Business & Economy

Disney to Anaheim: We'll invest $1B for no new taxes for 30 years

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The "World of Color" water show at Disney's California Adventure.
Susan Valot/KPCC

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The Anaheim city council will consider a proposal Tuesday that would keep the city from taxing Disneyland Resort for the next 30 years in exchange for the company’s promise to invest $1 billion to expand its Anaheim amusement parks and improve surrounding streets.

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

“Anaheim has been an economic success story thanks to its policies and initiatives that allow businesses to invest and thrive,”  Disneyland Resort President Michael Colglazier said in a statement.

Disney approached city officials and council members in June about the proposal, according to a Disneyland Resort spokesperson.

Although Disneyland Resort officials say a third park is not in the works, the company has space within its property to expand Disneyland and California Adventure. Disney has the rights to Lucasfilm, Marvel Entertainment, Inc., and Pixar.

The proposal comes with a promise to 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.

Disney also wants an option to extend the entertainment tax moratorium for an additional 15 years if it invests another $500 million in its attractions.

Taxing Disneyland has been a long debated topic in Anaheim. Although it’s officially called an entertainment tax, locals have long called it the "gate tax" debate.

"What's the rush?" asked Anaheim resident Jose Moreno, who unsuccessfully ran for city council last year. "City officials knew about this deal for a month and we get 10 days to explore it."

Moreno believes Disney’s anti-entertainment tax is directly tied to the city’s redistricting process. He's one of three Latinos who sued the city in 2012 to force it to change how it elects council members from an at large system to districts. The first district-based elections will be in Nov. 2016.

Moreno said district-based elections could drastically change the city council, community representation at city hall and the council's relationship with Disney.

"More people will be able to say, 'How does that benefit our part of the city?'" he said.

In April, Anaheim's city council placed a measure on the Nov. 2016 ballot asking voters whether a two-thirds city council vote should be required to impose any new tax. Disney officials and the city councilwoman who proposed the ballot measure have said that the two initiatives are not related.

The resort area, which includes hotels and the convention center, provides more than half of Anaheim's general fund revenue - $148 million in sales, property and business taxes, according to a city news release.

Disney raised its theme park ticket prices in February. A one-day ticket for either Disneyland or California Adventure is $99 for customers ages 10 and up; a $3 increase. Tickets for Disney World's Magic Kingdom in Florida are more than $100.

None of Disney's theme parks around the world have to pay a local gate or entertainment tax. 

The Anaheim City Council is expected to take public testimony before voting on the proposal Tuesday.