Subsidy Approved for L.A. Convention Hotel

Staff -- Tradeshow Week, 2/28/2005

With the Los Angeles City Council's unanimous approval of a subsidy of up to $177 million, a 1,200-room headquarters hotel adjacent to the convention center is one step closer to reality.

Anschutz Entertainment Group plans to break ground this spring on the hotel, which is part of L.A. Live, a $1 billion development that will also include a 7,000-seat concert theater, a 4,000-seat multiplex theater and numerous restaurants and bars. Hilton has been selected as the operator of the 55-story hotel, said AEG spokesman Michael Roth.

The memorandum of understanding between AEG and the city calls for the hotel to receive from $110 million to $140 million in hotel bed tax revenue during its first 20 years of operation. Developers are also slated to receive $22 million in loans and $10 million in public improvements. As well, $5 million worth of building fees would be waived.

Roth said the approval was a major step. "It was excellent news. The deal is practically in place," he said.

LA Inc., the city's convention and visitors bureau, has long argued that Los Angeles' competitive position as a convention site is hurt by the lack of nearby downtown hotel rooms. At the same time, elected officials have criticized the bureau for not being able to attract enough events. In 2004, LA Inc. booked 15 major conventions, down from 35 in 2002. And only a dozen major events have been confirmed for 2005.