Do We Really Want to Roll Straight Ahead on the Hotel Project?

UCLA seems to be rolling along on its hotel-conference center project without looking to the right or left.  That approach can get the university into trouble.

Yours truly received two items from a neighbor group that has been raising concerns about the project.  Below you will find links to two documents that were submitted in connection with the recent environmental hearing on the hotel that UCLA was required to hold.  One document is essentially a cover letter from a law firm summarizing points made in the longer written submission of the group.

The objections range from procedural – it appears that UCLA forgot to comply with certain notice requirements of the hearing – to environmental (including traffic-related) – to tax. The documents set the stage for a lawsuit which could be costly.  Tax issues are particularly salient here because the hotel cannot take commercial business and yet has to fill 250 rooms.  The thing about tax issues is that the IRS ends up doing the litigation, once it is alerted to a potential violation.  And local hotel owners – who have been protesting the project as tax-subsidized competition – have every incentive to notify the IRS of any fishy uses of the hotel.  It is essentially costless and in their interest to do so.

UCLA seems to have been rather loose in the way it has been allowing what appears to be questionable use of other enterprise-type facilities the campus operates.  Once an IRS audit of the hotel is set in motion, the audit could spread to the other facilities and even to other UC campuses.

As we have endlessly pointed out on this blog, the project has an internal contradiction. It cannot keep its 250 rooms filled without commercial business and it will lose money if it doesn’t keep the rooms filled.  If it loses money, one way or another the rest of the campus will pay.  There is already some built-in cost shifting of the project to the campus, e.g., the cost of the rebuilding of the bus turnaround in front of the hotel is not being charged to the hotel project and there appears to be some shortchanging of the parking service for the destruction of structure 6. All of these problems, as we have also endlessly pointed out, could be avoided by scaling back the project and considering some more modest – and more functional – alternatives.  The end result of such a reconsideration and re-scaling could be a project that would be more in keeping with the ostensible purpose of the project and the intent of the donor, i.e., facilitating academic conferences and the dissemination of university-generated knowledge.  To get to that goal, however, the university powers-that-be need to halt the forward momentum, sit down with the various groups in the community, and work out an acceptable deal.

Even the Regents have pointed out the flaws in the project as it is currently proposed.  We don’t know yet whether UCLA plans to retry to get permission from the Regents at the upcoming July meeting.  A better approach would be to hit the pause button and rethink.

Links to the items received are below: