Mall developer Westfield in line for city financial assistance
The Los Angeles City Council is considering a major package of financial assistance for shopping mall developer Westfield just days after the company helped stage a black-tie gala attended by city leaders at Los Angeles International Airport.
Westfield wants the city to help its Village at Westfield Topanga project, a west San Fernando Valley development that would house a 158-room hotel, a Costco, new office space and an array of stores and restaurants.
The proposal, which comes up for a City Council vote on Wednesday, calls for Westfield to keep up to 42% of the net new tax revenue generated by the project, or nearly $59 million over a 25-year period, according to city officials.
Backers of the deal describe it as a “reimbursement” that would allow Westfield to speed up completion of the project and provide a new package of so-called community benefits, including a promise to hire unionized workers at its planned Hyatt House hotel.
Company spokeswoman Katy Dickey said the party at LAX — where Westfield holds concession contracts — has “nothing to do with” the financial assistance being proposed for the Village at Westfield Topanga. The city’s proposal, said Dickey, will help Westfield build the mall and hotel project over three years instead of 25.
“It’s about expediting off-site transportation, infrastructure and other capital improvements, as well as generating more jobs,” she said in a statement.
The period for the public to weigh in on the city’s tax deal with Westfield could be brief. Ed Johnson, spokesman for council President Herb Wesson, said the proposal won’t be reviewed by any of the council’s committees. Instead, it will head straight to the council five days after the financial details are released — a rapid timeline compared to many of the city’s other major financial decisions.
Jack Humphreville, a neighborhood council member who has frequently criticized the city’s practice of providing taxpayer subsidies to private companies, said the approval process should be slowed down so that the public can examine the proposal more carefully.
“Why does this company, one of the largest owners of shopping centers in the world, need a tax break from the city of Los Angeles, which can’t even fix our streets?” he asked.
Chief Legislative Analyst Gerry Miller, who advises the council on policy matters, said the project would generate an estimated $140.1 million in net new tax revenue over 25 years, create 1,287 construction jobs and nearly 1,600 other jobs. Westfield is seeking the same type of financial help that was granted to other hotel projects in downtown Los Angeles, Miller said in his memo to the council.
“Without this assistance, they contend that construction of the project is not feasible,” he wrote.
Westfield has a funding gap of $48.9 million, according to Miller’s report. The city’s financial assistance, when calculated in present-day dollars, would be valued at $25 million, or 42% of the net new taxes generated by the project over 25 years, officials said. The final mix of taxes that Westfield would get to keep still needs to be negotiated, but could include hotel taxes, property taxes or other revenue, Miller said.
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