The Anaheim City Council has approved generous tax breaks aimed at courting the luxury resort and hotel industry.
In a 3 to 2 vote Tuesday, council members signed off on a plan that would allow certain hotel developers with AAA four-diamond ratings to keep 70 percent of their room taxes for up to 20 years. Supporters of the deal say it would triple the city’s hotel tax revenue by encouraging more investment in Anaheim. But opponents likened the move to corporate welfare, with Mayor Tom Tait calling it a “financially disastrous” decision.
Hotel room taxes account for $123 million in general fund revenue each year, according to a city staff report. Mayor Tait argued that the vast majority of that money will be pocketed by developers, rather than spurring significant economic activity. Council Member Lucille Kring, on the other hand, said too many wealthy investors have already left Anaheim for neighboring cities like Newport Beach and Dana Point.
"70 percent is a lot of money,” Kring acknowledged, “but we're getting a lot back from these developers."
As part of the plan, developers who receive the subsidy would agree to give preference to Anaheim residents in hiring. Existing hotels that upgrade their amenities would also receive a smaller tax break. A similar deal was approved in 2013 for two luxury hotels in the Gardenwalk mall. That deal has also generated significant controversy.
Read more about Tuesday’s vote here.