jw marriott GW feature

[Updated at the end with today’s OC Register editorial about the JW Marriott announcement.]

Several weeks ago, the OC Register published an editorial mocking the Anaheim TOT tax rebate agreement intended to facilitate the building of two luxury hotels at the GardenWalk: “Tax Giveaway Can’t Lure Hotel To Anaheim GardenWalk.” The editorial was notable for the intellectual dishonesty of ignoring the role of litigation by a radical pressure group in delaying the project.

It is also notable for being wrong.

This weekend, the OC Register reported that one of the two GardenWalk Hotels will be a luxury, 4-diamond rated JW Marriott. So much for the failure of the TOT rebate incentive:

A developer has submitted plans to build a luxury hotel at the GardenWalk mall near Disneyland, becoming the first to take advantage of a hefty city subsidy that aims to entice more-affluent tourists to stay in Anaheim.

The JW Marriott Anaheim would rise 12 stories with 466 guest rooms, ballrooms and meeting rooms on a 2.8-acre dirt lot near Katella Avenue and Clementine Street, within walking distance of Disney’s theme parks and the Convention Center.

It would cost $150 million-plus to build the hotel, financed in large part by a 70 percent return on bed taxes collected there over 20 years. Opponents have challenged the deal in court.

Despite the ongoing legal battle, developer Bill O’Connell Sr. said that “the time was right to move ahead,” and an application was filed Wednesday with Anaheim’s Planning Department.

“With the JW Marriott, we are bringing a highly respected hotel brand that will do great things by creating jobs, boosting the hotel industry and attracting bigger and better conventions to Anaheim,” said O’Connell, head of O’Connell Hotels & Hospitality. He is developing the hotel with Prospera Hotels. “We look forward to moving ahead with this project, which will provide tremendous benefits to the city of Anaheim, its visitors and residents.”

The hotel would be the first JW Marriott in Orange County and the fifth in California. The luxury chain meets AAA’s stringent guidelines for four-diamond ratings.

This should be welcomed as good news by everyone who sincerely desires the continued success and development of the Anaheim Resort, because a consequence of such success is good jobs and the opportunity to rise. Perhaps the announcement will usher in an end to the despicable vilification of the O’Connells by opponents of this economic development tool, as well as to the destructive lawsuits from militantly left-wing OCCORD and its attorney Corey Briggs. Perhaps, but unlikely. Briggs has threatened to litigate every hotel development agreement made under the city’s new Hotel Incentive Policy. Good luck with that one, comrades; if those lawsuits are as ridiculous as the dying lawsuit against the GardenWalk agreement, the net effect will be to consume greater amounts of OCCORD’s union funding. If OCCORD were truly interested in the betterment of the poor and immigrants, it would stop fighting a policy that opens opportunities for work and self-advancement.

UPDATED: the OC Register published another editorial taking a shot at the GardenWalk project and the TOT rebate approach in general.  The editorial started with an error:

“It only seems natural that the first person to submit plans under Anaheim’s new hotel incentive program…”

Actually, the JW Marriott project precedes the Hotel Incentive Program and comes under a separate agreement approved by the city council in 2013. Technically, no project put together under the Hotel Incentive Program has yet submitted plans.

The editorialist did finally acknowledge the role litigation (from a radical pressure group) in delaying the project – a key factor that was ignored in the June editorial.

The editorial concludes thusly:

But that is also where he gets it wrong. If there hasn’t been a market for these luxury hotel brands, a few Anaheim leaders shouldn’t try to summon that demand into existence with other people’s money. If the city wants more development, it should adopt a blanket policy that encourages growth and reduces taxes and red tape for all development, not just for the loftiest and most desirable projects.

And that – unlike the cheap, inaccurate “crony capitalism” charge — is a legitimate, valid critique. Reasonable people can differ on the use of TT tax rebates to spur luxury hotel development. Opposing such programs on principle is a valid position, although one then wonders if the OC Register would also oppose state tax and regulatory reforms and incentives crafted to attract manufacturing jobs to the state (scuh as other states use to poach businesses from California). Would that be “picking winners and losers” or “summoning” an industry into demand?

I am all in favor of the City of Anaheim reducing taxes and red tape for all development. Perhaps the editorial writer can provide some specifics that are within Anaheim’s power to act on? In the meantime, we ought to recognize this is California, not Texas. We live in a state run by left-wingers who are ignorant of how the free market works, when they are not downright hostile to it. Cities have very few economic development tools available to them for attracting businesses and jobs.  Policies such as TOT tax rebates not ideal, but in the case of Anaheim, which has invested for many decades in the development of the Resort Area, it is a practical tool for maintaining the Resort’s competitive edge as a convention and tourist destination.