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L.A City Council drops plans to consider subsidy for Koreatown hotel project

The site on 6th Street in Koreatown where a developer is looking to build a 192-room hotel.
The Los Angeles City Council voted Tuesday to rescind a plan for exploring financial aid for a 192-room hotel planned in Koreatown.
(Dania Maxwell / Los Angeles Times)

The Los Angeles City Council dropped a plan Tuesday for exploring taxpayer aid for a hotel developer whose company was sued by the city over unpaid taxes a decade ago.

In a 12-0 vote, council members rescinded their plan to have a consulting firm determine whether developer Leo Y. Lee’s proposed 192-room hotel in Koreatown warranted financial help from the city.

Council members voted in February to hire the consultant, saying Lee’s project could provide more hotel rooms for the city’s Convention Center. After The Times inquired about a previous legal dispute between the city and one of Lee’s companies, City Atty. Mike Feuer announced his opposition to the subsidy plan.

Councilmen Herb Wesson and Curren Price, who first proposed the idea of financial help last year, quickly backtracked and recommended that their colleagues rescind the consulting arrangement.

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Los Angeles sued Lee’s company in 2010 over unpaid taxes on a hotel he owned on Wilshire Boulevard, securing a $3.5 million judgment. At one point, the city sent sheriff’s deputies to the property to collect a portion of the funds.

Lee’s hotel companies filed for bankruptcy and the hotel was sold. He and the city settled for $2.65 million in 2012.

Regarding the Koreatown project, Lee’s lawyer had warned that if the council failed to provide financial assistance, the hotel would not get built. He also said Lee had a valid disagreement with the city about the amount of taxes it was seeking to collect from the Wilshire Boulevard property and ultimately paid his financial obligations.

“He lost millions of dollars personally by funding hotel operations from his personal assets,” said attorney Victor Sahn. “Since that time, Mr. Lee has stayed in the real estate business and has returned to prosperity. He should be congratulated for what he has done.”

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Since June 2016, Lee, his wife, his company and his business associates donated at least $67,400 to council members and their political committees, including $15,000 for Wesson’s current campaign for county supervisor. In 2017, Lee donated $25,000 to a committee that backed Price, who heads the City Council committee that reviews hotel subsidy requests.

Wesson was not present for Tuesday’s vote and none of his colleagues discussed the subsidy issue.

Activist Jed Parriott, who opposed the idea of a subsidy and has called for L.A. hotels to house homeless Angelenos, said the council should have researched the developer’s history from the beginning.

“They’re not doing their due diligence,” said Parriott, an organizer with the Services Not Sweeps Coalition. “They don’t care about the details. They just throw money around.”


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