Anaheim Council Urged to Consider Hotel Tax Cutback

Because the Walt Disney Co. has decided against building a $3-billion resort next to Disneyland, City Councilman Lou Lopez said Monday that the council should consider rescinding a recent increase of 2 percentage points in the city’s hotel bed tax.

Lopez, elected to office after the increase was approved, has asked that the matter be brought up when the council meets tonight.

The tax increase is scheduled to go into effect in July and raises the levy to 15%, giving Anaheim the third-highest hotel bed tax in the nation. The increase was approved by the council last fall to help fund a $172-million revitalization of the city’s tourist area and a proposed $60-million expansion of Anaheim Convention Center, located across the street from Disneyland.

The overhaul of the city’s infrastructure was said to be vital to Disney’s proposal to build a world-class resort with thousands of new hotel rooms, a 5,000-seat amphitheater and a new theme park dubbed Westcot.

The company said last month that its original expansion plans will either be scaled back or built in increments. Disney officials, who were not available for comment Monday, plan to present the city with a revised plan within 90 days.

“I think Disney should let us know exactly what their alternative plans are before we move forward with the tax,” Lopez said. “Such a high tax could impact whether people stay at the hotels. We should rethink it. Do we really need it at this time?”

Lopez’s position is contrary to what the city’s has been since the revitalization plan, called Anaheim Resort, was approved by the council last fall. City officials have said the effort is needed regardless of what type of expansion Disney goes through with.

“We’re looking to have the area revitalized anyway,” said Councilman Bob Zemel. “When the tax increase was approved, no one knew what Disney was going to do. The business people feel this long-term investment is important with or without one piece of lumber put up by Disney.”

Former Councilman Bob D. Simpson, who is director of the Anaheim Area Hotel-Motel Assn., said the tax increase still has the support of the hotel industry.

“We support the tax not because it was supportive of Disney but because the area is desperately in need of refurbishing,” Simpson said. “We will still support it even if Disney downsizes. It is also our belief that the Convention Center needs to be expanded to keep pace with the industry.”

Last week, the City Council approved the hiring of one of the nation’s top six accounting firms to study the economic feasibility of expanding the city-owned Convention Center, already one of the largest of its kind in the nation.

Ned Snavely, general manager of the Anaheim Marriott hotel, said that the hotel bed tax and any Disney expansion are completely separate issues.

“The only way we can get the Convention Center done is to have more bed tax,” Snavely said. “(A high tax) is a risk, but provided the money goes back into the industry, it helps us maintain our credibility because it’s a reinvestment into the area.”

Snavely added, however, that the tax “can’t go any higher” than 15% and he would like to see it be lowered in the coming years. The city’s hotel bed tax has climbed 63% since 1983.

The Anaheim Resort plan is intended to eliminate urban blight around Disneyland over a five-year period by adding lush landscaping, burying overhead cables, widening streets and removing neon signs.

City staff members are in the process of finalizing an implementation plan for the Anaheim Resort. The plan would detail exactly when and how each stage will be completed and how it will be funded, and is expected to be completed later this month, officials said Monday.

So far, Lopez has been the only city official to publicly demand answers from Disney regarding its expansion plans.

“They should tell us what scaling-back will mean to us,” he said. “We want to work hand-in-hand with them and help, but we need to know what the pieces of the puzzle are. We, as city leaders, need to be able to explain this to our constituents.”

Lopez was also at odds with the entertainment giant during last fall’s council election when he supported the possibility of a Disneyland admissions tax to help pay for any extra public safety costs brought on by expansion.