Correction: The original version of this article contained an error. The $10 million used to construct a campus catering kitchen and to remodel Gateway Plaza is not coming from the Meyer and Renee Luskin donation.
The UC Board of Regents recently withheld approval of a proposed $152 million conference center and hotel to be built on the UCLA campus, a setback for a project that has been months in the making.
UCLA officials will now have to address a series of questions posed by the board last week at UC San Francisco with respect to the plan’s budget and practicality.
“This is a major project and it’s appropriate for the regents to have many questions,” Steven Olsen, UCLA vice chancellor of finance, budget and capital programs, said in an emailed statement. “We’ll be working to provide answers to them in the weeks and months ahead.”
The university had proposed to replace Parking Structure 6 with the UCLA Meyer and Renee Luskin Conference and Guest Center, which would include 250 guest rooms and 25,000 square feet of meeting space. Olsen and UCLA Chancellor Gene Block outlined the plans in a presentation to the regents at UC San Francisco on Thursday.
The UCLA officials received a skeptical response, however.
“In this day and age, nobody would build a hotel,” Regent Hadi Makarechian said. “Why are we taking on this responsibility?”
Regent Paul Wachter questioned the cost of the plan, and suggested it would be less expensive to purchase and renovate a local hotel in a surrounding area.
Olsen and Block said they will present an updated version of the plan in May. The board will make the final decision as far as whether or not the project will be approved.
“I am disappointed that (the discussion) did not go more smoothly,” Block said after the meeting.
Funding for the center would come from a $40 million donation from alumni Meyer and Renee Luskin, and $112 million in bonds.
An additional $10 million would be used to construct a campus catering kitchen and remodel Gateway Plaza, which is adjacent to the site, according to a UCLA Academic Senate council report.
No money from tuition will be used to finance the project.
The building was first proposed last year as an alternative to a proposal to build on the current location of the Faculty Center.
The UCLA Academic Senate reviewed the project and deemed it poorly designed, said chair Andrew Leuchter. A renovated budget plan, new location and downsize of the project led the Academic Senate to change its opinion, Leuchter said.
In a recent review, the Academic Senate confirmed its support of the project. Its council on planning and budget determined that the hotel’s financial plan was solid and that the building would benefit the community. Local hotels can cost upwards of $300 a night, according to a study conducted by the Academic Senate.
While $750,000 in annual revenue is expected to be lost with the demolition of Lot 6, the hotel is expected to bring more than $1 million annually, Olsen said in the meeting. The hotel is expected to be financially self-sustaining in a few years, with an average 70 percent occupancy, UCLA officials said.
Local hotels have also expressed concern about the center, citing a potential loss in business to the proposed hotel.
Because it would be located on public university property, the hotel would be exempt from various taxes, which would give them an edge in attracting guests, said Bob Amano, executive director of the Hotel Association of Los Angeles.
“We are not against the development but we want to be on a fair, professional and competitive level,” Amano said.
Ultimately, he said he thinks the city will suffer because of reduced tax revenue and lost foot traffic in Westwood Village, which could harm local business.
Leuchter said the conference center would not pose direct competition to Westwood hotels because it only houses guests with an academic purpose at UCLA.
The university’s business plan does not show that it will only serve these guests, Amano said.
Amano said he suggests building the conference center without the guest accommodations, while putting the remaining funds into upgrading the faculty center.
Contributing reports by Andra Lim, Bruin senior staff.