The LB taxpayer cost to "incentivize" the deal by "sharing" (giving up) half of the city's hotel room tax in the transaction to suit the buyer/developer for twenty years (estimate per city staff's agendizing memo) is $27 million. The Council vote to approve this was 8-0 with Councilmembers Lowenthal, Price, Supernaw, Mungo, Andrews, Uranga, Austin and Richardson voting "yes" and Gonzalez absent.

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And there may be another hotel room tax giveaway in the works for 2017. City staff agendized a Dec. 20, 2016 item seeking Council approval to give away half of LB's hotel room tax for a developer/operator who plans to create a "boutique" hotel in the Ocean Center Building on the SW corner of Ocean Blvd./Pine Ave...but at the opening of the Council meeting, Mayor Garcia announced that the item was withdrawn for additional unspecified work. [LBREPORT.com coverage here.]

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During the City Council hearing on the May 2016 hotel room tax giveway, glitzy artist renderings were displayed. Multiple Councilmembers and Mayor Garcia praised plans for the hotel...but no Councilmembers or the Mayor inquired about or questioned financial aspects of the transaction.

This was despite the fact that city staff's agendizing memo recommended approval based in large part on figures/assumptions in a report prepared by a consultant hired by the buyer/developer...and city staff didn't attach that report to the agenda item where the public or press could see it. No Councilmember asked publicly to see the buyer/developer-hired consultant report No Councilmember asked publicly to see an analysis of the report's figures/assumptions performed by the City's real estate economic consultant. No Councilmember asked to see an independent appraisal of the property's land value.

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In addition, City Hall's (now retired) Director Economic and Property Development, Mike Conway, disclosed during the hearing -- to our knowledge for the first time publicly -- that city staff's recommended buyer/developer wasn't the highest bid per square foot. Mr. Conway didn't say how high the highest bid was or from whom it came...but he assured the Council that city staff's choice was the best proposal on a number of grounds.

LBREPORT.com reported on all this in detail at this link and at this link

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In public testimony, a new group announced itself -- "Citizens Against Downtown Long Beach Giveaways" -- and Warren Blesofsky came to the speaker's podium and criticized the Council's record on several grounds. No Councilmembers or the Mayor responded publicly.

Vice Mayor Suja Lowenthal (exiting after a decade on the Council in mid-July) praised the hotel in effusive terms, likening it to a jewel in the crown with significance citywide across from a new Civic Center (a project she described as worthy of a major city) along with new plans being discussed for the Queen Mary area.

City staff's agendizing memos accompanying the May 2016 transaction (approved by Councilmembers 8-0) and the December 20 proposed transaction that may return in 2017 both asserted that absent the hotel room tax giveway, the proposed projects would not proceed. What does that effectively tell Councilmembers dispensing millions of taxpayer dollars basically to suit private entities?

Do the math: taxpayer cost of the May 2016 transaction approved by the Council 8-0 = $27 million over 20 years. Estimated taxpayer cost of the December 2016 transaction as proposed = $12.4 million. That's nearly $40 million over 20 years, or roughly $2 million in taxpayer revenue per year.

That would cover nearly the entire cost of restoring Fire Engine 17 to Station 17 (Stearns Park.) Or provide the lion's share of funding to restore LBPD's field anti-gang unit. Or do many other things for the public.

LBREPORT.com plans to report these taxpayer-impacting transactions in detail as they occur in 2017.

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