$1 Billion in Tax Incentives Given to L.A. Developers Over Last 13 Years Needs More Scrutiny: City Controller
Los Angeles officials have signed off on about $1 billion in taxpayer assistance for hotels and other development since 2005, yet they lack a rigorous process for finding out whether the money was well spent, City Controller Ron Galperin said Friday.
Mayor Eric Garcetti and the City Council should receive yearly reports that examine whether the city’s multimillion-dollar financial aid packages — deals that can last 25 years — are providing benefits for the public, Galperin said.
City leaders should, for example, determine whether a subsidy given to a newly opened hotel in downtown is followed by a reduction in business at an older hotel nearby, Galperin said. Policymakers also need to know whether the numbers used to determine a real estate project’s “financial gap,” a figure used to justify taxpayer aid, turned out to be accurate, he said.
Galperin’s findings were part of a 29-page report issued Friday on the city’s long-standing practice of letting real estate developers retain a portion of the tax revenue that their projects generate — money that would otherwise flow to the city’s budget.
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