Panel OKs Subsidies for Hotel Project

A plan for the city of Los Angeles to help finance construction of a hotel and luxury condos next to the Convention Center was backed Wednesday by a key City Council panel.

But the ad hoc committee on the Convention Center headquarters hotel urged representatives to try to negotiate a reduction in proposed city subsidies and loans of up to $172 million.

Despite opposition to the subsidy plan from a competing hotel and two unions representing city workers, the panel recommended that a memorandum of understanding be approved by the full council as a step toward signing a final contract.

“If done right, it does have the potential to benefit the city long-term financially and be an anchor for activity downtown,” said Council President Alex Padilla, chairman of the committee.

Council members Jan Perry and Bernard Parks concurred but urged seeking a better deal.

Wolff Urban Development has proposed a 55-story Hilton hotel and seeks city financing that would include giving the hotel all of the room taxes generated in the first 20 years, which officials estimated Wednesday could range from $110 million to $135 million.

The project would include 100 luxury condominiums above the 1,200-room hotel.

The agreement endorsed by the committee Wednesday would provide the hotel developer with up to $22 million in loans, and calls for $10 million in public improvements and up to $5 million in waivers of planning and building inspection fees.

Council members urged city negotiators to seek a reduction in fee waivers after representatives of unions for building inspectors and engineers complained that it could hurt their pay and increase their workload.

Peter Zen, an owner of the Westin Bonaventure, objected to the city’s using taxpayer money to subsidize a competitor.

But Bill Fujioka, the city administrative officer, countered that the city has provided millions of dollars in subsidies to other hotels in the downtown area, including the Bonaventure.

Padilla asked that any final contract include some provision to cap the transfer of hotel bed taxes to the developer.