The Los Angeles City Council has approved tax breaks worth $103 million to the developer of a new hotel across the street from the Los Angeles Convention Center.
The Fig+Pico Convention Center Hotels still requires additional approval from the council and the Citywide Planning Commission, reports NBC4 media partner KPCC. If approved, construction would begin in late 2018 and the opening would be in 2020.
The $103 million in tax breaks are about one-fifth of the $494 million in tax revenue that would have gone to the city over the next 25 years if the incentives weren't in place.
City officials say the incentives are necessary to boost the number of hotel rooms near the convention center in order to make LA a magnet for big conventions and the money they bring in.
The completion of the Fig+Pico project would give Los Angeles about 6,500 rooms within walking distance of the convention center, up from the 1,800 rooms the city had before it began giving tax breaks to new downtown hotel projects.
The project would produce about $409 million just in hotel taxes over the next 25 years, coming mostly from people who live outside the city.
Greg LeRoy, of Good Jobs First, a nonprofit that tracks public subsidies to private companies, said that these types of deals can be a windfall for developers because the projects would likely get built without the tax breaks.
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"If you accept that most of them are windfalls, what it means is that the deals would have occurred anyway, but somebody is paying fewer taxes," LeRoy said.
