Anaheim approves 30-year tax exemption deal for Disney

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Anaheim has promised Disneyland Resort it will not impose an entertainment tax on the theme park and hotel for the next 30 years in exchange for the company’s $1 billion investment in its theme parks and the surrounding streets. 

After a marathon public hearing Tuesday that ended after midnight, the Anaheim City Council voted 3-2 to approve the deal.  Jordan Brandman, Lucille Kring and Kris Murray voted in favor, while Mayor Tom Tait and James Vanderbilt voted no. 

Disney has had a no-entertainment tax deal with Anaheim since 1996; that agreement ends in June 2016.

"We’re not talking about exempting a business from a tax," said Murray. "We’re talking about  exempting our residents and our visitors from an additional tax."

Murray said an entertainment tax, if imposed, would apply to other venues such as Angels Stadium and the Honda Center.

As part of the agreement, Disney promises to invest $1 billion to expand Disneyland and California Adventure, build a 5,000-space parking lot and improve surrounding streets to make traffic around the resort area flow better. The work would need to be completed by 2024.

The agreement would extend the tax deal an additional 15 years if Disney spends another $500 million. 

Disneyland Resort President Michael Colglazier shared the following statement with KPCC after the vote:

"We applaud Anaheim's leaders for their continued foresight in ensuring the city remains a vibrant tourism destination by extending a proven policy that has created two decades of unprecedented economic and job growth. We are excited about what the future holds for Anaheim and the Disneyland Resort as we work together to ensure our city continues to thrive and grow."

A half hour before the council meeting began, people were lined up outside Anaheim City Hall waiting to get inside. Extra seating was set up in the lobby.

In the overflow room, construction workers from Laborers’ union Local 652 Orange County held signs that said, “Jobs, Jobs, Jobs.”

"It is about jobs," said union officer Mark Hernandez. "It’s about making sure local people in Orange County can stay in Orange County."

A city-commissioned report by Beacon Economics estimated that 10,206 construction jobs would be created in the first phase of Disneyland Resort’s expansion. Another 1,885 jobs would open up as part of "ongoing operations" in the first phase, according to the report.

But that didn’t sway Ana Lepe, who said she has worked at a Disneyland Resort hotel for about 15 years.

"Think hard about the agreement because only Disneyland will benefit," she told the council in Spanish. "With my salary, I don’t make much and it’s not fair that Disneyland will get to keep money."

More than 70 people signed up to speak during the public comment period. Several called on the council to vote no or postpone the vote.

A motion to continue the vote to another meeting failed.

More supported the agreement, including hotel managers and restaurant and taxi company owners.

"We love our conventions, and group business is so important to us, but we know the main reason people come to Anaheim is because of Disneyland," said Shaun Robinson, general manager of Hilton Anaheim and chairman of Visit Anaheim, a tourism and marketing group.

Anaheim interim Assistant City Manager Kristine Ridge said that since the 1996 deal exempting Disney from paying an admission tax, the amount of city revenue generated by hotel taxes has tripled from $44 million to a projected $133 million for the current fiscal year that began at the beginning of July.

"That is going to pay for the parks that you want,  and for [the] library hours increase that you want, the resource centers that you want," said Councilmember Kring to those who spoke during the meeting about investing more in neighborhoods.  

Anaheim resident John Gillespie urged the council to vote against the "lousy" deal because it would tie the hands of future city councils for so long. 

"If we hook up for a 30-year deal, they won’t have much of a choice."

The agreement requires Disney to put shovels in the ground in two years and be finished with the first phase of the expansion by 2024.

This story has been updated.

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