Oceanwide Buyers Want Tax Incentives For 184-Room Hotel

The buyers of the Oceanwide Plaza project near Downtown’s Crypto.com Arena are looking for a little help from the city to complete the trio of towers that began development under a now-bankrupt China-based developer. 

KPC Development and Lendlease are hoping to secure a tax incentive agreement for the project’s 184-room hotel similar to the tax incentive agreements that helped other projects in Downtown get built, according to a motion introduced last week by Councilmember Ysabel Jurado. Urbanize LA was the first to report on the motion. 

“The proposed hotel component is anticipated to complement the existing convention center and entertainment district uses by providing additional hotel rooms within walking distance of major event venues, thereby improving the City’s competitiveness in attracting conventions, trade shows, major sporting events, and tourism activity,” the motion says. 

Past agreements allowed hotel owners to keep a portion of their transient occupancy taxes and were very common for new hotel projects in the Downtown area. Between 2005 and 2018, Los Angeles officials approved about $1B in assistance for hotels and other developments. During that time, the then-city controller argued, they didn’t have a comprehensive process for tracking the effects. 

Hotel developers and the council members that represent them have said the hotels wouldn’t pencil without the assistance. The arguments supporters often presented usually invoked the necessity of these hotels for the success of the convention center, Downtown’s tourism engine, and even the Olympics. 

It was an argument that was increasingly under scrutiny as Downtown’s popularity rose as a development target and after-work nightlife destination, but it may land differently with council members now that Downtown’s trajectory is no longer an undeniably upward one. 

KPC Development is led by a healthcare entrepreneur named Kali P. Chaudhuri. KPC builds and owns commercial properties in California and India, including the Kali Hotel in Inglewood’s Hollywood Park.

Lendlease was the general contractor on the Oceanwide project under the original developer, Oceanwide Plaza LLC, a subsidiary of China Oceanwide Holdings.

The project, which will also include 504 condos and 150K SF of retail space, has been stalled for at least six years and only recently began to see signs of life when crews began to remove graffiti from the unfinished towers.

Jurado’s motion for the tax incentives will require the approval of the full council, but it is first scheduled to go before the Economic Development and Jobs Committee on Tuesday.