What do the folks at Apollo Real Estate Advisers know that Los Angeles city leaders don’t? Apollo officials have gotten cold feet about sinking $60 million into the construction of a new Convention Center hotel in downtown Los Angeles, and have withdrawn from negotiations. But city leaders, on the other hand, have happily committed $270 million in public subsidies to the same project. Clearly Apollo’s officials are reluctant to gamble their own money on such a questionable venture as part of the massive l.a. live entertainment-sports-condominium complex near Staples Center and the Convention Center. City leaders, however, aren’t cautious – after all, it’s only taxpayers’ money they’re playing with. Apollo’s exit from the deal suggests that city leaders haven’t done their due diligence. They bought into a vision that seems increasingly untenable. So what was once billed as a done deal now waits in limbo. The hotel project will go through only if AEG, developers of the adjoining l.a. live complex, can find someone else willing to shoulder what was supposed to be Apollo’s $60 million investment.
Ted Balaker is an award-winning filmmaker, journalist, and founding partner of Korchula Productions, a film and new media production company devoted to making important ideas entertaining.