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Developer of hotel near L.A. Live in talks to get tax subsidy

January 17, 2012 | 10:53 am

An aerial view of the Staples Center and Ritz-Carlton Hotel in the L.A. LIVE campus in downtown Los Angeles from the Goodyear Blimp in 2010. Credit: John W. Adkisson / Los Angeles Times

Looking to boost business at its convention center, a Los Angeles City Council panel set the stage Tuesday for providing another tax subsidy to a downtown hotel developer.

The council’s Trade, Commerce and Tourism Committee voted 2 to 0 to begin the work of determining how much financial assistance the city will provide to Williams/Dame & Associates, which has proposed a Marriott hotel complex across the street from the L.A. Live entertainment complex.

John Wickham, an analyst with the chief legislative analyst’s office, advised the panel that the city needs as many as 5,800 more hotel rooms near the downtown convention center to make that facility competitive on a national level. “We looked at the city’s history on other hotel projects and it appears that there is a need for economic assistance on this project,” he said.

Councilmen Tom LaBonge and Eric Garcetti both voted in favor of the proposal, which calls for the hiring of a consultant to determine the size of the proposed subsidy for the Olympic Boulevard hotel project.  According to language in the proposed negotiating agreement, the city could offer Williams/Dame the opportunity to keep as much as 50% of the tax revenue generated by its 392-room hotel project.

The proposal drew negative reviews from Peter Zen, owner of the downtown Westin Bonaventure, who said the number of subsidies being offered by City Hall has gotten “ridiculous.” Zen said in an email that downtown is already vibrant and doesn’t need the city’s help to attract new development.

“I thought we are short on tax income for Los Angeles but we keep giving it away,” he said in an email.

The proposal, which heads to the full council,  comes 10 months after the council agreed to provide up to $249 million in tax revenue for the reconstruction of the Wilshire Grand Hotel. That project is five blocks north of L.A. Live, which has a hotel tower that is eligible to receive up to $270 million in tax revenue.

The city has also offered up to $120 million for a hotel planned as part of a new development on Grand Avenue, which has been stalled for years.

The Williams/Dame project would be built on Olympic Boulevard and include two hotels, according to the report submitted to the committee. The developer plans to begin construction in April or May, Wickham said.

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-- David Zahniser at Los Angeles City Hall

Photo: An aerial view of the Staples Center and Ritz-Carlton Hotel in the L.A. LIVE campus in downtown Los Angeles from the Goodyear Blimp in 2010. Credit: John W. Adkisson / Los Angeles Times

The proposal drew negative reviews from Peter Zen, owner of the downtown Westin Bonaventure, who said the number of subsidies being offered by City Hall has gotten “ridiculous.” Zen said in an e-mail that downtown is already vibrant – and doesn’t need the city’s help to attract new development.

“I thought we are short on tax income for Los Angeles but we keep giving it away,” he said in an e-mail.

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