Korean Air wants tax break

This is for a $1-billion hotel, office and retail complex that would replace the Wilshire Grand hotel. Korean Air, which is part of a huge South Korean conglomerate, had announced in 2009 a plan that was surprising in its scope and timing. Downtown, after all, wasn't exactly bustling with development activity. Well now comes word from the Downtown News that - are you sitting down - Korean Air needs financial help from the city. Specifically, it wants the same tax breaks that were given to developers of the Convention Center hotel and the stalled Grand Avenue project. First step will be for the city to study the project's financials.

Hotels in the city are taxed at a rate of 14% of their net revenue. This Transient Occupancy Tax, or bed tax, is considered a crucial revenue stream for the city's now beleaguered general fund. The city agreed to waive the bed tax for both the South Park and Grand Avenue buildings after their developers argued that their projects would not be financially feasible without the break. The Convention Center hotel waiver is for 25 years, saving developer Anschutz Entertainment Group at least $246 million on the $900 million hotel.

There have been signs that the South Koreans were getting itchy about their project. Last spring, the chairman of Korean Air said the city could be doing more to speed up things up. "We understand that balancing the city budget is a priority at this time," he said. "But your city leaders must not let today's challenges slow down tomorrow's gains." Right - just as long as the city forks over a subsidy to cover "tomorrow's gains." When the plan was first announced, developers had hoped to break ground next year and complete the project in 2014. That would seem pretty unlikely at this point - the old Wilshire Grand is still operating.