Valley VOTE Press Release
Valley Voters Organized Toward Empowerment
14622 Ventura Blvd. #424, Sherman Oaks, CA. 91403
September 12, 2005 Contact: Joe Vitti -President 2005
Email: javittisr@cs.com (818) 366-1668

The Valley VOTE Board of Directors has voted overwhelmingly to support the following motion:

Valley Voters Organized Toward Empowerment oppose the use of any City of Los Angeles taxpayer funds, including waiver of room tax or any other tax or fee, for the purpose of financing a hotel near the convention center, or elsewhere in the city.

Discussion
A proposed financing package for a 56-story hotel adjacent to the Los Angeles Convention Center includes waiving the city's room tax at the hotel for 25 years, at an estimated value of $62 million. It also includes a $16 million loan from the Community Redevelopment Agency and reimbursement of $4 million in fees once the hotel is completed. The city would supposedly get $500,000 annually by leasing its underused Convention center parking for the development while also reserving use of it during major events.

The Community Redevelopment Agency record has been dubious, the Hollywood and Highland project being one of its more recent failures. That project's garage is costing the taxpayers thousands of dollars monthly. North Hollywood became a project area back in 1979, and languished until the subway terminal at Lankershim and Chandler Boulevards gave motivation to investors. After the Northridge earthquake, the Valley Plaza/Laurel Plaza business area became a project area. While that project area had no progress until just recently, Sherman Oaks has prospered well by rejecting becoming a CRA project area. If at all, many CRA declared project areas take many years for valuations to surpass the values at the time the areas were declared project areas. Meanwhile, those areas languish.

Financial statement notes in the City of Los Angeles "Notes to General Purpose Financial Statements" for the year ended June 30, 2001 make an important point. The notes say that "Due to declines in assessed valuations that occurred in prior years, Bunker Hill's tax increment revenues were not enough to pay the required debt service". They further indicated that the CRA issued $80 million of bonds "to cover current and future shortfalls...  The same financial statements also indicate that, excluding proceeds from the issuance of even more debt, CRA expenditures for that year exceeded total revenue by $34,416,000. The same financial statements also identify a $474 million asset item as "Amount to be provided for Long-term Debt." That's no asset!!

Across the country convention center activity has declined, as it has in Los Angeles. Other downtown L. A. hotels, which have a high vacancy factor, oppose the project.

If it is a viable project, the investors should be able to fund it without any taxpayer funded subsidies or loans.



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