Disney

Disneyland Asking for Largest Hotel Tax Subsidy in Anaheim History

Voice of OC
06/09/16

Disneyland Asking for Largest Hotel Tax Subsidy in Anaheim History
By Adam Elmahrek

http://voiceofoc.org/2016/06/disneylands-recent-hotel-tax-subsidy-request-is-largest-in-anaheim-history/#

 

When Disneyland officials unveiled plans this week for a massive new luxury hotel in Anaheim, they also applied for a room-tax subsidy worth well over $200 million, which would be the largest hotel tax subsidy in the city’s history.

The proposal calls for a 700-room, 900,000 sq. ft. hotel to be built on a parking lot adjacent to the resort. It would include upscale rooftop dining, two swimming pools with food and beverage service, multiple spas, 24-hr. bell and valet services and a fitness center, among other amenities.

The mega resort’s subsidy request was made under the city’s hotel development incentive program, which allows developers to collect 70 percent of the room taxes generated over 20 years by luxury hotels. To qualify, the hotel must be built to standards that would earn a four-diamond rating from AAA…

 

…City leaders contend such deals are needed because Anaheim is lacking in luxury hotel rooms needed to attract upscale clientele for events at the convention center.

But Alan Reay, president of Irvine-based Atlas Hospitality Group, says such arguments are dubious. Wealthy convention goers won’t be sticking around Anaheim, they’ll be going to places like the Montage Laguna Beach because of its beachside location.

“I don’t care how good a quality hotel you have in Anaheim, you can’t compete with the beach,” Reay said. “It’s a great deal for the developer… I don’t know that it’s a great deal for the city.”

Reay said that city leaders need to consider the amount of tax revenue they would be losing by inking such a deal, and says that the luxury hotels will be taking visitors away from three-star hotels that pay their full freight in taxes.

“Not only am I taking money away from a competing hotel, I’m taking money away from the city,” Reay said.

Reay also speculated that Disneyland was likely to be planning to build the hotel with or without the tax subsidy, and decided to ask for the subsidy now because council elections in November could produce a new council majority that is against hotel subsidies.

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