ANAHEIM : Hotel’s Conversion Raises Bed Tax Issue

The owners of Peacock Suites two blocks from Disneyland want to convert the hotel into a vacation ownership resort, but first they must reach an agreement with the city on how to collect its bed tax.

The City Council tonight will discuss a proposal by City Hall lobbyist Frank Elfend, who represents hotel developers in the Disneyland area. Elfend, representing Shell Group Inc., has suggested that a flat fee of $10 a unit be paid weekly to the city to make up for the 15% hotel occupancy tax that the city now adds to guests’ bills at lodgings across the city.

But Finance Director William G. Sweeney has recommended that the council reject Elfend’s proposal, arguing that the $10 flat fee is not enough and could cost the city between $130,000 and $200,000 a year.

Sweeney and Deputy City Manager Tom Wood met with Elfend Monday to discuss the matter, but they reached no agreement, Sweeney said, nor did Elfend and his client explain how a flat fee would be collected.

“We haven’t arrived at a mutually acceptable solution yet,” Sweeney said. “But we are still talking with them.”

Sweeney said the proposal would break new ground in Anaheim, where there are no vacation ownership resorts now.

Elfend said Monday, “We’re both trying to be fair with each other. We are hopeful that we can resolve this matter prior to the council meeting.”

The city’s hotel bed tax was raised to 15% last month, making it the third-highest in the nation. The increase, two percentage points, was approved to help pay for a $172-million revitalization of the Disneyland area.