The $2.05 billion Grand Avenue project cleared yet another hurdle Tuesday as a City Council panel signed off on diverting $66 million in local tax money for the project. With just one objection from the business community and assurances the money will not come from existing programs, the City Council’s Housing, Community and Economic Development Committee urged the full council to approve the project. “The funds the city hopes to invest and reinvest are generated by the project itself,” said Councilwoman Jan Perry, who has spearheaded the project for the city. “We are not taking money away from other projects. This is tax revenue that will be generated on the side and going back into the project.” Under the plan, the city would agree to allow the developer, The Related Cos., to retain the hotel bed tax for 20 years and the parking tax for 10 years. Chief Legislative Analyst Gerry Miller said two independent studies justify the investment, which he said will serve as a catalyst to build the project and is similar to investments made in Staples Center and the proposed l.a. live project hotel. But an attorney for the Bonaventure Hotel said there is concern that diverting the bed tax gives an unfair advantage to the new site over existing facilities. Attorney Chris Sutton said the Bonaventure is prepared to take legal action – including the possibility of qualifying a referendum on the issue – to challenge the use of the bed tax for the project. “We don’t believe there is a need for these subsidies for a luxury hotel,” Sutton said. The Bonaventure had also objected to waiving the bed tax for the l.a. live project and the Convention Center hotel. It later dropped its complaints after an agreement was negotiated to allow it to convert some of its rooms into condominiums. Perry said she had not met with Bonaventure officials and had no plans to. “They will do what they do and we will react to it,” she said. The final agreement is scheduled to be considered Feb. 13 by the full council and the county Board of Supervisors. In addition to the hotel and parking tax revenue, the plans call for the Community Redevelopment Agency to contribute $24 million and the county to contribute $4.6 million. The hallmark of the project will be construction of a 16-acre park to connect City Hall to the county Hall of Administration. But the key features will be a 50-story high-rise designed to have luxury condos and affordable housing along with commercial and retail development. Plans call for construction to begin later this year and to be completed in three phases by 2018. [email protected] (213) 978-0390160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!