L.A. Official Backs $16-Million Loan to Build Hotel Next to Convention Center

The head of the Los Angeles redevelopment agency recommended Friday that the department’s board approve a $16-million loan for a new hotel next to the convention center.

The board is scheduled to vote Thursday on the recommendation of acting Chief Executive Richard Benbow that the loan be made as part of $82 million in public subsidies.

Although city officials once talked of providing as much as $177 million in taxpayer subsidies, the revamped proposal still drew opposition from Chris Sutton, an attorney for the Westin Bonaventure Hotel.

“It’s unfair competition,” he said. “In effect, if there are too many hotel rooms downtown, this allows the new hotel to poach travelers from others by offering a lower rate because of the subsidy others aren’t getting.”

He filed an amended lawsuit Monday aimed at getting the courts to weigh in on the subsidy proposal.

The proposed 1,200-room hotel and condominium building is expected to cost $400 million and be a cornerstone for a $1-billion sports and entertainment complex planned by the owners of the adjacent Staples Center.

The below-market-rate redevelopment loan would pay for public improvements to support the hotel, including streets, curbs, sidewalks and gutters.

City officials have insisted that LA Arena Land Co., the master developer, include the hotel as part of the development to help make the city-owned convention center more competitive. The firm plans to sell the land to Wolff Urban Management and Apollo Real Estate Advisors, which would build the 55-story hotel that might be operated by Hilton Hospitality Inc., Benbow said. About 110 luxury condominiums would occupy the upper floors.

In addition to the loan, the city has agreed to give the hotel $62 million in bed taxes that it would collect during the next 25 years and to waive $4 million in building fees.

The Community Redevelopment Agency board’s vote is strictly on the loan, with the rest of the subsidies requiring a final vote by the City Council.

The board that is set to consider the proposal on Thursday was appointed by former Mayor James K. Hahn.

Mayor Antonio Villaraigosa is expected to reappoint board member Madeline Janis-Aparicio and replace the others in the next week. His spokeswoman, Janelle Erickson, said that the mayor had not reviewed the proposal or taken a position on the subsidies, but that he thinks the current board should act now because the agreement would still require his approval.

The project won generally positive comments from Bruce Ackerman, president of the San Fernando Valley Economic Alliance, whom Villaraigosa plans to name to the board. “The project needs to stand on its own. I have no problem with a public investment, but the payback has to be there,” he said in a statement released by the agency.