The (Subsidized) Circus is Coming!
The City Council approves a loan (from federal government development funds) to bring Cirque du Soleil to Hollywood and Highland.
The vote was unanimous, as the L.A. Times' "L.A. Now" blog reports on the :
...$30-million loan to help finance upgrades that will allow the Kodak Theatre to host the troupe for 368 performances a year. The city owns the Kodak Theatre, which is operated by CIM Group. Officials plan to draw from a $350-million federal fund for economic development and job creation to make the project happen. Cirque du Soleil is contributing $50 million toward the $103.5-million project, and CIM Group will spend $20 million.
CIM promises 858 new jobs from the project; since it involves federal money, the loan can't go through without federal approval.
The Times also editorialized against the loan. Here are some of its reasons:
The city Community Development Department and CIM estimate that the project will generate 858 jobs. There is no adequate study that supports that number, but there is this not-so-amazing coincidence: The federal Department of Housing and Urban Development requires that one job be generated or saved for every $35,000 lent. Cirque and CIM need $30 million. Multiply 858 by $35,000 and you get $30.03 million....where are the studies demonstrating how quickly the city will recoup the HUD money that it would be unable to use on some worthier project backed by honest projections and studies? The city's feeble answer is that it doesn't have to be as responsible with federal money as its own.Proponents argue that the loan puts the city at little risk. But if CIM does default, perhaps because tourists get their fill of Cirque du Soleil in Las Vegas or Santa Monica (where a traveling troupe will appear this fall -- and again periodically over coming years, even if a permanent show moves forward in Hollywood), the city will be left with an interest in a shopping mall and a theater. Los Angeles has a poor track record of running commercial properties.
Ron Kaye is also wondering why the city is throwing good money after bad at the Kodak:
The Kodak Theater is a monument to the failure of city policies, a financial disaster that provides only a single moment of excitement a year, Oscar Night -- something that will almost certainly move to the Nokia Theater at LA Live if this sweetheart deal goes through....The city bestowed a $90 million direct subsidy to this project that cost $600 million to build but lost two-thirds of its value by 2003, just two years after it opened. Millions more was poured into it in parking and other subsidies.
Thanks to City of Angles, you can get the joy of Cirque du Soleil right on your computer monitor, no huge government loan required:
The image associated with this post was taken by Flickr user spcbrass. It was used under user Creative Commons license.