The Disneyland Resort has put their plans for a new luxury hotel on hold after issues were raised regarding a $267-million tax break from the city of Anaheim.
Back in October, Disney announced new plans for their AAA Four-Diamond property to be built on the west end of Downtown Disney, which was a change from their original plans submitted to the city more than a year prior.
When Disney originally announced a new hotel back in June 2016, it was to go on part of the existing Downtown Disney parking lot. The original plans were submitted during a time when the city was giving significant tax breaks to builders of Four-Diamond properties, with 70% of the occupancy tax being returned for up to 20 years.
Since then, the Anaheim City Council has eliminated the tax breaks, except for projects that were already approved. With the change in the location of the new hotel, the city is now claiming that Disney would not qualify for the tax subsidy.
In a letter to the Disneyland Resort, City Attorney Robert Fabela stated the city’s position:
“Because this proposed site is inconsistent with the site intended in the agreement, it is the city’s position that Disney would not be entitled to the tax rebate were it to move forward under its current hotel construction plan.”
David Ontko, chief counsel for the Disneyland Resort responded today:
“You have given us no other choice than to put construction of the hotel on indefinite hold as the resort reevaluates the economic viability of future hotel development in Anaheim.”
Mayor Tom Tait, who opposes the subsidies, feels that Disney should build the project with their own money.
Councilwoman Kris Murray, feels that the issue is political, not legal, and the dispute could be ended by amending the previous ordinance. The current makeup of the council, however, would likely not support such an amendment.
Disneyland has closed several businesses in Downtown Disney, but has not broken ground on the new hotel, so the conflict with the city could put in jeopardy the 2021 scheduled opening date.
Source: Los Angeles Times