It was a case of hopeless infatuation in 2001, when the City of Los Angeles finally landed a developer who was rich and optimistically cock-eyed enough to build that long-dreamed-of-but-never-consummated project, the convention center hotel. I can imagine the late Peter Arno, a 1940s-era cartoonist for The New Yorker, depicting the city as a doting old millionaire and the developer as a street-smart showgirl.
“I’ll give you anything you want, if you just grant me this one happiness!” says the infatuated old geezer.
“Well, sweetums,” says the young thing, who is nobody’s fool, “if it weren’t asking too much….”
Now, Los Angeles is getting the hotel, and a whole lot more. The developer calls the 28-acre project LA Live. Snuggling up to a planned 56-story hostelry will be the 7,000-seat Nokia Theater, fronted by the acre-sized Nokia Plaza. The plaza will be the public centerpiece, illuminated with 90-foot light towers and programmed with live performances and a giant video projection screen, which will be either 45 feet or 90 feet tall. Surrounding the plaza will be white-tablecloth restaurants, retail, a 15-screen multiplex cinema and the Conga Club, a Latin-themed night spot co-owned by actor Jimmy Smits.
The developers call LA Live a “content campus.” I call it a revenue-capture machine designed to lure droves of conventioneers, and concert-goers and sports fans attending events at nearby Staples Center arena. There is very little else going on in this southern corner of downtown L.A. at night, and if the developers of LA Live have their way, there won’t be much happening anywhere else downtown, either.
As conceived by AEG, the development outfit led by Denver billionaire Philip Anschutz, LA Live might be described as a self-contained sports, entertainment and restaurant district intended to enliven the area that will lie in the shadow of the new hotel. The $4.2-billion project is touted by its developers as the largest single development project in the history of the city. The same developer completed the Staples Center arena seven years ago, and has been buying up land in the immediate area ever since.
Part of that budget is at least $250 million in city subsidies to build the hotel. That amount does not include about $70 million in bond proceeds the city made available to the developer to buy the hotel site five years ago.
In the belief that convention centers are big moneymakers for cities, Los Angeles spent nearly $500 million during the 1990s to expand the existing convention center, which has done only fair-to-good business since. The lack of a large hotel within the immediate vicinity was a stumbling block to signing the really big conventions and trade shows, according to the local tourism and convention board. Dutifully, the city has courted a series of developers off and on during the past two decades, only to see those budding romances wither when the subject of subsidies arose.
By far the biggest part of the subsidy package, beyond a few million dollars in fee waivers, is a rebate of the city’s 14% transient occupancy tax over a 25-year period starting in 2008, when hotel occupancy is expected to stabilize. In absolute dollars, that amount comes out to a breathtaking $246 million, although real estate people generally use a discount rate of 10% to translate the value of those future dollars into present-day value, which is more like $64 million.
The city authorized the subsidies in 2005 despite a recent report from the Brookings Institution that described such subsidies as a bad investment.
“With the possible exception of a handful of major cities that have long dominated the national and regional economies and a very small number of prime visitor destinations like Orlando and Las Vegas, the grand promises of convention center investment are unlikely to be realize, the strategy doomed to failure,” the report stated.
To refute the report, the city hired PKF Consulting, which said in a September 2005 letter that Los Angeles “meets both criteria” indicated by the Brookings report insofar that Los Angeles is a “major city that has long dominated the national and regional economies, as well as a prime visitor destination.” By this rhetorical sleight of hand, PKF made the Brookings report sound like a tacit endorsement for a subsidized convention-center hotel.
Criticism of the concept aside, there are some good design ideas at LA Live. Starting with the monolithic superblock assembled by the developer, the architectural firm of RTKL invades the site with several mid-block openings, breaking the superblock into six big pieces separated by shopping streets and/or vehicular circulation. Breaking down the unworkable scale of the grid is an idea worth exploring elsewhere in downtown Los Angeles, which is a dreary place to walk partly because blocks are so long.
Good design ideas, however, cannot salvage a bad concept. The whole notion of an entertainment center seems like bad urbanism. It seems especially unfortunate to introduce one more hulking megastructure into the South Park neighborhood, next to existing megastructures like the sports arena and the convention center. This is inflexible, over-scaled urbanism in what planners have long designated a residential area.
Especially disappointing in a downtown area is a promising public space like Nokia Plaza, which the developer wants to drown in media glitz and marketing. That kind of stuff is exciting in a trade show or on the Vegas Strip. It is out-of-place in a densely populated residential district.
LA Live is almost guaranteed to add value to the arena and the convention center, but it may not serve downtown as a whole. Many tourists and suburban concertgoers may never see anything more of downtown than the inside of this noisy, hyper-commercial environment, which would be very similar to many other noisy, garish places across the country. To let this project go forward is one of the prices we pay for a free-market system. To subsidize it with public money seems self-defeating. LA Live will probably be a great asset for Phil Anschutz, but it is no gift to the city.