Disney gets $267m from city to build hotel

The most interactive Disney Castle in the world at Shanghai Disneyland Park (iStock)
The most interactive Disney Castle in the world at Shanghai Disneyland Park (iStock)

Los Angeles - Walt Disney will receive an estimated $267m in tax rebates over 20 years from Anaheim, California to build a new luxury hotel next to its Disneyland theme park.

The City Council voted three to one on Tuesday night to approve the deal, which will return 70% of the lodging tax generated by the hotel to Disney as an incentive for the company to go forward with the project. The property will have an assessed value of $411m and cost guests about $450 a night, according to a summary of the proposal on the city’s website.

“We applaud the city council for creating this hotel policy and approving our plans for bringing a new Disney four-diamond hotel to the Resort Area,” Disney Senior Vice President Mary Niven said in a statement. The hotel is expected to generate $750m in new revenue to the city over 40 years, she said.

Disney has negotiated tax-saving deals with the city in the past, including an agreement last year that put a 30-year moratorium on ticket taxes in exchange for $1bn in new theme park investments. Anaheim Mayor Tom Tait criticized the hotel proposal in an opinion piece in the Orange County Register dated July 10, calling it a “bizarre giveaway program to the influential and powerful.”

Star Wars

Anaheim collects a tax equal to 15% of room revenues from operators in the city. The site, currently a parking lot, generates $40 000 a year in property taxes. Under the life of the hotel deal, Anaheim would collect $11.8m in property taxes and $7.2m in sales taxes from the project, according to the summary of the plan. The hotel would employ roughly 1 150 people.

Disney operates three hotels in Anaheim currently, including the Grand Californian Hotel and Spa where rates start at $379 a night, according to its website. The hotel, the first in the region for Disney in 20 years, is part of the company’s plans to invest more than $2bn in Anaheim over the next decade, including a “Star Wars”-themed attraction area at Disneyland.

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