With construction almost finished, the Wilshire Grand—the new tallest tower in the west—is becoming a more familiar piece of the LA skyline. But what many who have watched its multi-year rise may not realize is how much city-issued tax breaks helped it reach those towering heights.
As The Real Deal reports, developer Hanjin International will receive nearly $61 million in tax incentives from the city in order to help close a gap in financing for the $1.2 billion skyscraper.
In 2011, the city agreed to kick in $54 million in tax breaks, but since then, Hanjin committed to including 400,000 square feet of retail space in the 73-story tower, which made the project eligible for an additional $6.8 million.
These numbers might seem high, but they pale in comparison to what developers have received for other high-profile Downtown projects. Most recently, the City Council agreed to throw nearly $200 million worth of incentives toward a long-delayed Grand Avenue hotel and condo project designed by Frank Gehry.
The developer of another recently proposed hotel, tentatively called the Cambria, has even gone to the length of spending $150,000 studying the kinds of tax incentives it would like to receive from the city.
Mitch Hochberg, who heads the development firm behind the upcoming Fig+Pico hotel in South Park, tells The Real Deal these types of tax breaks are necessary to attract hotel builders to the Downtown area, where the price of land and construction are high enough to make hotel projects otherwise unappealing.
The incentives are most often awarded in the form of discounts on the transient occupancy tax that all hotels must pay to the city. In one of its most generous deals, the city gave a 25-year rebate to the LA Live project totaling at least $246 million.
- Wilshire Grand secured nearly $61M in tax breaks from the city [The Real Deal]
- LA May Hand Out $185 Million to Fancy Frank Gehry Complex [Curbed LA]
- Watch the Wilshire Grand get its spire, making it the tallest building in Los Angeles [Curbed LA]
- New Wilshire Grand Will Be the West Coast's Tallest Tower [Curbed LA]