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[ LA WATCHDOG ](https://www.citywatchla.com/la-watchdog)
# Should LA Subsidize DTLA Hotels?
December 18 2025
Written by Jack Humphreville.
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LA WATCHDOG - The City Council approved the South Park Towers development, a $300 million, 450,000 square foot development within walking distance of the Convention Center that includes 250 apartments and 300 hotel rooms. The well healed developers are also asking the City to enter into a Development Incentive Agreement that would have the City kickback $70 million from the hotel tax to the developers, a deal that the City Council and Mayor are inclined to approve.
This is a deal that our financially stressed City cannot afford.
The City declared a Financial State of Emergency in June.
The City’s Structural Deficit is expected to be in the range of $600 million over the next four years.
Through October of this fiscal year, the City has a shortfall of over $70 million. This is expected to increase because of higher liability claims, lower levels of tourism, and a weakening economy.
The City will be facing a shortfall of at least $300 million for the upcoming fiscal year that may require further belt tightening (otherwise known as “savings”), potential layoffs, and the elimination of positions.
The City has a deferred maintenance budget of over $5 billion for our streets and sidewalks.
The Department of Recreation and Parks has a deferred maintenance budget of over $2 billion.
Our police department is underfunded. There are less than 8,700 officers and many of its 5,100 vehicles, including 1,500 black and whites, are beyond their useful life. The LAPD is requesting a 6.3%, $125 million increase in its budget.
The Fire Department also needs to repair and maintain its fleet of vehicles and to purchase new equipment. The LAFD is requesting a 20%, $138 million increase in its budget.
The City’s homeless budget is under siege because of cutbacks from the State and Federal government.
The City has an affordable housing crisis, but no money.
The City’s budget will be under considerable pressure because of the 2028 Olympics.
The City is considering a June ballot measure to increase the hotel tax from 14% to 16%, raising an additional $50 million. Will this new money be used for the kickbacks?
The $2.6 billion renovation and expansion of the Convention Center will be a $100 million drain on the City’s General Fund beginning in 2028.
Will Bob Blumenfield, the former head of the Budget and Finance Committee, continue to sponsor and support this kickback? Will Ysabel Jurado support this kickback for this project that is in her Council District 14?
This Development Incentive Agreement is not in the City’s best interests, especially now that there are an adequate number of hotel rooms in DTLA to accommodate the Convention Center.
Will Katy Yaroslavsky and her Budget and Finance Committee deep six this $70 million giveaway to real estate developers and protect the City’s treasury? And what about Mayor Bass and Council President Harris-Dawson? Or will they continue to honor the demands of the real estate complex?
***(Jack Humphreville** writes the LA Watchdog column for CityWatch, where he covers city finances, utilities, and accountability at City Hall. He is President of the DWP Advocacy Committee, serves as the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and is a longtime Neighborhood Council Budget Advocate. With a sharp focus on fiscal responsibility and transparency, Jack brings an informed and independent voice to Los Angeles civic affairs. He can be reached at ****.)*
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