Yesterday, Anaheim Councilwoman Lucille Kring sent out this e-mail regarding the GardenWalk agreement coming before the City Council this evening:
To the Residents, Business Owners and Workers in the City of Anaheim,
There has been so much misinformation about the Garden Walk issue that I feel the time has come for my voice to be heard on this subject. First of all, the city is NOT writing a check to a developer for $158 million. There will be no cuts to police, fire or city services.
Some background on the subject of tax subsidies for development in our City:
In May, 1999 on a 5-0 unanimous vote by the council consisting of Mayor Tom Daly, Shirley McCracken, Frank Feldhaus, Tom Tait and myself, The Pointe Anaheim Project, later named Garden Walk was approved and was to consist of three hotels, high end dining and retail, public art displays and the possibility of a public aquarium. An additional 400 Time Share units were also planned above the parking structure. Included in the footprint of that project was the Anaheim Plaza Hotel, which would have given the mall a frontage on Harbor Boulevard, across from Disneyland. After the 9-11 terrorist attacks, the economy suffered a period of uncertainty that halted a great deal of building; the developer of this project did not have the funds to buy the hotel and the main entrance of the mall ended up on Katella. There were a few starts and stops because of the economy. The mall opened in June, 2008 with about 65% occupancy. The six restaurants all opened between 11-07 and 4-08.
The original deal approved by that City Council gave the developer 50% of the sales tax to help with the parking structure that was to be available for overflow parking from the convention center. They also were to receive 50% of the T.O.T. (Transient Occupancy Tax) and 20% sales tax from the hotels.
As many of you know, my husband and I opened a business in that mall in July, 08. Gradually all the food court restaurants closed, along with Chico’s, Anne Taylor Loft, Kay’s Jewelers, Tommy Bahama, Tommy Hilfiger, Japanese Grill, Luxe Salon, our wine bar and many others.
With this current plan for the proposed Garden Walk hotels, there is a 70% rebate of the T.O.T. They are asking for a 2 year window before starting construction but will start as soon as possible. Many of the jobs will go to local Anaheim workers. Some members of the construction industry are experiencing over 50% unemployment. With jobs they will contribute to the economy and pay taxes that will go into the general fund of the City of Anaheim.
The developer is paying property taxes now and will continue to pay for the life of the hotels. Sales tax from the hotels’ sales will also go into the City’s general fund.
Unlike the former agreement in 1999, there is no sales tax rebate to the hoteliers.
Unless the hotels are built and someone rents a room, no money will be rebated to them. The line to remember is that they have up to two years to start to build. It will take 30+ months to build the hotel(s) and then one year of guests renting rooms before there is any calculation of T.O.T. rebate paid to them. If the hotels never get built, they will receive nothing.
Remember that all this time property tax is being paid which goes into the general fund for police, fire and city services.
The developer will receive 70% of the T.O.T. rebate, 20% will go to pay off the City of Anaheim Resort Bonds and 10% will go to the general fund. As the hotels are more successful, the money from these percentages will also increase. This subsidy is not open-ended. It is for a time certain. And the subsidy is needed for the developer to obtain the construction loan. Again, the hotels will be built long before any money is rebated to them.
The city has a history of helping with economic assistance. In the early 2000’s when hotel brands were going to Garden Grove because they gave away free land, T.O.T. and sales tax rebates. Anaheim could not get a brand name hotel to come here because we didn’t offer anything. It was decided that we would help with a 50% rebate for T.O.T. for any new hotel construction. Only one hotel took advantage of it, the Doubletree Suites which is a very successful hotel. Members of the council were the same as in 1999 and the vote was a unanimous 5-0 in support.
These hotels will help visitors and conventioneers stay in Anaheim and not go to the four star hotels in the beach cities which is what is happening now. They will also allow for higher end conventions to book in Anaheim.
With no subsidy they could build 3 star hotels with 250 rooms each and only go up to 4 floors. We are in a global economy and we compete with LA, Santa Barbara, etc. for vacationers and conventions.
From a financial outlook this is a great deal for the city, her residents and the general fund. Each year that these hotels are open there is more money that will go into the general fund for parks, libraries, fire and police.
If you have any questions or concerns, please contact me at LucilleKring@aol.com
I sincerely hope this has helped you to understand this issue more clearly.
Anaheim City Council Woman
City of Anaheim
200 S. Anaheim Boulevard, 7th Floor
Anaheim, CA 92805