Disney is proposing to invest a cool $1 billion dollars in the Anaheim Resort Area to expand the Disneyland Resort. This would include expanding its theme parks, Disneyland and/or California Adventure; build a 5,000 space parking garage connecting guests to the ARA and the Disneyland Resort; and creating a new “Harbor Gateway” to improve overall circulation and relieve congestion on Harbor Boulevard, Ball Road, Katella Avenue and Disneyland Drive.
The only thing Disney is asking of the city is to extend the current moratorium on an entertainment or gate tax for 30 years. Disney isn’t asking the city to pay for the parking structure – just an agreement to continue not doing something (taxing guests to enter the Disney parks) what they city hasn’t been doing, and is unlikely to do in the future.
This should be an easy “yes.”
The current ban on a gate tax is part of the 1996 development agreement between Disney and the city that set the stage for the massive expansion of that has fueled the growth of the Resort Area. The numbers since 1996 tell the story:
- The Disneyland Resort has doubled its workforce from 12,120 to 28,000.
- Attendance has grown 60%
- Anaheim’s annual TOT revenue has more than doubled from $45 million to $110 million
- The average daily rate of hotels has almost doubled from $87 to $160.
According to an independent study by KPMG, Disney’s proposed $1 billion investment could:
- Support the 2,600 Anaheim jobs each year (most of them permanent)
- $108 million in additional annual wages
- Increase the Disneyland Resort workforce by 5%
- Boost the Disneyland Resort’s annual economic output by an average of 8.3% – the equivalent of a $342 million annual average increase in economic output. That’s $14 billion in additional economic output over 40 years.
- Generate an additional $15 million in annual tax revenues for the city.
Disney’s only ask is that the city continue the prohibition on slapping a gate tax on its guests for the next 30 years, and is willing to forfeit the gate tax ban if expansion shovels are not in the ground by the end of 2017. Not such a big ask in Anaheim. After all, critics of Councilwoman Kris Murray’s “Anaheim taxpayer Protection Act” were adamant her proposed charter amendment was unnecessary by claiming danger the voters are highly unlikely to embrace new taxes such as a gate tax. In that case, the city is effectively conceding nothing in return for a $1 billion investment by its biggest employer. It’s hard to base opposition to a private economic development initiative in order to retain an option one claims one will not be exercised.
This is a great deal for Anaheim. it would be insane for the City Council to turn it down. It will work in synergy with the Anaheim Convention Center expansion and the Hotel Incentive Policy to fuel economic expansion that is beneficial to the city. This is what is known as the rising tide that lifts all boats. In exchange for refraining from an unnecessary tax, the City of Anaheim gains a huge investment of private capital, more jobs and economic growth, and more tax revenues.
Mayor Tom Tait has already declared his opposition to the proposal, telling the OC Register:
“As much as I’d like to see Disney expand, there are other ways to help them by streamlining the development process and speeding up approval times,” Tait said. “Chaining the hands of future residents on their ability to impose taxes will jeopardize the city’s financial health.”
The city ought to be streamlining the development process and accelerating approvals for all businesses as a matter of policy, not as a special carrot to entice Disney’s investment. That’s the whole point of the Regulatory Reform Task Force.
As for the “chaining the hands” argument: elected bodies ‘chain the hands” of their successors on a continual basis. Every time a city council approves an agreement with a bargaining unit, it “chains the hands” of future councils. The mayor’s own proposals for ballot box budgeting “chain the hands” of future councils.
It’s curious that a company’s request that the city refrain from a particular tax in order to facilitate a huge economic investment would elicit opposition from quarters claiming to voice true conservatism. Pre-1980 and the election of Ronald Reagan, the Republican Party and conservatives generally had been the green-eyed party that supported budget balancing through taxation. Reagan reversed that and made us the party of lowering taxes to spur economic growth – a side-effect of which was increased tax revenues.
In order to secure a ginormous investment in the city’s future economic growth, all the Anaheim City Council has to do is promise to continue not doing something. Thomas Jefferson said “That government is best that governs least.” Here is rare opportunity for a local government in Taxifornia to do just that.
Can someone please give Tait the documents so he can just re-register as a democrat already? His anti-biz credentials are nearly flawless these days.
My biggest concern isn’t whether Anaheim will unfairly penalize visitors from Wisconsin, Ohio and Texas to help support the infrastructure which serves a Non-Citizen population in the name of “equality”.
My concern is if and when this does happen, social engineers like Jose Moreno will stack the deck so that money get drained into the pockets of the “Poverty Pimps”. It recently happened in Santa Ana, It’s getting ready to happen in Garden Grove. It is not the responsibility of Disney, Angel, Ducks guests to subsidize the meals and “parkland” of those less fortunate.
When people talk about redistribution of wealth, this is it. Asking Middle class Americans who visit Disneyland to “donate” a dollar to a largely illegal immigrant population. Doesn’t seem fair to me. But, it’s not meant to be fair, it’s a belief by people who think UNITED AIRLINES and DISNEY and HILTON need to pay for their way.
In 2013, the Park generated 16.5 million visitors. So if there’s a gate tax of $1, the difference isn’t that much when you factor in the economic benefits of more permanent jobs, lots of union construction jobs and traffic improvements to the area.
That’s 500 million dollars, Dan.
While I’m sure the pros and cons are up for debate, let’s not toss aside half a billion dollars in direct tax revenue as inconsequential.
First off Ryan, KPMG is a pretty reputable company. From their report above, the city will generate an extra $15 million *annually* as a result of this deal. If you will recall the extensive writings of Mr. Diamond on the OJ blog calling for a $1 per person gate tax and the 16.5 million visitors a day to the parks in 2013 (I’m certain its more today but can’t find an updated stat), there’s a difference of $1.5 million annually (let’s say $3 million annually) for 30 years. So somewhere there’s a $45 million to $90 gap in the extra money the city would get versus what they could get if there was a gate tax on top of what the city already gets from Anaheim park visitors today. But the gate tax assumes status quo on the Park…no improvements, no expansion.
I think this “deficit” gets cut dramatically when you factor in the permanent new jobs the expansion creates in addition to good high paying construction jobs plus improvements to traffic flow around the park and in the resort area. $342 million annually in increased economic output with the city benefitting and I’m sure that Tait Company customers in Garden Grove will enjoy an economic boost too.
I’m trying to figure out where you got $500 million from. But please do take apart KPMG’s report
16,500,000 (your attendance) * $1 (your one dollar) * 30 years (term of deal) = $495,000,000.
vs the $15,000,000 x 30 by going with the deal. $450,000 plus all the extra jobs compared with the $495,000 no expansion/no jobs…
so an extra $45 million over 30 years vs the economic impact of 2,600 new jobs and an extra $342 million in economic output. Really fellas, I’m the slow one here?
What aren’t you getting?
I’ll give you this; with expansion, attendance at the parks will rise so your gate tax numbers will also rise, but not nearly enough to offset the $342 million in economic output.
Again, you’re unstoppable.
I’ll repeat myself.
“While I’m sure the pros and cons are up for debate . . .”
Learn.
To.
Read.
that’s $450 million and $495 million — I shouldn’t do this until I’ve finished a cup of coffee. I blame the cold medicine I’m taking
I’d be more concerned with the point you missed rather than a few zeros.
Your gate tax numbers operate in a changeless vacuum; mine reflect continued Disney investment that achieves a greater financial reward fro the city.
OMG, it’s like talking to a wall.
They aren’t “my” numbers, nor are they “yours”.
Tip: I’m not debating which is better. I’m suggesting that neither is irrelevant and that it’s worth a discussion.
actually, you are debating. I can read and so can you, but as far as the “talking to a wall” comment, I feel that everytime I engage you in any sort of back and forth.
the half billion in gate taxes pushed by the blog you write for is nothing compared to the $342 in economic benefit annually for the next 30 years. The city would like get far more in return.
I’m debating?
Oh, the humanity.
I’m debating all right, but it’s not on a gate tax.
The blog I write for doesn’t push anything, let alone a gate tax.
Individual authors? Well, that’s a different story.
While you may have the literal capacity to read, perhaps you should interpret my critique through a slightly broader lens.
16.5 x 30 =495.
Are you kind of slow or something?
Dude, don’t even . . . he’ll use that as justification to name call for the next millennium.
There’s no “lost revenue,” Ryan. Anaheim can’t lose revenue on a tax that doesn’t exist.
Not sure what yer talkin’ bout there, chief.
Just how is Disney proposing the money be spent? Who will determine which projects are funded? How much of the money will be spent within Disneyland and how much will go to fund improvements outside of the theme park?