Rendering of GardenWalk hotels.
The GardenWalk Hotels agreement is on the May 14 agenda of the Anaheim City Council. The cap on the total TOT rebate is still $158 million (which is a tricky number that merits further explanation in another post), but the 80%-20% split has been modified to 70%-30% stretched out over a longer period of time of 20 years (which actually makes it more expensive for the developer). This applies to two hotels — a convention hotel of least 466 rooms and a resort hotel of at least 350 rooms. These hotels will be built separately in phases, and the TOT rebate “ends on the earlier of twenty years from completion of construction or, provision of assistance up to a not to exceed amount of approximately $158 million gross. The net present value (NPV) of the maximum assistance under the Agreements ($46.6 million) represents 16% of development costs and compares quite favorably with our Southern California competitors as noted above.”
Unlike the earlier GardenWalk assistance agreement, this time the staff is recommending a “yes” vote by the council. Here’s the staff report’s conclusion:
“As noted in the Developer’s hotel economic analysis, and validated by the City’s independent real estate economist, hotel development of a luxury caliber at the GardenWalk site will bring a number of positive benefits to both the City of Anaheim and the greater hospitality community. In addition to increasing tax revenues, enhancing our existing hotel supply and attracting highly rated conventions to the City, the hotel development will also create and support approximately 1,300 permanent local jobs annually, as well as 3,000 temporary jobs related to construction. Moreover, the proposed GardenWalk hotels will significantly enhance and support the retail, dining and entertainment outlets at the repositioned GardenWalk center as originally envisioned. Finally, the proposed agreement poses no risk to the General Fund while serving as an important step in revitalizing the City’s tourist infrastructure and enhancing our destination that serves as the primary economic engine of Anaheim, benefiting the City as a whole.”
And then the reality that amazingly and relentlessly escapes the intellectual grasp of opponents who claim it “diverts $158 from fill-in-the-blank“:
IMPACT ON BUDGET:
City assistance is conditioned upon development of the hotels. Accordingly, at such time as the Developer may complete construction of hotels consistent with the Agreements, there will be a positive increase in revenues to the General Fund.
Here’s the link to the supporting documents.
Charter Review Committee
Also on the discussion agenda is the Charter Review Committee proposed by Councilman Jordan Brandman at his swearing-in ceremony. The item reads:
“Approve conducting a review of the City’s Charter, direct staff to commence a Charter review process, and direct staff to prepare a resolution for City Council consideration that outlines the creation of a citizens advisory committee, referred to as the Charter Review Committee, scope of work of such committee, including potential areas of amendment to the Charter for committee review/recommendation, and define a time-frame for delivery of a final report with the Committee’s recommendations and authorize staff to receive applications for the selection and appointment of a Charter Review Committee.”
Given that the just-completed Citizens Advisory Committee on Election recommendations necessarily entail amending the city charter, I’m curious as too how this broader committee plays into that.
I hope it passes.
That was a very strong and thorough staff report for the GardenWalk Economic Assistance Agreement. If that had been the staff report last year, it would have saved the city a whole lot of trouble. The now former City Manager’s conclusion was terribly off-base last year, and he should have know better having been the City’s finance director. The agreement approved last year would have had similar positive impacts on the General Fund, but he wasn’t willing to say that because he thought future developers would just look at the 80% number. If he had just said that the 80% number lead to the most positive outcome for the General Fund, it would have been easy to tell future developers that they aren’t entitled to an 80% rebate on their TOT because it wouldn’t lead to the most positive outcome for the General Fund. This was a strong staff report that clearly explained why this agreement is in the best interests of the city as a whole, not just the developer and Disney.
G- Disney is not a part of this agreement. But, I agree with you. Fantastic staff report done by a competent interim
I didn’t mean to imply that Disney was a part of the agreement. Getting those hotels built still benefits Disney. Just as it will benefit you and me and the rest of the residents of Anaheim.
Right now there is no hotel and no revenue. Under this plan, there will be two hotels, up to 4,300 jobs, no risk to the General Fund and a great addition to the prestige and desirability of Anaheim as a convention and vacation destination. The alternative is to wait and see, hope and pray, cross our fingers that neighboring cities don’t steal development opportunity. Quite frankly, the criticism surrounding this project is the perfect example of how Anaheim lost its way under Mayor Tait. Great cities aren’t created by chance, they are created by visionaries. It is time for Anaheim to remember who it is.
Here’s the 158 million dollar question: How much is the developer going to make on this project and is it reasonable given the substantial entry that public money will be making into the private marketplace?
Quite frankly, for this kind of money, it ought to be public knowledge what he’s getting paid, there ought to be penalties for breaching clear and specific deliverables, and there ought to be some security provided to the public in the event of a project interruption or default.
I cannot believe that the Mayor has the nerve to call his colleague a liar then turn around and blast today’s robocall that was waiting for us when we got home tonight.
Does he even read his own staff reports?
Is he literally calling everyone at City Hall a liar now?
At some point we need to look and say…”The Emperor Has NO Clothes.”
Today may just be that day.