market was expected to generate between $15 million and $17 million in total spending.

As it has grown over the years, some events have been farmed out to other hotels and restaurants in the area. In recent years, that has included the Le Merigot Beach Hotel, which is next door to the Loews. Many of the conference events have been held at the nearby Fairmont Miramar Hotel, while several local movie theaters are booked for private screenings.

L.A. Live, which is adjacent to the Los Angeles Convention Center, has more than 5.6 million square feet of ballrooms, bars, restaurants, concert theaters, a condo tower and two large hotels in one tower.

“The Santa Monica Chamber [of Commerce] recognizes the great financial impact the market has on our businesses, especially at a time of year when business could use the support,” said Laurel Rosen, president and CEO of the chamber. “There seems to be a wonderful synergy between the American Film Market and the city of Santa Monica that I hope has the possibility of continuing for years to come.”

Kathleen Rawson, CEO of Downtown Santa Monica Inc., a public-private management company that oversees Downtown on behalf of City Hall, said AFM is a “great piece of business for Santa Monica.”

“I think the city needs to do what it can to help keep that piece of business,” Rawson said.

Not only is the money good, but so is the reliability. AFM is something businesses can count on each fall. It can be extremely difficult to secure something as large and lucrative as AFM, said Misti Kerns, president and CEO of the Santa Monica Convention and Visitors Bureau.

“It would be really hard to replace that type of business,” said Kerns, who has been working with AFM for more than 20 years and believes this is the closest it has come to leaving Santa Monica.

While there is concern, Kerns said, Loews is in a good position to ask for higher rates given that demand for hotel rooms in Santa Monica is high, driving up prices.

In July, room rates were on average $327.68 a night, up 12 percent from the same period last year. Occupancy was at a remarkable 91.32 percent, up 4.2 percent from last year, Kerns said.

Room rates in Downtown L.A. were clocked at $143 and occupancy was 81 percent, up from 10 percent the year before, Kerns said.

“It’s all about supply and demand,” Kerns said. “Twenty-one years ago when AFM came to Santa Monica, we weren’t the destination we are today. AFM was able to get what I think was a good deal then. I think Loews has gone back and offered a fair deal, but from [AFM’s] perspective it was an increase they weren’t prepared for but one that the market is providing for us and we’re getting it.”

Kerns said AFM has helped the city by the sea raise its profile internationally and believes many attendees will want to remain in Santa Monica because of its proximity to the beach and its many amenities.

The Hollywood Reporter said there is pressure from foreign participants to remain in Santa Monica because they like the Westside are mostly unfamiliar with the urban areas of L.A.

Thacker expects to find out what AFM will do later this month.

“We don’t want to lose this business,” Thacker said, “but we have to make sure it makes sense financially for us to do it.”

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