The problem is that the business plan doesn’t work without what appears
to be commercial business to fill the 250 hotel rooms planned. But such business is not permitted giving the
financing plans and in any case would be subject to federal and local
taxes. If the hotel doesn’t cover costs,
the subsidy it will need will be coming out of other campus resources –
although, as we have also noted, is likely to be hidden because of the blending
of this project with others.
Nonetheless, a cost is a cost, however hidden.
No Room for Tax-Free Hotel at UCLA
Laura Lake, co-president
of Save Westwood Village Inc., a business-community alliance to revitalize
Westwood, September 3, 2012
For years, UCLA has
operated hotels that compete with local hotels. The commercial hotels pay the
city’s 14 percent hotel tax and federal corporate income tax; UCLA’s do not. Now,
UCLA wants to expand its hospitality empire with a $162 million, seven-story,
250-room luxury inn, to be called the Luskin Hotel and Conference Center, and
eliminate 754 parking spaces adjacent to Pauley Pavilion. The proposed hotel
will charge $224 a night and, like other UCLA hotels, will neither pay the city
hotel tax nor comply with federal requirements for a tax-exempt enterprise. Generally,
rents from real estate property are excluded from federal “unrelated business
income tax.” But there is an important exception: When rental of real property
comes with personalized services such as maid or linen service, it is subject
to federal unrelated business income tax…
Full op ed at http://labusinessjournal.com/news/2012/sep/03/no-room-tax-free-hotel-ucla/. The op ed notes the issue of local taxes,
too.
The Regents and UCLA are gambling that no one will notice
and the tax man won’t come calling. If
he does, however, no one should be shocked.
No comments:
Post a Comment