The Anaheim City Council has voted to end agreements that offer the Disneyland Resort tax breaks for investing in its theme park and shopping district. The council pulled the plug on the incentives, which were designed to encourage Disney to build a 700-room luxury resort and continue investing in expansions at Disneyland and Disney California Adventure.
Disney requested the move in a letter to Anaheim city officials last week, saying the tax incentives had “created an adversarial climate where there should be cooperation and goodwill,” according to the Los Angeles Times.
The Times examined the cozy relationship between Anaheim and Disney, which over the last two decades resulted in more than $1 billion worth of subsidies, incentives, rebates and tax breaks. Amid the changing composition of the city counsel, some local elected officials have begun to question the city’s largesse.
Critics note there may be another motivation for Disney’s request: by eliminating tax agreements, the Burbank entertainment giant may be looking to shield itself from a November ballot measure that, if adopted by voters, would require the resort to pay a living wage.
The measure, which found a spot on the ballot after unions representing resort workers collected enough signatures, would require large hospitality businesses that accept a city tax subsidy to pay a minimum of $15 an hour, with a $1 hourly increase each January through 2022. Once wages reach $18 an hour, pay would be tied to the cost of living.
The initiative is clearly targeted Disneyland, with its 30,000 employees.
Disneyland still benefits from at least one agreement with the city, which said it would refrain from imposing a tax on admissions in exchange for at least $1 billion in investment through 2024. Disney’s Star Wars: Galaxy’s Edge expansion, expected to open next year, would qualify.
The Burbank entertainment conglomerate suspended plans for a 700-room hotel, to be built in the Downtown Disney shopping district, after learning the project would be ineligible for $267 million tax rebate. The hotel was originally proposed for a different location on the resort.