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[ LA WATCHDOG ](https://ded2209.inmotionhosting.com/~citywa9/la-watchdog)
# Hotel Developers Want to Pick Our Pockets
August 18 2025
Written by Jack Humphreville.
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LA WATCHDOG - Our City has declared a financial emergency. It has a Structural Deficit of $500 million (and possibly much more) over the next four years and at least $10 billion of deferred maintenance on our streets, sidewalks, parks, and the rest of our deteriorating infrastructure. This should be reason enough for the City Council to turn down any request by two well healed real estate developers for an estimated $120 million in subsidies to finance the operations of their hotels.
In 2007, the City began entering into Development Incentive Agreements to encourage construction of hotels within walking distance of the Convention Center. And since that time, the City has met its goal of having 8,000 rooms within a mile of the Convention Center. Of course, this assumed the renovation of the Convention Center which is still in the planning stage and will not be ready for the Olympics.
The Venice Hope Hotel, to be located at 1600 South Flower in DTLA, is looking for a $60 million subsidy, paid out over a ten-year period from the proceeds from the 14% hotel tax. This 300-room hotel is part of $300 million development which includes a $171 million, 23 story, 250-unit residential tower. This project was recently approved by the Planning Commission.
The second development is located at 670 Mesquit Street in the Arts District, three miles from the Convention Center, and was recently approved by the City Council. This $1 billion, 1.8 million square foot development will contain a 271-room hotel along with 895 apartments, 675,000 square feet of offices, and space for retail stores, restaurants, galleries, a gym, and a charter school. The requested subsidy is expected to be in the range of $60 million, to be paid out of the proceeds from the 14% hotel tax over a ten-year period.
These subsidies are not in the best interest of the City and Angelenos. Our City has other priorities, including balancing the budget, enhancing public safety, repairing of our crumbling infrastructure, strengthening the depleted Reserve Fund, and funding affordable and homeless housing.
If the City Council is foolish enough to approve any subsidies, it should retain an equity interest in the project or develop a mechanism where it is repaid (plus interest) from the sale or refinancing of the projects, negotiated with the assistance of an experienced and nationally recognized investment bank.
Furthermore, any consideration of subsidies should involve open and transparent hearings where Angelenos have adequate time to review, analyze, and comment on any handout to these well healed developers.
Or put another way, would you prefer to give $120 million in handouts to wealthy real estate developers or forego an increase in our taxes, already the highest in the nation.
***(Jack Humphreville** writes the LA Watchdog column for CityWatch, where he covers city finances, utilities, and accountability at City Hall. He is President of the DWP Advocacy Committee, serves as the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and is a longtime Neighborhood Council Budget Advocate. With a sharp focus on fiscal responsibility and transparency, Jack brings an informed and independent voice to Los Angeles civic affairs. He can be reached at ****.)*
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