Mayor Brokers Hotel Deal
Mayor Antonio Villaraigosa announced Monday that he has settled a dispute with the owners of the Bonaventure Hotel that threatened to derail plans for a newer hotel next to the unprofitable Los Angeles Convention Center.
The owners of the Bonaventure -- a 1,354-room high-rise in the middle of downtown -- had planned to fight the city’s proposal to subsidize a competing hotel on downtown’s south side.
The Los Angeles City Council has agreed to provide the new hotel with up to $290 million in subsidies and loans to help breathe new life into the city-owned convention center, which receives a $20-million subsidy each year because it does not attract enough business.
The planned hotel, a Hilton, is envisioned as a key anchor to L.A. Live, a $1.7-billion “sports-entertainment” development that officials have likened to New York’s Times Square.
Tourism officials say the main problem facing the convention center is the dearth of nearby restaurants and hotel rooms. But the city handouts seemed unfair to the owners of the Bonaventure, which is currently billed as “L.A.'s largest convention hotel.” They challenged the deal in a lawsuit filed in April and were threatening to launch a petition drive for a ballot referendum to let voters decide the issue.
Villaraigosa intervened last week, sitting down with all of the interested parties and helping them reach a compromise.
Under the terms of the agreement, the owners of the Bonaventure, who were worried about losing hotel customers, will have the option of converting up to 400 of their hotel rooms into residential condominiums. In exchange, the owners agreed to drop the lawsuit and proposed referendum.
Organized labor got a guarantee that no jobs at the Bonaventure would be lost until three years after a condo conversion.
Villaraigosa, a former union negotiator, was able to bask in the success of another intervention on behalf of L.A.'s tourism industry. As mayor-elect in June, he brokered a contract deal that averted a union lockout at seven major Los Angeles hotels.
The mayor assembled all of the players in the latest negotiation for a triumphant news conference Monday in City Hall.
He said that a thriving convention center was “absolutely necessary” to any plans for revitalizing downtown L.A.
With the deal, he said, the city will eventually see 25,000 new jobs. “The convention center hotel and L.A. Live will not only be an entertainment destination and an icon in Los Angeles, it’ll be a boon to the local economy,” he said.
Tim Leiweke, president of L.A. Live developers Anschutz Entertainment Group, said the hotel developers, Lew Wolf and Richard Ackerman, have not yet found all of the funding they need. “But I’ll tell you, we cleared all of the minefields now,” he said. “We’re unencumbered.”
The condo conversion at the Bonaventure requires the approval of the city’s redevelopment agency, which originally provided land for the Bonaventure at a discount. The mayor appoints the agency’s board of directors.
Bonaventure executive Peter Zen said the new deal felt like a victory, “but not quite.”
He said that he hoped his hotel would end up attracting some of the millions of visitors that Leiweke says will show up at L.A. Live.