City Studying Disney-Related Improvements

With a final vote on a $1.4-billion Disney theme park less than a week away, the City Council on Tuesday began publicly scrutinizing a plan that commits the city to spending millions of dollars for public improvements to accommodate the park and a planned expansion of Anaheim Convention Center.

Councilmen Tom Tait and Bob Zemel tried in vain to delay next week’s final vote, saying the public should be given more time to review extensive financial documents released in recent days.

“I’m for the project, but I have some concerns about the financial agreement,” said Zemel, who wants the city to continue its negotiations with Disney. “I feel it’s being rushed to the council. All efforts should be going into negotiating the best deal for Anaheim. I would like this to be a 5-0 vote.”

A majority of the council, however, appears poised to approve the plan in its current form next Tuesday.

Mayor Tom Daly called it “a spectacular financial deal” and said the request for more time should have been made earlier.

“I’m ready to make a decision,” Daly said. “We have been negotiating all or parts of this agreement for five years now.”

City and Disney officials have been holding long negotiating sessions in recent weeks, working out the intricate details of a plan introduced in concept last summer.

In all, up to $546 million worth of improvements will be invested in the city’s tourism area. This includes improving streets, landscaping and utilities, and building a $90-million parking garage for both the new theme park and the expanded Convention Center.

The city plans to issue $395 million worth of bonds to finance much of the work. Increased revenue from hotel and sales taxes would pay off the bonds, according to city officials who are eager to allay worries about an extra burden on city taxpayers.

In case of a shortfall in revenue, Disney would guarantee the bond debt, agreeing to step in and pay investors if the city can’t, Deputy City Manager Tom Wood said.

The city will commit an additional $55 million for the improvements, and another $95 million would come from federal, state and regional sources, according to a financial report released this week.

Doug Moreland, vice president of development for Walt Disney Imagineering, said it is the city’s responsibility to make improvements to the tourist area, not Disney’s, even though the company will greatly benefit from them.

“The area is 40 years old, and the infrastructure needs to be replaced,” Moreland said. “It has always been the city’s obligation to replace the infrastructure. With the expansion, they will have a revenue-producing resort to pay for the improvements.”

One controversial aspect of the pending agreement is that it eliminates the city’s power to impose an admissions or parking tax on either Disneyland or the new theme park, Disney’s California Adventure, for at least 15 years after the new park opens.

The city historically has had the threat of such a tax in its back pocket to balance the scale of power in its frequent negotiations with Disney.

Zemel said he is not currently in favor of imposing an admissions tax on Disney’s new theme park but is concerned about “tying the hands” of future councils should revenue projections for the new theme park not hold up.

Moreland said the admissions tax figured heavily into Disney’s negotiations. He said one of Disney’s conditions in moving forward with the new project was the guarantee that they would be protected from such a tax.

Threatening the carefully crafted financial plan is a statewide anti-tax initiative on the November ballot sponsored by the Howard Jarvis Taxpayers Assn. The measure would require approval by voters, retroactively, of all the new taxes and tax increases implemented after January 1995. This would include the increase of 2 percentage points in the hotel bed tax passed last year and dedicated to the Convention Center expansion and tourism area improvements.

The council’s approval of environmental documents and financing and development agreements are the final hurdles before Disney can begin construction either late this year early next.

The new Disney development supersedes the $3-billion resort the company proposed for the same site five years ago but abandoned last year as too ambitious. It is expected to be completed by 2001.

The development includes a new theme park, a 750-room hotel and a 200,000-square-foot shopping, dining and entertainment complex called Disneyland Center.