Anaheim Holding Hearing Over Disney Proposal

UPDATE: The City Council voted to extend the tax breaks for the proposed 30 years.

The city of Anaheim will holding a hearing to discuss Disney's proposal to invest a billion dollars into Disneyland, Disney's California Adventure, and the surrounding area in exchange for no new taxes for the next 30 years. To note Disney has been exempt from any taxes on ticket sales (a “gate tax”) since 1996. That deal expires next June, and interestingly the man that solidified the year limit of 20 years for that deal is now the mayor, Tom Tait, opposes the plan on grounds of being anti-corporate tax breaks and subsidies. The city council is for the proposal. To clarify the mayor is saying he does not want to immediately drop taxes onto Disney as soon as the deal expires, but instead is saying that additional revenue might be handy in the future to the city.

The nutshell is Disney is offering to invest in expanding the parks, parking, improving surrounding streets over the course of 2017 to 2024. Having the rights to Star Wars, Pixar, and Marvel, one could speculate those expansions to include those franchises. Especially Marvel, where there is no conflicting rights to use several of the popular characters like there is in Orlando. Disney has also expressed interest in adding another $500 million to extend the deal another 15 years. The expansions would potentially add jobs and eventually draw in more tourists for the area.

The mayor, however, sees a potential “gate tax” or similar as a useful tool to have as an option if the city gets in a crunch, needs build new amenities, hire more police officers, or paying it's $500 million in pension obligations. Disney, of course, wants to avoid the tax (to note no other park locations have one), claiming it would hurt it's ability to invest in the parks there from loss of revenue since fewer guests could afford to go and how much they'd spend there.

 

Patrick

 

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