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City Council panel wants to help developer of new downtown L.A. hotel

Full council to vote on a tax subsidy strategy for a Marriott hotel complex across the street from L.A. Live.

January 18, 2012|By David Zahniser, Los Angeles Times

Looking to boost business at its convention center, a Los Angeles City Council panel set the stage Tuesday for another downtown hotel developer to receive financial help from taxpayers.

The council's three-member Trade, Commerce and Tourism Committee voted 2 to 0 to begin determining how much financial assistance the city will provide to Williams/Dame & Associates, which has proposed a Marriott hotel complex across the street from the L.A. Live entertainment complex.

The proposal, which now heads to the full council, comes 10 months after the council agreed to provide up to $249 million in tax revenue for the reconstruction of the Wilshire Grand Hotel. That project is five blocks north of L.A. Live, which has a hotel tower that is eligible to receive up to $270 million in tax revenue.

John Wickham, an analyst with the chief legislative analyst's office, advised the panel that the city needs as many as 5,800 more hotel rooms near the downtown convention center to make that facility competitive on a national level.

"We looked at the city's history on other hotel projects, and it appears that there is a need for economic assistance on this project," he said.

Councilmen Tom LaBonge and Eric Garcetti voted in favor of the proposal, which calls for the execution of a negotiating agreement between the city and Williams/Dame. According to the proposed agreement, the city could offer Williams/Dame the opportunity to keep as much as 50% of the tax revenue generated by its 392-room hotel project.

The committee's action drew negative reviews from Peter Zen, owner of the downtown Westin Bonaventure, who said the number of subsidies being offered by City Hall has gotten "ridiculous." Zen said in an email that downtown is already vibrant and doesn't need the city's help to attract new development.

"I thought we are short on tax income for Los Angeles, but we keep giving it away," he said in an email.

The city has also offered up to $120 million for a hotel planned as part of a new development on Grand Avenue, which has been stalled for years.

The Williams/Dame project plans would go up on Olympic Boulevard. The developer plans to start construction in April or May and plans to incorporate two hotels in the project, Wickham said.

david.zahniser@latimes.com

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