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.”
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.