Disney pumps breaks on hotel amid squabble with city officials

The firm secured a $267M tax break for the luxury hotel project

TRD LOS ANGELES /
Aug.August 16, 2018 05:00 PM
Disney Exec Bob Iger, Anaheim Hotel Rendering (Credit: Wikimedia Commons)

It’s not the happiest place on Earth. At least not today.

Walt Disney Co. has put its plans to build a luxury hotel on its Disneyland Resort in Anaheim on hold after failing to come to an agreement with the Anaheim City Council, the Los Angeles Times reported.

Disney secured a $267 million tax break to build the 700-room hotel on the north end of Disney’s massive property, at 1401 Disneyland Drive, in July 2016. The tax credit, which translates to a 70 percent break from the city’s transient occupancy tax, would last for 20 years.

The amusement park giant has since changed its mind on the location of the luxury hotel, instead opting to build it in a more central location within Downtown Disney.

City officials are now saying the new location does not qualify for the subsidy. In a letter to Disney’s attorneys, City Attorney Robert Fabela claims the agreement is “site-specific.”

The feud comes at a time when there is heightened scrutiny on big city-commissioned tax breaks. A new 29-page report released Friday by Ron Galperin, controller for L.A. City, showed the city has provided nearly $1 billion in tax breaks since 2005. Many of those deals were made “without having a broader, comprehensive Citywide economic development strategy,” the report said.

Anaheim officials could potentially fix the Disney situation by voting to amend the subsidy agreement, or by crafting a new tax break.

There are many businesses in the area where Disney wants to build the new hotel. Some, including the AMC Theatre, Rainforest Cafe and Earl of Sandwich, have already closed in preparation for the project.

Disney has yet to begin construction on the project, preferring for the moment to evaluate its economic viability without the tax break.

The hotel would be the fourth hotel at the Disneyland Resort and first luxury property built in two decades. [LAT] — Natalie Hoberman


Related Articles

arrow_forward_ios
AEG CEO Dan Beckerman (Credit: Shaun Clark/Getty Images)

AEG plans 160-key hotel next to its DTLA headquarters

AEG plans 160-key hotel next to its DTLA headquarters
Pacific Hospitality Group CEO Tim Busch and a Zen Room at Huntington Beach’s Pasea Hotel and Spa

Desperate for revenue, LA hotels pitch “zen offices” to work-from-homers

Desperate for revenue, LA hotels pitch “zen offices” to work-from-homers
County supervisors Mark Ridley-Thomas and Janice Hahn

LA County Supervisors plan for the long-term as the homeless move into hotels

LA County Supervisors plan for the long-term as the homeless move into hotels
Gavin Newsom (Credit: Emma McIntyre/Getty Images)

Homeless COVID-19 patients could save California’s hotel owners

Homeless COVID-19 patients could save California’s hotel owners
Thousands of CA hotel workers have been laid off

Expedited layoffs mean thousands of hotel job cuts

Expedited layoffs mean thousands of hotel job cuts
Blackstone-owned Homewood Suites by SF airport (Credit: Hilton and iStock)

Blackstone sues over scotched $265M hotel deal

Blackstone sues over scotched $265M hotel deal
Andre Balazs and the Chateau Marmont (Credit: David M. Benett/Dave Benett/Getty Images for Michael Kors)

Luxury hotels are laying off workers and providing them few benefits

Luxury hotels are laying off workers and providing them few benefits
Los Angeles Mayor Eric Garcetti is looking for large spaces to house COVID-19 patients (Credit: Emily Shur/Wikipedia and Raymond Boyd/Getty Images)

Garcetti: LA will use hotels, theaters and sports venues to house COVID-19 patients

Garcetti: LA will use hotels, theaters and sports venues to house COVID-19 patients
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...