"I Love L.A.," Randy Newman's popular ode to the City of Angels. The singer is not the only person in love. So too is Yang-ho Cho, chairman of South Korea's Hanjin Group, a conglomerate with $36 billion in assets among its 23 subsidiaries, including Korean Air Lines Co.
And as the Los Angeles Times reports, Cho is making a big bet on downtown Los Angeles, as his group is heading the development of what is reported to be the tallest building west of the Mississippi, a $1-billion downtown hotel complex, which will include the the 73-story, 900-story Wilshire Grand Hotel.
Back in October 2012, Hotel Management reported on the project. That's when the current iteration of the Wilshire was in the process of being de-constructed.
The new Wilshire Grand Hotel is estimated to provide 11,500 new jobs, though 1,750 of those jobs will be permanent once construction is over in 2017. Los Angeles is expected to receive $16 million annually in tax revenue once the Wilshire Grand Hotel is up and running in 2017 and $80 million in tax revenue during construction.
The development makes sense, financially. Korean Air is the third most popular foreign airline at Los Angeles International Airport and the fourth largest cargo carrier at Los Angeles International Airport, the Los Angeles Times reports.
Also, Hanjin Shipping Co., another subsidiary, is the largest container shipping line at the port of Long Beach, the nation's second busiest port behind the port of Los Angeles.
"No one has been more important to building a relationship between Korea and Southern California than Chairman Cho," Bill Allen, president and CEO of the Los Angeles County Economic Development Corp., told the paper.
However, the new hotel project comes at a difficult time for the Hanjin. Heavy losses at its shipping company prompted Korean Air to loan Hanjin Shipping about $141 million to ease the company's liquidity shortfall.
Cho, however, is not worried, telling the Los Angeles Times: "I have a vision that the U.S. economy will improve and this is the best time to invest."
L.A.'s hotel market continues to grow. Downtown Los Angeles has emerged as a vibrant, true city-center hotel market, driven by the growing critical mass of L.A. Live venues and the number of hotel rooms allowing group convention demand into L.A., John Strauss, managing director of Jones Lang LaSalle's Hotels & Hospitality Group, told GlobeSt.com.
The strength of the market is expected to increase on the west side of the city, in areas such as Beverly Hills, Santa Monica, West Hollywood and Westwood, as well as Hollywood, he said.
At least 11 downtown Los Angeles hotels totaling almost 5,500 rooms will have been built or extensively renovated between 2010 and 2017. The downtown’s inventory, which stands at about 5,000 hotel rooms, is slated to jump about 40 percent within the next four years.