The Disneyland Resort has asked the City of Anaheim to dissolve two economic development agreements between Disney and the city — one week after the resort announced it was halting plans for a new luxury hotel due to a dispute with the city.
UPDATE (8/29/18):
- According to the Los Angeles Times, the Anaheim City Council met yesterday and voted unanimously to end both the “bed tax” and “gate tax” incentives that Disney receives for investing in its parks and resorts. A request to end the incentives came from Disneyland Resort President Josh D’Amaro.
- It’s still unclear if this move will exempt Disney from the minimum wage proposal being voted on this November or how it could effect the 4th hotel project that has been on hold.
Previously:
- The Disneyland Resort currently has two agreements with the city of Anaheim involving taxes. These are:
- A rebate for part of the “bed tax” paid at a new four-diamond hotel that Disney was planning on building in its original location
- An agreement to not charge guests a “gate tax” for 30 years in exchange for Disney investing $1 billion in new projects at the Disneyland Resort
- Now Disneyland President Josh D’Amaro has reportedly sent a letter to the city suggesting these deals be done away with, citing their “divisive” nature in Anaheim.
- This comes just a few months before a ballot initiative which would raise the minimum wage for companies that receive economic assistance from the city of Anaheim is voted on.
- It is unclear whether canceling these two proposals would mean that the Disneyland Resort would no longer be subject to the measure if it passes.
Part of the Letter from Josh’ D’Amaro to the City:
“We believe the practice of utilizing tax incentives to encourage business investment was, and continues to be, an effective approach and sound public policy to create jobs, increase economic activity, and generate significant taxes and other fiscal benefits to the community. In fact, cities around the nation have implemented similar incentive policies with great success. However, unfortunately in Anaheim these policies have become divisive, leading to an unstable business climate and a difficult working relationship with the City.”
What this means for Disney fans
- Regardless of what happens with these deals, Disneyland will continue work on Star Wars: Galaxy’s Edge and Marvel experiences
- However, the four hotel remains on hold
- Beyond that, it is unknown what level of investment Disney will make at the Disneyland Resort
- Additionally, were both agreements to be dissolved, the city of Anaheim could impose a “gate tax” on Disneyland guests if it votes to do so.
- Of note: Walt Disney World ticket prices are currently subjected to taxes while Disneyland tickets are not.
Catch up quick — The Subsidy Saga
- The City of Anaheim passed an incentive measure to encourage the building of four-diamond hotels in Anaheim as it was thought that it would attract a higher level of spending as most high-level hotels were being built in nearby Garden Grove
- Three hotels applied for and were given the subsidy, including one hotel being built by Disney
- The Disneyland Resort moved the proposed hotel 1,000 feet due to challenges getting approval for their Eastern Gateway project and the need for additional parking
- The city of Anaheim informed the Disneyland Resort that the hotel at the new address would not qualify for the subsidy
- The Disneyland Resort subsequently halted development of the hotel after closing parts of Downtown Disney in preparation for construction