New Luxury Disneyland Hotel put on hold

[iMadHatter]

Changing the site really underlines the whole unplanned vibe this project has going. I can totally understand why the city government is being a stickler. What I would wish (it's nice to dream, right?) is that Disney would take this as a time to start over with the design. What ever happened to master planning? What is the long-term vision for that end of DTD? The whole thing is just a mess.

 

[Dean Marino]

So what are the odds you live in Texas?

Nope - Michigan .

 

[writerguyfl]

Just a suggestion to look into funding of major sports stadiums, large department stores, Amazon HQ East, casino deals, etc. The giving away of the public till is widespread and common. The justification appears to be the income from personal income tax of the new hires justifies the loss of property tax for a specific time frame. Florida Marlins in Miami comes to mind as an egregious example of tax incentives that allows a private business to keep parking and seat revenue as part of the deal to build.

Just because something is widespread and common doesn't mean it's appropriate.

I'm well-versed in these types of tax incentives because they tangentially relate to my dissertation topic. Although I'd have to look at the details, I'm guessing I'd come down on the con side of every project that receives them. (I'd definitely oppose any sport franchise from getting public money.)

Then why would the city offer the tax break to begin with? Anaheim is the one who came out and offered it to get a new luxury hotel in the area. Disney wanted to take advantage of that and then Anaheim said nope not anymore.

As I believe someone else noted, tax incentive was available to any company that wanted to build a new luxury property.

As to why Disney's altered project no longer gets the incentive, it might be political or it could be economics. If the City of Anaheim believes that the market has changed, it might not make sense to give away taxpayer money if they believe the project will still get built. Or, they have feel that the other project that were approved and not altered without consent are adequate to meet the need for luxury rooms in the city.

My bet is that it's a mixture of politics and economics.

When they moved the location, they laid off 400 employees in the locations they closed, for a net gain of only 700 ish new jobs. This is a significant change from the original agreement and I totally understand Anaheim city officials being upset and rescinding the offer. The terms have changed, and Disney did not seek an amendment to the agreement prior to announcing the location change. Honestly, Disney shot themselves in the foot here and they are the ones who need to be flexible and be willing to compromise with whatever Anaheim decides is acceptable.

This times 1,000. The fact that Disney completely altered the approved project and thought they didn't need to consult the City of Anaheim in regards to the tax-incentive is either an example of Disney's hubris or a complete failure of one or more departments to ensure compliance to the terms of the agreement.

It's really not rocket science. If Disney wanted to keep the tax-incentive, they shouldn't have altered their project without approval.

 

[rteetz]

As I believe someone else noted, tax incentive was available to any company that wanted to build a new luxury property.

As to why Disney's altered project no longer gets the incentive, it might be political or it could be economics. If the City of Anaheim believes that the market has changed, it might not make sense to give away taxpayer money if they believe the project will still get built. Or, they have feel that the other project that were approved and not altered without consent are adequate to meet the need for luxury rooms in the city.

My bet is that it's a mixture of politics and economics.

I think it’s more politics than anything...

 

[middlechild]

Thanks @writerguyfl for the comments. Agreed on all your points. Tax rebate incentive programs to me simply prove that taxes are too high, and a barrier to new businesses. In this particular case, however, the article does specify that Disney worked with city departments for 8 months preceding the letter. We don't know what those conversations entailed, or if they involved modifying the permit. I could believe two city departments being inconsistent with requirements to change the agreement, or just like you said the hubris of Disney assuming the move was no big deal.

 

[rteetz]

Surprise move by Disney

https://www.ocweekly.com/disneyland...million-hotel-subsidy-and-gate-tax-exemption/

 

[jknezek]

Surprise move by Disney

https://www.ocweekly.com/disneyland...million-hotel-subsidy-and-gate-tax-exemption/

And here's the key passage, buried in the story...

"With a living wage measure on the November ballot for subsidized corporations in the Anaheim Resort, Disney’s move could potentially exempt them from increasing pay to $18 an hour by 2022 under its wage scale provisions. “It’s conceivable that if Disney does not a have hotel incentive or entertainment tax agreement, those provisions of the initiative could not apply to them,” Mike Lyster, city spokesman, writes in a statement. “But we do not have a definitive legal determination at this time.”"

 

[rteetz]

And here's the key passage, buried in the story...

"With a living wage measure on the November ballot for subsidized corporations in the Anaheim Resort, Disney’s move could potentially exempt them from increasing pay to $18 an hour by 2022 under its wage scale provisions. “It’s conceivable that if Disney does not a have hotel incentive or entertainment tax agreement, those provisions of the initiative could not apply to them,” Mike Lyster, city spokesman, writes in a statement. “But we do not have a definitive legal determination at this time.”"

Yep, get rid of the tax exemptions so they don’t have to pay the increased wages.

 

[jknezek]

Yep, get rid of the tax exemptions so they don’t have to pay the increased wages.

I don't think there is anything the Disney Parks division fears more, right now, than not having control over their labor costs. Giving up control to a state controlled living wage is something to be avoided at all costs, and here you see them working to accept some of those costs and spin up some good publicity while doing it.

 

[middlechild]

By exempting themselves from the "living wage" measure for the 23,000 daily employees times the three extra dollars per hour worked times the typical work day, say 6, and you have about $400K per day in extra wages. Yearly that saves $140 Million, by not paying the extra wages.

I admit this is not scientific, merely my own conjecture. And @jknezek is spot on, not having control over labor costs is huge.

Yep, Disneyland comes out ahead by escaping from the "living wage" requirement, hands the Mayor a coupe de grace, about how he "beat" Disney, city council all proclaims a win. But workers lose yet again.

 

[rowrbazzle]

Just because something is widespread and common doesn't mean it's appropriate.

I'm well-versed in these types of tax incentives because they tangentially relate to my dissertation topic. Although I'd have to look at the details, I'm guessing I'd come down on the con side of every project that receives them. (I'd definitely oppose any sport franchise from getting public money.)...

Any good papers or articles you can recommend on the topic? I feel like I've read some a few years ago, but I'm having trouble finding anything now. (All the results are just about Trump's tax plan.)

 

[pkrieger2287]

Yep, get rid of the tax exemptions so they don’t have to pay the increased wages.

Is the assumption that if this goes through they will move forward with the planned hotel, or do you think they will fully reconsider what they want the new property to be now that there are no restrictions making it be a certain quality, diamond, etc?

 

[HopperFan]

And here's the key passage, buried in the story...

"With a living wage measure on the November ballot for subsidized corporations in the Anaheim Resort, Disney’s move could potentially exempt them from increasing pay to $18 an hour by 2022 under its wage scale provisions. “It’s conceivable that if Disney does not a have hotel incentive or entertainment tax agreement, those provisions of the initiative could not apply to them,” Mike Lyster, city spokesman, writes in a statement. “But we do not have a definitive legal determination at this time.”"

Been talking about this for days in our house. This is the conclusion we came to. There is likely method in their madness, and this is more than what is on the surface. All these moves Disney has made on the game board have simply lined them up to get what they want in the end.

 

[rteetz]

Is the assumption that if this goes through they will move forward with the planned hotel, or do you think they will fully reconsider what they want the new property to be now that there are no restrictions making it be a certain quality, diamond, etc?

I think in the end they will still build the hotel.

 

[BrianL]

I think in the end they will still build the hotel.

They're going to have to build something at any rate. They already tossed out all those businesses. Even if it's just a massive overhaul of the area with new tenants brought in, they can't really leave that section as just nothing. I agree that they will probably still build the hotel, though they may alter the design a bit.

 

[rteetz]

Anaheim Vote Cancels $267 Million in Disney Hotel Subsidies

Now the question is what will happen to the abandoned portion of Downtown Disney? Will a hotel still get built?

Is Disney going to wait and see if the November elections change anything about the City Council to get new things approved?

 

[OKW Lover]

I'm sure there will be silence on Disney's part until after the November elections. Once past them, perhaps around the first of the year, I'd expect some announcement about what they are going to do with that area.

 

[The Pho]

I can't imagine they'll just scrap the project altogether. Perhaps scale it down or something, but they kicked all those businesses out and aren't earning any money from that area now so they'll probably make a quick move once they see those election results.

Plus Earl of Sandwich is supposedly reopening just off property now, so no need for the area.

 

[Dean Marino]

Time to move to Texas . For reference? Dear wife and I live in MI....
All personal opinion - I'm not necessarily right, no one else is necessarily wrong.

 

[rteetz]

Time to move to Texas . For reference? Dear wife and I live in MI....
All personal opinion - I'm not necessarily right, no one else is necessarily wrong.

And that makes absolutely 0 sense.