Anaheim gives Disney a tax break for a new luxury hotel

The operators of the Happiest Place on Earth are a bit happier today.

After lengthy debate, the Anaheim City Council voted to give Disneyland a tax break of about $267 million over the next 20 years to build a luxury hotel on what is now a parking lot near the theme park.

The tax break, which was created last year to promote the construction of high-end hotels in the city, calls for a 70% break on the city’s transient occupancy tax for any hotel that is rated as four diamonds or above by AAA’s hotel standards.

The 3-1 vote Tuesday night, with opposition from James Vanderbilt, confirms that the tax incentive applies to the 700-room hotel proposed by Walt Disney Parks and Resorts on a 25-acre parcel at 1401 Disneyland Way.

The council also approved the same tax break for two other four-diamond hotels, a 634-room hotel on West Katella Avenue and a 580-room hotel on South Harbor Boulevard.

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Anaheim Mayor Tom Tait spoke out against the tax break, saying the incentive was not needed. However, he left for a meeting in Washington before the vote took place.

The latest tax incentive comes nearly one year after the council voted to exempt the theme park from any new ticket taxes for the next 30 years as long as Disney invests at least $1 billion in the park before 2024. Disney may have met that obligation with a 14-acre expansion for its new Star Wars Land project.

Tait opposed the ticket tax vote last year, saying it restricts the city from imposing a ticket tax even during tough financial times in the future.

A staff report on the hotel tax break said the city may be losing out on $267 million in transient occupancy taxes but will collect $400 million in the remaining transient taxes, property taxes and sales taxes from the hotel over the next 20 years. If the property were to remain a parking lot for the next 20 years, it would generate $1.1 million in taxes for the city, the staff report said.

“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,� Mary Niven, senior vice president of Disneyland Resort Operations, said in a statement. “Disney’s flagship hotel will generate $750 million in new revenue to the city over 40 years, create thousands of construction and permanent jobs, and drive a new and long-term revenue stream to the general fund for decades to come.�

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UPDATES:

2:02 p.m.: This article has been updated with additional information.

The original article was published at 12:14 p.m.