The Disneyland Resort last week canceled its plans to add another luxury hotel to its property. The decision, which was all but inevitable following months of toxic politics in Anaheim, is a loss for everyone in the community.
The city estimates that it will lose out on $1 billion in tax revenue over the next 40 years — money that would have funded much-needed city services including improving neighborhoods, protecting public safety, lowering emergency response times, maintaining infrastructure and assisting homeless persons. The city’s finance director told the City Council that the projected tax revenue from Disney’s project and others (now also imperiled) was crucial to balancing the budget starting in 2021. There is no Plan B.
How did things get this bad this fast?
All observers of Anaheim politics for the last few years know that the city’s former policy of incentivizing the construction of luxury hotels by offering 70% rebates on the room occupancy tax had become controversial. Heated rhetoric, even name-calling, became the norm at the biweekly City Council meetings. Still, it was a big shock when, after more than a year of planning and meetings, city officials notified Disney that because it had moved the location of its planned hotel about 1,000 feet on the property site, the company was no longer eligible for the tax rebate program. Lawyers began to debate, but when it became clear the city was not going to back down, Disney put planning for the hotel on hold.
A few weeks later, Disney and Anaheim tore up the tax rebate deals because of how divisive they had become, but the damage was done. Without the rebate, the investment required to build a four-diamond property stopped making clear economic sense. Disney shelved the project shortly thereafter.
At the Los Angeles/Orange Counties Building and Construction Trades Council, this cancellation hit very hard. We represent 15 trades covered by 48 local unions and district councils — more than 100,000 working people. Nearly 3,000 of them would have worked on that hotel, and they will miss out on a chance to ply their crafts on a project close to their homes. The Disney hotel was going to be built under a hard-fought-for project labor agreement, which gave construction preferences to Anaheim residents and veterans through our Helmets to Hardhats program. Instead, those middle-class jobs — the kind that are increasingly rare for workers without college degrees — have evaporated.
Meanwhile, UNITE-HERE Local 11 — which led the petition drive to put a minimum-wage measure on the Anaheim ballot, creating another political wrinkle — recently reached a deal with Disney to raise the pay for all of its members to $15 per hour, and in many cases higher. The bargaining table is where wages, benefits and working conditions should be negotiated — not the ballot box. Yet with the scrapping of this hotel, more than 1,000 permanent jobs that would have been covered by that hard-fought wage increase will never be created, and Local 11 will have 1,000 fewer members.
Disney, for its part, is losing out on a chance to amplify its other major investments in Anaheim. With the 14-acre Star Wars: A Galaxy’s Edge land under construction, a high-end hotel would have been a perfect compliment.
Anaheim may lose out most of all. Since Disney was attacked for pursuing a project that most communities would welcome, the city has been branded as a locality with challenging politics. Disney has said it may look elsewhere for future investments. The news this week that the Angels baseball team is also opting out of the final 10 years of its stadium lease in Anaheim underscores this point.
Could no one see this coming and head it off?
At the building trades, we believe in partnerships. When labor, business, government and community come together around a project, positive results follow. Government and elected leaders create an environment that attracts investment and that respects working people. Capital follows and the economic activity provides a wide range of jobs — from construction and entry-level jobs to salaried and management roles — that help residents provide for their families. The wages and tax revenue are invested back into the community, benefiting all.
This model was successful in Anaheim for decades. Then it fell victim to the local manifestation of the nation’s bitter political climate, in which groups set out to make sure their “enemy” loses a battle, instead of focusing on the big picture where everyone wins.
Disneyland Resort got a new president this year. The election on Nov. 6 will bring in new leadership to the city, including a mayor, so there’s an opportunity to change the tone at City Hall. This is a moment when all involved should look for opportunities to rebuild the partnerships that benefit Anaheim’s visitors, its residents and its workers.
Let’s hope that going forward Anaheim can put the politics of destruction behind it. When it comes to local economic development, no one wins by making the other side lose. We win only when we all win.