HOTEL MARKET STUDY DOWNTOWN LOS ANGELES SUPPORTING THE LOS ANGELES CONVENTION CENTER

Transcription

1 HOTEL MARKET STUDY DOWNTOWN LOS ANGELES SUPPORTING THE LOS ANGELES CONVENTION CENTER 2017 Full report available at

2 INDEX OF EXHIBITS executive summary , 2 BACKGROUND record-breaking visitation transient occupancy tax growth city of la lodging metrics lacc performance convention center comparison analysis hotel supply in comparable cities west coast city hotel rooms by distance west coast city hotel rooms by RATING , 11 hotel meeting space in comparable cities existing hotels with 3/4 mile of lacc THE area s newest hotels map of existing hotels hotels under construction map of existing and under construction hotels proposed hotels proposed hotel highlights , 20 map of existing, under construction, and proposed hotels.. 21 new hotel absorption RECOMMENDATIONS PROXIMITY RATINGS MEETING SPACE TOOLS INFRASTRUCTURE CONCLUSION commissioned by: councilmember josé huizar prepared by: robert r. bud ovrom

3 EXECUTIVE SUMMARY Downtown Los Angeles is booming! And probably no development has been a bigger spark plug for that boom than the Sports and Entertainment District in South Park, with the Staples Center, the Microsoft Theater, the reinvigorated Convention Center, LA Live and the surrounding hotels and residential/retail development. The continued growth of that prosperity will be even further enhanced with additional hotel rooms. This report highlights that Los Angeles has doubled the number hotel rooms within walking distance of its Convention Center in just the last four years, from about 2,500 rooms to more than 5,000. And, there is every indication the District can support even more. Tourism and the Leisure and Hospitality Sector are often overlooked or taken for granted in Los Angeles, eclipsed by higher profile industries such as entertainment and high tech. In fact, Leisure and Hospitality is one of the fastest growing sectors in our local economy. Visitation increased almost 23%, from 38.5 million visitors in 2010 to 47.3 million in 2016 and is ahead of the trajectory needed to reach the City s goal of 50 million visitors by The Transient Occupancy Tax (TOT) charged to hotel guests was the seventh largest General Fund revenue source in Fiscal Year , and had the highest year-over-year percentage growth, reaching a record breaking $248.5 million in 2016, up 13.9% from In 2016, City of Los Angeles hotels saw double-digit percentage increases in both Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR) and their occupancy rates averaged more than 80% for the third consecutive year! Among the top 25 U.S. markets, the Los Angeles market had the highest year-over-year RevPAR growth (the most important lodging metric) at 10.56% for That high level of economic growth will be enhanced with even more hotels, starting with the Sports and Entertainment District in downtown. 1

4 EXECUTIVE SUMMARY (cont.) In 2013, with only 2,597 hotel rooms in the targeted area, the Convention and Tourism Development Department set what seemed like an implausible benchmark of 8,000 hotel rooms open or under construction within walking distance of the Convention Center by Today, that goal is clearly within reach! With 4,637 rooms now open and another 717 currently under construction, the District will soon have 5,354 hotel rooms - over twice as many as existed when the goal was set in 2013 and 67% of the way to 8,000. This report will also itemize an additional 10 hotels, totaling 4,434 rooms, which have been proposed and accepted by the Planning Department. IF all of these proposed hotels were built, the original goal would actually be exceeded, with a total of 9,788 rooms. Given the nature and economics of development proposals, not all these hotels will be constructed, but it does demonstrate considerable interest in hotel development in the District and a high level of confidence that the goal of 8,000 rooms can and will be reached. Although 8,000 hotel rooms will still be less than the City s major competitors, it is probably the most the market can realistically absorb by Moreover, it is a stunning achievement compared to where the District was just four years ago! The exciting success of the Convention Center and the surrounding sports and entertainment venues should not be taken for granted, and the City and private sector cannot be allowed to rest on their laurels. When it comes to remaining competitive with other convention center cities, the status quo never lasts every day, every market is either getting stronger or weaker. With continued public and private-sector leadership and diligence, Downtown Los Angeles best days as a competitive, vibrant and dynamic Convention Center City lie ahead! 2

5 BACKGROUND RECORD-BREAKING VISITATION VISITORS TO LOS ANGELES COUNTY BY CALENDAR YEAR 50M TOTAL VISITORS IN MILLIONS 45M 40M 35M 38.5M % 40.4M % 2.0% 2.5% 44.2M 41.4M 42.2M CALENDAR YEAR YOY % INCREASE 3.1% 45.6M % 47.3M 2016 Los Angeles County welcomed 47.3 million visitors in 2016, the sixth consecutive year of record-breaking visitation. The City is well on its way to achieving its goal of 50 million visitors by 2020 (and probably sooner!). Tourism is among the largest and healthiest contributors to the LA economy, bringing in $29.9 billion in direct spending and $33.6 billion in economic impact in SOURCE: CTD, LATCB

6 TRANSIENT OCCUPANCY TAX GROWTH TOT GENERAL FUND RECEIPTS COLLECTED BY CALENDAR YEAR TOT IN MILLIONS $250M $200M $150M $100M $124.6M 2010 YOY % INCREASE 4.5% 14.4% 15.1% 10.7% 14.9% $218.2M $181.3M $189.5M $143.2M $158.5M CALENDAR YEAR 13.9% $248.5M 2016 Transient Occupancy Tax (TOT) reached a record breaking $248.5 million in 2016, up 13.9% over TOT was the seventh largest top General Fund revenue source in Fiscal Year , and had the highest year over year percentage growth. 4 SOURCE: CTD, OFFICE OF FINANCE

7 CITY OF LOS ANGELES LODGING METRICS AVERAGE OCCUPANCY RATE BY CALENDAR YEAR AVERAGE DAILY RATE BY CALENDAR YEAR OCCUPANCY RATE 85% 80% 75% 70% % 1.6% 0.2% CALENDAR YEAR 1.8% DAILY RATE IN $ $200 $175 $150 $ % 7.5% 3.3% CALENDAR YEAR 11.0% ROOM NIGHTS IN MILLIONS 11.5M 11.0M 10.5M 10.0M ROOM NIGHTS SOLD BY CALENDAR YEAR 1.8% 1.4% 4.5% 1.2% 11.17M 11.38M 11.02M 10.43M 10.55M CALENDAR YEAR REVPAR IN $ $150 $125 $100 $75 AVERAGE REVENUE PER AVAILABLE ROOM BY CALENDAR YEAR 13.0% 8.8% 9.2% 5.7% CALENDAR YEAR City of Los Angeles hotels had a great year in 2016, with double-digit percent increases in both average daily rate (ADR) and revenue per available room (RevPAR), and the occupancy rate averaged above 80% for the third consecutive year. Among the top 25 U.S. markets, Los Angeles County had the highest year-over-year RevPAR growth (the most important lodging metric), with 10.8% in SOURCE: CTD, LATCB

8 LACC PERFORMANCE LACC EXHIBIT HALL OCCUPANCY RATE 80% $600M LACC ECONOMIC IMPACT AVERAGE OCCUPANCY RATE 60% 40% 20% 57% 60% 65% 72% DIRECT & INDIRECT SPENDING $400M $200M $410.8M $562.8M 0% FY13 FY14 FY15 FISCAL YEAR FY16 $0M FY15 FY16 FISCAL YEAR The Los Angeles Convention Center (LACC) is performing better today than at any time in its history. The LACC Exhibit Halls maintained an average occupancy of 72% during Fiscal Year , 10.8% higher than the prior year. By industry standards, the practical maximum is 70%. As a result, the LACC has earned operational profits (revenues over expenditures) of approximately $18 million in the first 3.5 years of the P3 contract. During FY16, the LACC generated an estimated $562.8 million in economic impact, 37% higher than FY15. 6 SOURCE: CTD, LACC, LATCB

9 CONVENTION CENTER COMPARISON CALENDAR YEAR 2014 LOS ANGELES SAN FRANCISCO ANAHEIM SAN DIEGO CITYWIDE EVENTS ROOM NIGHTS SOLD 197,037 1,018, , ,955 AVG ROOM NIGHTS/EVENT 7,578 17,261 7,363 8,868 Despite performing better than ever before, the LACC still has a significantly lesser economic impact when compared to the other major convention centers in California. The San Diego Convention Center, which is smaller than the LACC, attracts nearly three times as many major conventions than the LACC, which results in over three times as many room nights sold. San Francisco sells over five times as many room nights as LA, because they are booking bigger and better conventions, with over twice as many room nights per event. One of the primary reasons the LACC does not attract more major conventions is the significant lack of hotel rooms. 7 SOURCE: CTD, LATCB

10 ANALYSIS HOTEL ROOM SUPPLY IN COMPARABLE CITIES This Hotel Market Study focuses on the Sports and Entertainment District of Downtown Los Angeles (DTLA), centered around the Los Angeles Convention Center, Staples Center, Microsoft Theater and LA Live. One of the major reasons the LACC has never been able to maximize its potential to attract more and larger conventions is the lack of hotel rooms. Los Angeles has a surprisingly small number of hotel rooms within walking distance of its convention center when compared to other major cities. In 2013, with the creation of the Department of Convention and Tourism Development, the goal was established to have 8,000 hotel rooms opened or under construction within walking distance of the LACC by At that time, there were 2,597 hotel rooms in this targeted area. SOURCE: CTD, JLL 8 CONVENTION CENTER HOTEL ROOMS WITHIN 3/4 MILE 1 SAN FRANCISCO 21,570 2 NEW YORK 15,370 3 ANAHEIM 13,400 4 SEATTLE 10,660 5 SAN ANTONIO 10,540 6 SAN DIEGO 10,370 7 ATLANTA 9,860 8 ORLANDO 8,920 9 DENVER 8, WASHINGTON DC 8, LAS VEGAS 7, AUSTIN 7, INDIANAPOLIS 7, HOUSTON 6, DALLAS 5, NASHVILLE 5, NEW ORLEANS 4, LOS ANGELES 4, PHOENIX 3, BOSTON 3, LONG BEACH 2, CHICAGO 1,490

11 WEST COAST CITY HOTEL ROOMS BY DISTANCE CONVENTION CENTER 1/4 MILE 1/2 MILE 3/4 MILE TOTAL SAN FRANCISCO 3,290 7,470 10,810 21,570 ANAHEIM 4,430 5,470 3,590 13,400 SEATTLE 3,340 5,480 1,840 10,660 SAN DIEGO 2,120 5,120 3,130 10,370 LOS ANGELES 0 2,204 2,433 4,637 The number and proximity of hotel rooms are major factors when trying to attract large national conventions, which provide the greatest economic impact. The closer the hotels are to the convention center, the better it is for the customer. Industry standard is that most conventioneers won t walk more than ¾ mile. An on-site headquarters hotel would be ideal, but for physical and legal reasons, that does not appear to be feasible. Los Angeles needs to particularly focus on hotels within ½ mile radius of the LACC. 9 SOURCE: CTD, JLL

12 WEST COAST CITY HOTEL ROOMS BY RATING CONVENTION CENTER LUXURY UPSCALE SELECT SERVICE TOTAL SAN FRANCISCO 5,570 13,180 2,630 21,570 ANAHEIM 0 8,330 5,070 13,400 SEATTLE 2,250 7,160 1,250 10,660 SAN DIEGO 2,060 7,230 1,080 10,370 LOS ANGELES 1,890 1,585 1,162 4,637 To be successful, a convention center (and the entire downtown area) needs to provide hotel rooms at every price point, from luxury to budget. Within the industry, Smith Travel Research (STR) is commonly used to differentiate seven ratings, or chain scales: Luxury, Upper Upscale, Upscale, Upper Midscale, Midscale, Economy and Independent. For the purpose of this report, these scales were consolidated into three categories: luxury, upscale, and select service. Los Angeles needs to focus on getting more rooms in every category. 10 SOURCE: CTD, JLL

13 WEST COAST CITY HOTEL ROOMS BY RATING LOS ANGELES - EXISTING LOS ANGELES SELECT/OTHER UPSCALE LUXURY 19% 41% 40% 17% 43% 40% SAN DIEGO ANAHEIM SAN FRANCISCO SEATTLE 10% 12% 12% 20% 38% 27% 21% 70% 62% 61% 67% As shown above, the area lacks upscale hotels, which are particularly necessary to support the LACC. Even when taking into consideration the hotels which are currently under construction and will be open by 2019 (Park Hyatt, Trinity Esplendor, and the Proper Hotel), this critical segment will still be underrepresented. Los Angeles should expect to have at least 50% of the hotel mix serving the LACC be upscale. 11 SOURCE: CTD, JLL

14 HOTEL MEETING SPACE IN COMPARABLE CITIES CONVENTION CENTER MEETING ROOM SQUARE FEET WITHIN 3/4 MILE The area surrounding the LACC also has a surprisingly small amount of self-contained meeting space within the nearby hotels. Such meeting space is very beneficial to the LACC as well as the Downtown business community. Another factor which makes the San Diego Convention Center more successful is that its nearby hotels have over 250% more meeting space than the LACC s hotels. To be competitive, Los Angeles should have large hotels with significant meeting space. Large conference hotels will typically have 75 to 100 square feet of meeting space for each hotel room. For example, a 1,000-room hotel should have 75,000 to 100,000 square feet of meeting space. SOURCE: CTD, JLL 1 SAN FRANCISCO 759,300 2 ORLANDO 608,900 3 ATLANTA 583,800 4 SAN DIEGO 498,300 5 DENVER 468,200 6 ANAHEIM 447,500 7 SAN ANTONIO 436,800 8 DALLAS 405,700 9 HOUSTON 392, AUSTIN 378, INDIANAPOLIS 370, BOSTON 350, SEATTLE 319, WASHINGTON DC 309, LAS VEGAS 299, NASHVILLE 253, LOS ANGELES 221, NEW ORLEANS 210, PHOENIX 182, LONG BEACH 137, NEW YORK 134, CHICAGO 49,100 12

15 EXISTING HOTELS WITHIN 3/4 MILE OF THE LACC KEY HOTEL ROOMS DISTANCE STR RATING MEETING SPACE SQUARE FEET 1 InterContinental Los Angeles Downtown luxury 66,540 2 JW Marriott Los Angeles LA Live luxury 77,000 3 Sheraton Los Angeles (The Bloc) upscale 20,172 4 Hotel Indigo upscale 11,000 5 Figueroa Hotel upscale 7,764 6 Stillwell Hotel select 5,000 7 Freehand Hotel & Hostel select 13,000 8 Residence Inn Los Angeles LA Live upscale 4,500 9 Mayfair Hotel select 3, Ace Hotel upscale 6, Luxe City Center Hotel upscale 6, Courtyard Los Angeles LA Live upscale 0* 13 Ritz Milner select Ritz-Carlton Los Angeles LA Live luxury 0** 15 O Hotel select 150 SUBTOTAL 4, ,151 *Shared meeting space with the Residence Inn Los Angeles LA Live **Shared meeting space with the JW Marriott Los Angeles LA Live 13 SOURCE: CTD, JLL

16 THE AREA S NEWEST HOTELS INTERCONTINENTAL HOTEL, WILSHIRE GRAND CENTER DEVELOPER: KOREAN AIR LOT SIZE: ACRES HEIGHT: 1 TOWER, 73 STORIES HOTEL: 889 ROOMS RESIDENTIAL: NONE RETAIL: 45,000 SQ FT OFFICE: 360,000 SQ FT HOTEL INDIGO, METROPOLIS DEVELOPER: GREENLAND USA LOT SIZE: ACRES HEIGHT: 4 TOWERS, STORIES HOTEL: 350 ROOMS RESIDENTIAL: 1,558 CONDOS RETAIL: 74,000 SQ FT OFFICE: NONE FREEHAND HOTEL AND HOSTEL DEVELOPER: SYDELL GROUP LOT SIZE: ACRES HEIGHT: 13 STORIES HOTEL: 226 ROOMS RESIDENTIAL: NONE RETAIL: 500 SQ FT OFFICE: NONE 14

17 EXISTING HOTELS WITHIN 3/4 MILE OF THE LACC KEY HOTEL ROOMS 1 InterContinental Los Angeles Downtown JW Marriott Los Angeles LA Live Sheraton Los Angeles (The Bloc) Hotel Indigo Figueroa Hotel Stillwell Hotel Freehand Hotel & Hostel Residence Inn Los Angeles LA Live Mayfair Hotel Ace Hotel Luxe City Center Hotel Courtyard Los Angeles LA Live Ritz Milner Ritz-Carlton Los Angeles LA Live O Hotel 67 SUBTOTAL 4,637 15

18 HOTELS UNDER CONSTRUCTION KEY HOTEL ROOMS DISTANCE STR RATING MEETING SPACE SQUARE FEET 16 Broadway Trade Center (Waterbridge) tbd - 17 Esplendor Trinity Hotel upscale 10, Park Hyatt (Oceanwide Plaza) luxury 10, The Downtown LA Proper (Case Hotel) upscale - SUBTOTAL ,000 BROADWAY TRADE CENTER DEVELOPER: WATERBRIDGE CAPITAL LOT SIZE: ACRES HEIGHT: 16 STORIES HOTEL: 200 ROOMS RESIDENTIAL: NONE RETAIL: 200,000 SQ FT OFFICE: 400,000 SQ FT ESPLENDOR TRINITY HOTEL DEVELOPER: CHETRIT GROUP LOT SIZE: ACRES HEIGHT: 8 STORIES HOTEL: 183 ROOMS RESIDENTIAL: NONE RETAIL: TBD OFFICE: NONE PARK HYATT DEVELOPER: OCEANWIDE LOT SIZE: ACRES HEIGHT: 3 TOWERS, STORIES HOTEL: 183 ROOMS RESIDENTIAL: 504 CONDOS RETAIL: 166,000 SQ FT OFFICE: NONE THE DOWNTOWN LA PROPER DEVELOPER: PROPER HOSPITALITY LOT SIZE: ACRES HEIGHT: 13 STORIES HOTEL: 151 ROOMS RESIDENTIAL: NONE RETAIL: TBD OFFICE: NONE 16

19 HOTELS EXISTING & UNDER CONSTRUCTION KEY HOTEL ROOMS 1 InterContinental Los Angeles Downtown JW Marriott Los Angeles LA Live Sheraton Los Angeles (The Bloc) Hotel Indigo Figueroa Hotel Stillwell Hotel Freehand Hotel & Hostel Residence Inn Los Angeles LA Live Mayfair Hotel Ace Hotel Luxe City Center Hotel Courtyard Los Angeles LA Live Ritz Milner Ritz-Carlton Los Angeles LA Live O Hotel Broadway Trade Center (Waterbridge) Esplendor Trinity Hotel Park Hyatt (Oceanwide Plaza) The Downtown LA Proper (Case Hotel) 151 SUBTOTAL 5,354 17

20 PROPOSED HOTELS KEY HOTEL ROOMS DISTANCE STR RATING MEETING SPACE SQUARE FEET 20 Fig+Pico Conference Center Hotels (Lighstone) 1, select - 21 City Lights on Fig (TriCal Construction) 1, tbd - 22 JW Marriott Expansion luxury 57, dtla South Park tbd - 24 Toyota Site (L&R Group of Companies) tbd - 25 Cambria Hotel & Suites (PPP) upscale - 26 Figueroa Centre (Regalian, LLC) luxury - 27 The Reef (LA Mart) select - 28 Home2 Suites select - 29 W Hotel (Figueroa North, Hazens) luxury 16,000 SUBTOTAL 4,434 73,000 With the leisure, convention and business travel continuing to boom, there has been a lot of interest expressed in future hotel development projects. All of these above projects have submitted actual plans to the City and have been accepted by the Planning Department. These projects are proposals, and as such, it is unlikely that all the above projects will be built as proposed. With 4,637 existing hotel rooms and 717 rooms currently under construction, the area only needs 2,646 to reach the goal of 8,000 rooms. 18

21 PROPOSED HOTEL HIGHLIGHTS JW MARRIOTT EXPANSION DEVELOPER: AEG LOT SIZE: ACRES HEIGHT: 38 STORIES HOTEL: 755 ROOMS RESIDENTIAL: NONE RETAIL: 17,800 SQ FT OFFICE: NONE CITY LIGHTS ON FIG DEVELOPER: TRICAL CONSTRUCTION LOT SIZE: ACRES HEIGHT: 53 STORIES HOTEL: 1,024 ROOMS RESIDENTIAL: NONE RETAIL: TBD OFFICE: NONE W HOTEL DEVELOPER: SHENZHEN HAZENS LOT SIZE: ACRES HEIGHT: 2 TOWERS, STORIES HOTEL: 300 ROOMS RESIDENTIAL: 485 CONDOS RETAIL: 80,000 SQ FT OFFICE: NONE FIG + PICO CONFERENCE CENTER HOTELS MOXY + 2 BRANDS TO BE NAMED DEVELOPER: LIGHTSTONE LOT SIZE: ACRES HEIGHT: 2 TOWERS, STORIES HOTEL: 1,162 ROOMS RESIDENTIAL: NONE RETAIL: 13,100 SQ FT OFFICE: NONE 19

22 PROPOSED HOTEL HIGHLIGHTS CAMBRIA HOTEL & SUITES DEVELOPER: PACIFIC PROPERTY PARTNERS LOT SIZE: ACRES HEIGHT: 18 STORIES HOTEL: 247 ROOMS RESIDENTIAL: NONE RETAIL: 17,800 SQ FT OFFICE: NONE TOYOTA SITE DEVELOPER: L&R GROUP OF COMPANIES LOT SIZE: ACRES HEIGHT: 52 STORIES HOTEL: 250 ROOMS RESIDENTIAL: 336 UNITS RETAIL: 8,500 SQ FT OFFICE: NONE FIGUEROA CENTRE DEVELOPER: REGALIAN, LLC LOT SIZE: ACRES HEIGHT: 66 STORIES HOTEL: 220 ROOMS RESIDENTIAL: 200 CONDOS RETAIL: 94,000 SQ FT OFFICE: NONE 20

23 KEY HOTEL ROOMS 1 InterContinental Los Angeles Downtown JW Marriott Los Angeles LA Live Sheraton Los Angeles (The Bloc) Hotel Indigo Figueroa Hotel Stillwell Hotel Freehand Hotel & Hostel Residence Inn Los Angeles LA Live Mayfair Hotel Ace Hotel Luxe City Center Hotel Courtyard Los Angeles LA Live Ritz Milner Ritz-Carlton Los Angeles LA Live O Hotel Broadway Trade Center (Waterbridge) Esplendor Trinity Hotel Park Hyatt (Oceanwide Plaza) The Downtown LA Proper (Case Hotel) Fig+Pico Conf. Center Hotels (Lighstone) 1, City Lights on Fig (TriCal Construction) 1, JW Marriott Expansion dtla South Park Toyota Site (L&R Group of Companies) Cambria Hotel & Suites (PPP) Figueroa Centre (Regalian, LLC) The Reef (LA Mart) Home2 Suites W Hotel (Figueroa North, Hazens) 125 TOTAL 9,788 HOTELS EXISTING, UNDER CONSTRUCTION & PROPOSED 21

24 NEW HOTEL ABSORPTION HOTEL ROOMS OPENING DATE JW MARRIOTT LOS ANGELES L.A. LIVE 878 February 2010 RITZ CARLTON LOS ANGELES L.A. LIVE 123 February 2010 RESIDENCE INN LOS ANGELES L.A. LIVE 219 may 2014 COURTYARD LOS ANGELES L.A. LIVE 174 may 2014 FREEHAND HOTEL AND HOSTEL 226 june 2017 INTERCONTINENTAL LOS ANGELES DOWNTOWN 889 july 2017 BROADWAY TRADE CENTER 200 est ESPLENDOR TRINITY 183 est DOWNTOWN LA PROPER 151 est PARK HYATT 183 est CAMBRIA HOTEL & SUITES 247 est It is widely agreed that the area serving the LACC needs more hotel rooms, however, it is a separate matter to predict how fast the market can absorb the additional room supply as it comes online. Ultimately, market conditions, not the City, will determine the pace. Hotel developers, operators and financiers will not build new hotels unless and until they are convinced the market will support them based on normal supply and demand. Up to this point, occupancy and average daily rate have remained strong as new hotel supply has come on the market, indicating supply has not yet exceeded demand. 22

25 RECOMMENDATIONS As the City closes in on its goal of 8,000 hotel rooms open or under construction within walking distance of the LACC by 2020, particular focus should be given to certain specific strategies: PROXIMITY All hotels built within the ¾ mile radius would be beneficial, with those within the targeted area shown in green on the map being the most beneficial. Enough sites still remain available within this targeted area. Seven of the proposed hotels noted earlier, totaling 3,783 rooms, fall within this area and have already submitted plans to the City. While this is more than enough to reach 8,000 rooms, it is not likely all will be built as proposed due to normal market dynamics. Going forward, it is essential that as many of these sites in the targeted area as feasible be developed with hotels, in order to capture the jobs and tax revenues created by these large commercial projects. 23

26 RATINGS It is important for the success of the Sports and Entertainment District to have hotels for every price point. The LACC is particularly underserved by large, upscale hotels when compared to other major convention cities. Upscale hotel developers and operators have an inherent interest in being located in the very dynamic Downtown Los Angeles Sports and Entertainment District. Going forward, to be competitive, the City should expect to have at least 50% of the targeted total of 8,000 hotel rooms be upscale. MEETING SPACE With or without the expansion of the LACC, the area needs large, upscale hotels, with a proportionate amount of self-contained meeting space, typically 75 to 100 square feet of meeting space per hotel room. Large, full-service hotels are the best vehicles for delivering the significant meeting space which is essential for the LACC and the broader business community. Going forward, the City should strive to attract at least one additional full-service headquarters hotel with 75 to 100 square feet of meeting space per hotel room. 24

27 TOOLS The LACC, Staples Center, LA Live, and the JW Marriott/Ritz Carlton hotels were developed with varying degrees of assistance from the Los Angeles Redevelopment Agency, which no longer exists. As a result, the City does not have as many tools available today to implement the City s vision for any such targeted areas. Going forward, the City should consider using the tools which it still has, such as: The continued judicious reinvestment of net new site specific tax revenues, such as Transient Occupancy Tax, in Public Private Partnerships (P3) to promote the development of high priority hotel projects. The smart use of City land use discretionary approvals to make sure the projects being considered are consistent with the City s planning and urban design for this area. INFRASTRUCTURE Even when the City achieves its goal of 8,000 hotel rooms within walking distance of the LACC, it will still have far fewer rooms than most other major convention cities. Going forward, the City should promote key infrastructure projects which will improve transportation and connectivity between the Sports and Entertainment District and other hotels and venues in Downtown and throughout the City, such as: Expand and improve the Metro Pico Station; Seek accelerated funding to construct the LA Streetcar Project; and Complete the MyFigueroa street enhancement project. 25

28 CONCLUSION Many factors have contributed to the dramatic economic resurgence of Downtown Los Angeles, but perhaps no development has been a bigger spark plug than the success of the Staples Center, the reinvigorated Convention Center and LA Live as the heart of the Sports and Entertainment District. There are many indications that prosperity will continue, with overall growth in tourism and business travel (particularly from Asia). However, with the continually strengthening economy, there is also increased competition nationally, particularly on the West Coast with Seattle, San Francisco, Anaheim and San Diego also enjoying robust growth in the leisure and hospitality sector. The Downtown Sports and Entertainment District cannot afford to rest on its laurels. The status quo never lasts - every day, every market area is either getting stronger or weaker. This report pointed out the need for more hotels and meeting space in the Sports and Entertainment District when compared to its major competitor cities, and put forward specific recommendations on how to reach the goal of 8,000 hotel rooms open or under construction by When that goal of 8,000 rooms was set in 2013, it seemed like a stretch, because only 2,597 rooms existed at the time. With 4,637 rooms now open and another 717 under construction, the targeted area will soon have 5,354 rooms, or 67% of its goal. That goal is now clearly within reach! In order to achieve that goal, the report makes specific recommendations which could be implemented, including the continued judicious reinvestment of net new site specific tax revenues, such as Transient Occupancy Tax, in Public Private Partnerships (P3) to promote the development of high priority hotels. More than ever, the City needs to continue to provide strong leadership to achieve the vision of the Sports and Economic District as a strong economic engine for Downtown and all of Los Angeles. 26

29 ABOUT COUNCIL DISTRICT 14 The 14th Council District is home to more than 246,000 residents and encompasses some of the oldest and most historic neighborhoods in the City of Los Angeles. Covering such communities as Eagle Rock, Highland Park, Glassell Park, El Sereno, Boyle Heights, and Downtown Los Angeles, it is one of the most culturally diverse districts in the City. ABOUT COUNCILMEMBER HUIZAR Councilmember José Huizar was first elected to the Los Angeles City Council in A Complete Streets champion, Huizar has brought major improvements to the public walkways, spaces and thoroughfares of his district and the entire City, prioritizing pedestrian, bicyclist and public transit users as much as automobiles. Huizar is one of the City s most proactive elected officials in pursuing creative solutions to address homelessness. The Councilmember worked with Los Angeles County officials to create an intensive five-days-a-week medical, housing, rehabilitative, and social service outreach program in Skid Row (C3), which is now the model for the entire County; he helped create the nation s first permanent largecity committee to address homelessness; and he co-authored the $1.2 billion homeless housing bond, the largest city bond in history. Prior to his election to the City Council, Councilmember Huizar served as President of the Board of Education for the Los Angeles Unified School District and oversaw the largest school construction project in U.S. history. Born in Zacatecas, Mexico, Councilmember Huizar is the first Mexican immigrant elected to the Los Angeles City Council. He received degrees from the University of California, Berkeley; Princeton University; and UCLA. He resides in Boyle Heights with his wife, Richelle, and their children: Emilia, Isabella, Simon and Aviana. CONTACT US 200 N. Spring Street, Room 465 Los Angeles, CA P: (213) F: (213) councilmember.huizar@lacity.org josehuizar.com facebook.com/huizar.jose twitter.com/josehuizar instagram.com/cmjosehuizar