It costs big bucks to bring a luxury hotel to the 90210 zip code.
French retailer LVMH will have to pay the city of Beverly Hills at least $28 million in public benefit fees to build its Cheval Blanc hotel on Rodeo Drive, according to a development agreement revealed at a City Council meeting on Tuesday. The council approved the deal in a 5-1 vote, with councilmember John Mirisch voting against the deal.
Under the agreement, LVMH must pay $26 million in public benefit fees within 30 days of the City Council issuing final approval of the project or when a building permit is issued — whichever comes earlier.
In addition, LVMH must pay $2 million that will go towards arts and culture purposes, though the city did not further describe what that entails.
The nine-story, 109-key hotel is set to rise at 468 Rodeo Drive, a property formerly occupied by Brooks Brothers. The Beverly Hills City Council unanimously approved the plans for the building in September, pending an approved development agreement.
“It’s becoming for Beverly Hills to become its new home,” Councilmember Sharona Nazarian said at the Tuesday meeting. “I see both monetary and non-monetary benefits for the city from this development agreement.”
The development is set to be a revenue windfall for the city, according to fiscal analyses conducted by both LVMH and the city.
Over 30 years, the project is expected to generate at least $725 million in general revenues — more than $500 million of which will come from transient occupancy taxes and municipal surcharges.
“It’s a staggering amount of money,” Beverly Hills Vice Mayor Julian Gold said at the Tuesday meeting. “There are cities where that is their general fund.”
Under the agreement, guests will have to pay an additional 5 percent municipal surcharge per night — in addition to a 14 percent transient occupancy tax the city already charges hotel guests.
“I support the idea of an LVMH hotel,” said Mirisch. “But the devil is always in the details.”
Mirisch, the only councilmember to vote against the agreement, said he thinks the proposed hotel is too tall, and that the city should have charged LVMH more.
“Don’t be concerned about LVMH’s finances,” he said. “They’re doing quite well.”
Beverly Hills is known for charging millions through development agreements. Beny Alagem and Cain International, the developers behind the $2 billion, mixed-use development One Beverly Hills, will pay the city $100 million in public benefit fees over the next eight years.
That agreement also included the same 5 percent municipal surcharge on luxury hotel rooms at the new Wilshire hotel at One Beverly Hills — set to be an Aman hotel — and the Beverly Hilton.
The post How much will LVMH pay Beverly Hills to build a hotel? appeared first on The Real Deal Los Angeles.
Powered by WPeMatico