Have you noticed how, whenever some new redevelopment project is unveiled, the folks in city hall tell us that it won’t cost the taxpayers anything — that it will only add to public and private revenues, and then all will be well. It always reminds us of the immortal words of California Court of Appeal Justice Macklin Fleming who, in one of his opinions noted that proponents of these projects tell one and all that what they are about is the baking of a bigger economic pie, so that everybody’s slices will be bigger, although often, what they produce is pie in the sky.
We were reminded of all that while perusing our copy of today’s Los Angeles Times over our morning cup of Starbuck’s finest. See David Zahniser, Marriott Developer Seeks Tax Subsidy, L.A. Times, June 12, 2012, 2012, at p. AA1. It seems that the new, new, new, rebuilt and expanded Los Angeles convention center (which has not yet begun its environmental review process, much less construction, but which, we are assured, will be a thumping success, unlike its two earier iterations that are producing a net loss to the city of $30 or $40 million annually, depending on who you are listening to) will attract so many folks that a new hotel to accommodae them is an urgent necessity.
That sounds just swell, but it turns out that there is a snake in paradise. The would-be developers of that new hotel aver that it will be such a grand success that without a hefty city subsidy it can’t be built. So they seek a deal whereby they would receive from the city “half of the sales taxes, business taxes, room taxes, utility taxes, propert taxes and parking taxes generated by their 392-room project once it opens. . .” all of which, absent this deal, would go into the city’s “general fund, which pays for police, parks, and other services.”
But the developers also say that unless the city crosses their palm with silver in the aforementioned manner, they will “reevaluate” their committment to this project and take a walk.
Which leaves your faithful if puzzled servant with a question: if that new, proposed hotel is going to be such a great success, why does it need a $67.3 million subsidy from the public?