Advertisement

Anaheim officially puts an end to tax breaks for Disneyland Resort

Anaheim officially puts an end to tax breaks for Disneyland Resort
A luxury hotel that the Disneyland Resort planned to build with a tax break from the city of Anaheim was put on hold because city officials said the hotel no longer qualifies for the tax relief after the resort changed the hotel's location. Disney now wants to end the tax deals. (Walt Disney Co.)

The Anaheim City Council voted Tuesday to end agreements that offer the Disneyland Resort tax breaks for investing in its theme parks and an adjacent shopping district, a move requested by theme park owner Walt Disney Co.

After sometimes heated debate, the council voted unanimously to end the incentive deals, which were designed to encourage Disney to build a 700-room luxury hotel at the resort and to invest in multimillion-dollar expansions at Disneyland and Disney California Adventure Park.

Advertisement

Mayor Tom Tait said he was “very surprised” by Disney’s request, but added that he is optimistic that the move will be a “rare opportunity to push the reset button” with the city’s biggest employer.

But Councilwoman Lucille Kring said the end of the subsidies will mean that dozens of construction jobs to build the luxury hotel that is now on hold will be lost.

“For the city, it’s sad,” she said.

The meeting drew about 60 Disneyland workers, including several housekeepers and bakers, who called on the resort to pay its workers a living wage, regardless of whether the company gets a city tax break.

“How much is enough for them to make before they share it with the people who make the magic?” Julieta Briceno, who has worked as a housekeeper at the resort for 10 years, asked the council.

Maria Ortiz, a housekeeper at the resort for 13 years, said she is upset that working at the resort has not pulled her out of poverty.

“One day my son asked me ‘If you work at the Happiest Place on Earth, why do you always come home frustrated?’ ” she said.

Disneyland Resort President Josh D’Amaro requested that the city end the agreements in a letter to Anaheim officials last week, saying the deals have “created an adversarial climate where there should be cooperation and goodwill.”

D’Amaro may have been referring to the election in the last two years of City Council members who have increasingly questioned the subsidies, incentives, rebates and protections from future taxes awarded by Anaheim over the last two decades.

Disney critics say they believe the resort has ulterior motives: By eliminating certain tax agreements, Disney may be ensuring that it isn’t affected by a Nov. 6 ballot measure that, if passed, would require the resort to pay all its workers a living wage.

The measure, which was added to the ballot after unions representing resort workers collected enough signatures, would require large hospitality businesses that accept a city tax subsidy to pay workers a minimum of $15 an hour, with a $1 hourly increase each Jan. 1 until 2022. Once the wage reaches $18 an hour, annual raises would be tied to the cost of living.

The measure was drafted to target the Disneyland Resort and its 30,000 employees.

Disneyland representatives point out that the resort has secured a contract with four of its largest unions — representing 9,700 workers — to raise hourly wages by as much as 20% immediately and an additional 13% in January.

The Disneyland Resort benefits from two tax agreements that were approved by Anaheim in the last few years.

Advertisement

One prohibits the city from adopting an entertainment tax on the price of admission in exchange for the resort’s promise to invest at least $1 billion by 2024.

Disney officials note that the Star Wars: Galaxy’s Edge expansion, scheduled to open next year at a cost of $1 billion, meets the resort’s obligation under that 2015 deal. Disney California Adventure Park has announced plans for another expansion, featuring the superheroes of Marvel comics and movies.

The second tax benefit, adopted in 2016, would give the resort a $267-million rebate on the city’s hotel tax if Disney builds a luxury hotel. The Disneyland Resort drew up plans to build the hotel, which was set to open in 2021, but learned this month that, according to the Anaheim city attorney, the hotel doesn’t qualify for the break because Disney moved the location of the project after the deal was reached.

Disney representatives have put the hotel plan on hold, even though the plans to build the hotel forced the closure of several businesses in the Downtown Disney shopping district.

Advertisement
Advertisement