As was inevitable, once UCLA locked itself into a grand hotel-conference center plan, a lawsuit has now been filed that questions not only the grand hotel but also all the other hotel-type operations run by UCLA. Essentially, UCLA operates all of these entities – there are more of them than you might think – on a quasi-commercial basis but isn’t paying the taxes that commercial hotels do. The local hotels were willing to tolerate this competition by a public enterprise to a limit – since activity from UCLA spills over to them. But there are limits. The lawsuit demands that UCLA pay taxes – not just on the grand hotel – but for all of its other hotel-type enterprises.
The Regents sharply questioned UCLA about the hotel project initially, but they inevitably collapse when a campus wants something. This project started out as a grand hotel which involved demolishing the Faculty Center. When there was an outcry, there was a modest scaling back and a move in location to the current parking structure 6. The plan is still way too grand and when it is built (with tax-favored bond finance available to public entities), it is unlikely to meet business plan expectations. Its costs will be hidden – so it will never officially show a loss – but somehow the campus will pay. Had the powers-that-be resisted pressure from the build-and-bond “hospitality” empire that has grown up on campus, a reasonably-sized conference center could have been designed and costly litigation and embarrassment at the Regents could have been avoided.
You can read the press release announcing the lawsuit at the link below:
The lawsuit itself is at:
UPDATE: The LA Times has a story on this lawsuit at http://www.latimes.com/local/lanow/la-me-ln-ucla-hotel-20130404,0,7267572.story
UPDATE: The Daily Bruin story is at http://dailybruin.com/2013/04/04/lawsuit-challenges-luskin-center-projects-tax-exemptions/