The City of Anaheim and Disneyland Resorts have ended two economic development agreements, puncturing a system of tax incentives that have benefited the resort for decades. The decision to call off the agreements was mutual and followed a letter to the City Council from Disneyland Resort President Josh D’Amaro.
"[I]t has become apparent that certain policies that were adopted to enhance the Anaheim Resort District and benefit the city… have instead created an adversarial climate where there should be cooperation and goodwill," D'Amaro wrote in his letter to the city. The company requested an end to the agreements and, after heated debate, the Council obliged.
One of the agreements prevents the city from applying an entertainment tax to admissions in exchange for the park’s investment of $1 billion or more by 2024. The other offers a $267 million hotel tax rebate in exchange for the building of a luxury hotel. This month, Disney learned that a hotel slated to open in 2021 under the deal did not qualify because its location had been moved.
Significantly, the cancellation of these incentives means Disney won't be bound by the language of a November ballot measure requiring businesses that receive tax incentives to raise hourly wages to $15, plus $1 every year after, through 2022. Disney insists that was not a factor in its request, noting that it already plans to begin paying workers $15 per hour in January.
A series of subsidies, incentives and rebates have benefited Disney to the tune of more than $1 billion over the past two decades. Increasingly, however, Anaheim’s City Council has put pressure on the resort and questioned whether it is getting enough in return.
Disney remains the City of Anaheim’s largest employer, with around 30,600 people (19% of the city) working for its resort.