The relationship between the community and theme parks are usually pretty smooth because of both benefits from one another. The parks hire a lot of people to work for them and their visitors pay a huge amount of taxes. The parks offer the city with a few free tickets for politicians or for charitable causes. When parks ask the local government to approve their new plans for developments they approve them. Both are clearly taking advantage of each other and are both happy. This goes on for a while until some citizens realized they’re not really getting any deal from the parks and the representatives elected from their votes. This is what happened between the city officials of Anaheim and Disneyland Resort.
The agreements for Disneyland tax breaks were ended through the votes of Anaheim City Council. The tax breaks were given because of the Disneyland’s investments in its theme park and shopping district. They were meant to encourage Disney to build a 700-room luxury resort and keep on investing in expansions at Disneyland and Disney California Adventure.
According to the Los Angeles Times, Anaheim city officials received a letter from Disney stating that the incentives caused an antagonistic environment where cooperation and goodwill are supposed to be seen.
What happened between Anaheim and Disney?
Over the last two decades, Anaheim and Disney had a great relationship that created $1 billion worth of subsidies, incentives, rebates, and tax breaks. Until as the composition of the city council changes and some local elected officials started to question the city’s generosity.
Anaheim approved two tax agreements for the last few years to benefit Disneyland Resort. The first one is to prohibit the city from collecting entertainment tax on the price of the admission in exchange for the resort’s commitment to invest at least $1 billion by 2024.
Star Wars: Galaxy’s Edge expansion is scheduled to open next year at a cost of $1 billion and according to Disney officials, they did exactly what the 2015 deal asked from them. Announcements were also made by Disney California Adventure Park regarding expansions on superheroes of Marvel comics and movies/
The second tax break Disneyland is enjoying was adopted in 2016 giving the resort a $267 million rebate on the city’s hotel tax only if Disney invests in a luxury hotel. Although Disneyland Resort successfully drew up plans to build the hotel and was supposed to be opened in 2021, the Anaheim city attorney, later on, found out that the hotel doesn't qualify for the tax break after Disney relocated the project after the deal was fulfilled.
The plan for building a hotel was put on hold by Disney representatives even though several businesses were already forced to close in the Downtown Disney shopping district.
What were the repercussions of eliminating tax breaks?
About 60 Disneyland workers including several housekeepers and bakers, requested that their living wage is paid by the resort whether or not the company gets a city tax break.
A housekeeper who worked at the resort for 10 years named Julieta Bricena asked the council to share what they have been making to the people who created magic at the resort. Other workers feel frustrated coming home after a long day at work at what’s supposed to be “The Happiest Place on Earth” because of the fact that they still belong to the low-income earners.
The critics of Disney said it could be that Disney’s real motive behind requesting to end the tax breaks is to ensure that they are safe from the November 6 ballot measure that would require the resort to pay all its workers a living wage if passed.
Unions representing resort workers collected enough signatures that required large hospitality businesses to accept a city tax subsidy to pay workers a minimum of $15 an hour and a $1 hourly increase each Jan. 1 until 2022.
This measure was meant to target the Disneyland Resort and its 30, 000 employees.
Disneyland, however, insisted its way of securing contracts with four of its largest unions that represents 9,700 workers. The discussion was to raise hourly wages up to 20% right away and another 13% in January.
Everyone’s asking who will win between Anaheim politicians, Disneyland cast members, Disney management and Theme park fans after all of this is over. That’s something we all have to watch out for.
