EDITORIAL COLD FEET EVEN A MASSIVE PUBLIC SUBSIDY ISN'T ENOUGH FOR THE CONVENTION CENTER HOTEL TO PENCIL OUT.

WHAT do the folks at Apollo Real Estate Advisers know that Los Angeles city leaders don't?

Apollo officials have gotten cold feet about sinking $60 million into the construction of a new Convention Center hotel in downtown Los Angeles, and have withdrawn from negotiations.

But city leaders, on the other hand, have happily committed $270 million in public subsidies to the same project.

Clearly Apollo's officials are reluctant to gamble their own money on such a questionable venture as part of the massive ``l.a. live'' entertainment, sports condominium complex near Staples Center and the Convention Center. City leaders, however, aren't cautious - after all, it's only taxpayers' money they're playing with.

Apollo's exit from the deal suggests that city leaders haven't done their due diligence. They bought into a vision that seems increasingly untenable.

So what was once billed as a done deal now waits in limbo. The hotel project will go through only if AEG, developers of the adjoining l.a. live complex, can find someone else willing to shoulder what was supposed to be Apollo's $60 million investment.

Meanwhile, taxpayers have all the more reason to question their city leaders' economic vision.

All along, the rationale for a Convention Center hotel subsidy has been dubious. If the hotel were the winner that its backers say it is, it wouldn't need a subsidy at all. Private businesses would readily pick up the bill in anticipation of huge profits, just as AEG is gladly putting up $1 billion for its potentially lucrative project.

But there's a reason why private companies have been skeptical of the Convention Center hotel, and that's the Convention Center itself. For years, this white elephant has been a drain on the public treasury, losing $1 million a year just in operating costs, plus $30 million in annual debt financing for the initial construction.

Why throw good money after bad?

The nationwide convention market is simply over-saturated, and downtown L.A. faces tough competition from nearby locations that offer better attractions for conventioneers, such as Las Vegas and Anaheim. And while the new l.a. live complex will no doubt make Los Angeles a more desirable convention site, will it be enough to fill a brand new, 56-story, 1,100-room hotel?

Apparently Apollo didn't think so. Not even the promise of a $270 million subsidy was enough to make the company's officials confident in the project. That ought to give all Angelenos cold feet - especially the city's elected leaders.