How the Hotel Sausage Got Made

CaliforniaWatch has a story on the UCLA hotel project that recently passed the Regents.  It notes problems that this blog has pointed out:

“(Chancellor) Block noted in his presentation that the hotel and conference center would serve not only academic conference attendees, but also donors, parents and alumni coming to UCLA for activities ‘in furtherance of UCLA’s educational mission.’ But critics have noted that the Internal Revenue Service has treated alumni, for example, as members of the general public, suggesting that the university could be exposed to the unrelated business income tax. According to ‘The Tax Law of Colleges and Universities’ by Bertrand M. Harding, the IRS made this ruling clear when it considered income from alumni use of a university’s recreational golf course as unrelated to an educational purpose. An attorney from McKenna Long & Aldridge, a law firm representing the neighborhood group Save Westwood Village, noted the same IRS ruling at the regents meeting and in a letter to UCLA.”

[There then follows some pithy quotes from yours truly in the article - which modesty forces me to omit - but which point out that if you don’t fill the 250 rooms, you can’t make money and that it is costless for local hotel owners – who oppose the project – to complain to the tax authorities if transgressions in occupancy occur.]

So why did the Regents approve the project financing in July, after they originally refused to do so in March?  How did the sausage get made?

“Since (March), Regent Hadi Makarechian said, members of the (Buildings & Grounds) committee participated in three or four conference calls and a number of meetings and corresponded back and forth with UCLA officials to get answers to their questions. Importantly, UCLA secured a July 3 letter to the regents from the Luskins stating their desire to have the project on campus.”

CaliforniaWatch obtained a copy of the letter from UCLA.  One paragraph is redacted.  It is carefully crafted – masterfully written! - to close off any option to the Regents other than walking away from $50 million.  One sentence is particularly interesting:

“From the outset of our discussion with UCLA, we were focused on the development of a residential conference center on the UCLA core campus.”

Read that sentence carefully and you will see it does not quite say – as it might seem - that the Luskins originated the proposal.  It says they “were focused” on it.  Who focused them?  In fact, UCLA has never denied doing the focusing “from the outset.”  Indeed, as our post on the July Regents session noted, President Yudof was careful not to claim that the Luskins originated the hotel idea.  He said instead that they now wanted it as proposed to the Regents but that he didn’t know about the history. 

The full CaliforniaWatch article is at http://californiawatch.org/print/17171.  It is also at:

http://www.baycitizen.org/education/story/ucla-hotel-plan-moves-forward-despite/print/

The redacted letter can be read at:

Open publication - Free publishing - More ucla

No explanation is provided for UCLA’s redaction in the article.

Update: The conservative aggregator website Flashreport lists the article above and refers to UCLA going into the "hotel business." Below is a screenshot from the Flashreport website:

(And everyone, including the Regents, refers to the facility as a "hotel.")