LA officials backtrack on aid for Koreatown hotel project

City had sued developer a decade over over failure to pay $3.5M in taxes

Los Angeles /
Oct.October 27, 2020 09:40 AM
Herb Wesson (top) and Curren Price with a rendering of 3800 W 6th Street (Linkedin, Twitter, Large Arch)
Herb Wesson (top) and Curren Price with a rendering of 3800 W 6th Street (Linkedin, Twitter, Large Arch)

Some powerful Los Angeles city officials are having second thoughts about providing subsidies for a Koreatown hotel project.

The change of heart comes after officials were pressed about a tax dispute the city had with the developer, Leo Lee, in the years after the Great Recession, according to the Los Angeles Times.

The Council earlier this year began exploring incentives to help Lee’s 192-key project on W. 6th Street move forward.

City Attorney Mike Feuer now opposes any form of financial aid, and Councilmembers Herb Wesson and Curren Price are also dropping their support for aid, according to the Times. The two elected officials are also urging colleagues to follow suit.

The city sued Lee in 2010 for failing to pay its share of local taxes. A judge determined Lee owed the city $3.5 million. The city and Lee settled two years later and Lee paid $2.6 million to the city.

Lee returned to the Council seeking financial aid for his project earlier this year.

Victor Sahn, who was Lee’s bankruptcy attorney in 2012, said that Lee is wrongfully being portrayed as a “deadbeat” and claims there was a legitimate reason for the dispute over taxes. Some of the units in the building at the center of the suit were rented monthly, he said, so they should not have been subject to transient occupancy taxes.

Both Wesson and Price signed a motion last year asking city staff to look into whether Lee should be able to keep some of the taxes his project generated.

A representative for Wesson said he didn’t know about the dispute until contacted by Feuer, and a spokesperson for Price said he heard about it through Wesson.

Wesson has since drafted a motion to rescind any exploration of financial aid for the project. [LAT] — Dennis Lynch


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