It’s also weighing the sale of city-owned land
A city committee on Tuesday endorsed a deal that would give a developer $103.3 million in public money over the course of more than two decades to open hundreds of hotel rooms next to the Los Angeles Convention Center.
Developer Lightstone Group wants to build two towers at Pico Boulevard and Figueroa Street and fill them with 1,130 rooms operated by three brands: AC Hotel, Moxy Hotel, and Hilton Garden Inn. But, due to the high costs of “concrete and steel high rise construction,” it has a $67.4-million financing gap, according to real estate advisory firm Keyser Marston Associates. The firm says the public money, adjusted for inflation, would fill that financing gap.
Los Angeles City Councilmembers are eager to get hotel rooms built near the convention center, and it appears they’re willing to loosen the city’s purse strings to make it happen.
There are about 5,162 hotel rooms within walking distance to the convention center, far short of what’s offered in San Diego and San Francisco, according to city estimates. “This is a severe impediment to business coming into the city of Los Angeles,” says John Wickham, division head in the city’s Chief Legislative Analyst’s office.
The financial assistance would come in the form of tax rebates. Under the draft deal recommended by the legislative analyst, the city would give Lightstone a cut of its tax revenue generated by the rooms over 25 years, up to that $103.3 million amount.