Out of Control Policy Blog

Millions for BillionairesóL.A. Edition

Here's Joel Kotkin:

    AIDED BY MAYOR Antonio Villaraigosa, downtown Los Angeles' boosters are poised to dip again into the pockets of taxpayers to help finance a splashy new project. The cost this time is up to $300 million in loans, tax breaks and fee waivers for a $750-million, 54-story complex – including a 876-room Marriott Marquis, a posh 124-room Ritz-Carlton and 216 luxury condos – across from the Convention Center.

    ...

    The Convention Center has been a consistent money loser for years, costing the city $30 million annually in debt service. Even Villaraigosa calls it a "white elephant."

    And this pachyderm has been to the public trough before. In 1988, the city financed a $500-million expansion of the center based on promises that a bigger and more modern facility would catapult L.A. into that elite circle of cities that thrive on the convention business.

Kotkin references a Brookings study, which dismantles the economic case for publicly financed convention centers.

    So if the hotel subsidy doesn't make economic sense, who benefits from the largesse? The biggest winner from the new public investment stands to be billionaire Phil Anschutz, whose $2.5-billion, 27-acre L.A. Live project – billed as "Times Square West" – is slated to be built adjacent to Staples Center. The refracted prestige of a new Ritz Carlton and luxury condos in the neighborhood would add luster to Anschutz's project, the proposed home of the West Coast headquarters of ESPN and a Grammy Award museum.

Whole thing here.

Related: Millions for Billionaires–Minneapolis Edition

Related: Hand-outs for Billionaires

Ted Balaker is Producer


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