LA Times: Is Disney Paying Its Fair Share In Anaheim

[Darkbeer1]

Just to make it clear, Anaheim is NOT paying for the structure. The visitors who visit TOT taxes goes to pay of a Bond the city got (better rates) but any shortfall would have been paid by Disney, but there has been way more TOT fees collected than needed to pay off the bond. And as part of the deal, Anaheim did raise the TOT rate. So the city got their Convention Center Expansion covered, all the non-Disney Anaheim Resort improvements and much more as part of the same bond.

 

[Darkbeer1]

I should also state, I get the OC Register delivered to my driveway every day, plus I get the LA Times digitally.

But then, I pay very little for both due to my media discount.

But there is still something about sitting down and reading the paper during breakfast old school style.

 

[flynnibus]

What we know is that Disney wanted to expand and that it makes more sense if it can be done in Anaheim. In this instance Anaheim has the negotiating advantage. There are greater costs both upfront and ongoing running a resort out of two locations as opposed to one and less opportunity to maximize profits as visitors have to travel to two separate locations. Again Anaheim has a huge advantage here.

The guy with the most power in a negotiation is the one who is willing to walk away. Disney had already demonstrated its ability and willingness to walk away from projects. Disney can expand elsewhere... Anaheim can't. What other option did Anaheim have as a competing offer? Their negotiating was about ensuring Disney expanded there... and the positive impact that would have for the city. The prospect of spending money to make money. That's what the city did, while also addressing major issues the city had in the area.

The m&f deal is not a burden on the city. They financed it... but it's all paid by the taxes setup in the deal.. taxes paid by tourists, not city residents.

And look at the terms. Anaheim pays for the entire cost of the structure and Disney leases it for $1 a year. The structure creates revenue that Disney keeps all of not to mention gets to set the price of those using the structure.

So what. The city is no further behind because it's not like Disney would hire the need out to the city as an alternative. By using its power, the city secures a deal that has made hundreds of millions for the city and will continue to for decades.

I'm not saying that Anaheim should have held firm and say we aren't paying for anything. If simply feels to me that Anaheim could have secured a better deal. Obviously under different circumstances, but fast forward to now and what do you know Disney had no issues with paying for a new parking structure themselves. M&F cost what $90 million? To simplify things if Anaheim insisted Disney pay half (or say split parking revenue for a period of time) would Disney walk away from a $1.4 billion project over $45 million? I have my doubts. We'll never know.

That's a change from yesterday where you said Anaheim missed out on a real outcome... not just what you think they SHOULD have done. And the outcomes could be varied and not just walking away entirely - other elements could have been delayed, scaled back, or other backing removed. The deal was multi layered and involved so much... focusing only on the M&F element is pandering to people's hate of corporate profiting.

And really I find drawing comparisons to this latest proposal vs the resort district deal is stupid. The stakes are not the same, nor are even the pieces in play. This is prople focusing on things that "look alike" but really are nothing alike.

 

[flynnibus]

I think the gate tax ban was far worse of a deal for Anaheim. The thing Disney had to ante up was essentially "business as usual" and things that were already happening. It's like promising to do what was already happening... it's a sweetheart deal for Disney, with virtually no new upside for the city.

The luxury hotel tax rebate is a bit more nebulous- but I would have been against that program too. It's too favorable to developers for something that the market will dicatate anyway. No tax rebate will support a market on its own.

 

[Darkbeer1]

http://www.themeparkinsider.com/flume/201711/5805/

>>
If this sounds familiar, it's because Disney pulled the same thing on the Times last year — barring a Times reporter from the premiere of the Frozen musical at Disney California Adventure after he'd quoted an executive of a big Chinese firm who'd smack-talked Shanghai Disneyland.

So, here's my take, in three parts:

1) Disney has every right as a private (*okay, to be more precise, publicly-traded but not 'public as in government' owned) company to decide whom to talk with and which outlets to invite to media events and screenings. The Times can buy a ticket to review stuff if Disney doesn't let it have a free advance look. (Heck, I've done that plenty of times when Disney and other companies have either ignored me or frozen me out in the past.)

2) Disney had valid reasons to be upset with things in both instances of the Times' coverage. I've already explained why the Times' series on Disney and Anaheim was under-reported and lack vital context. The 2016 piece about Shanghai Disneyland gave significant play to anti-Disney comments from Wanda Group's Wang Jianlin, who talked big game but a year later tucked tail and ran, bailing out of the Chinese theme park business.<<

 

[c-one]

While I don't know, and you don't either, what specifically Disney provided the LA Times, I can say for sure they didn't add them into the story. So you cannot say it was a never ending or confusing statement. But the fact that the LA Times didn't use ANY comments from Disney indicates that those comments didn't meet their narrative. So I wouldn't call that fair and balanced reporting. I'd call that a one-sided political op-ed written at a time when this topic is a hot-button issue.

And as @TP2000 has pointed out, and asked, numerous times, what would be considered it's "fair share"? The article tries to ask that question, but doesn't answer it. No one has answered it, not even on this board.

So I direct the question at you since you back the article. And don't hide behind specific projects such as M&Fs. Answer the direct questions.

Does Disney pay its "fair share" of the Anaheim taxes? And if not what is the number that is considered paying its "fair share"?

First thing, I believe the LAT did use pieces of Disney's statement, and again, perhaps they could have had a larger share of the quotes if they had consented for an hour of interview time.

Second thing, the article doesn't answer the question "is Disney paying its fair share" because it's not the job of journalism to tell you what the answer is. If it did people who scream about the journalism being biased. Plainly obvious that that question is subjective. I don't have a good answer for it. The article presents facts about its deals with the city, and the POVs of Econ experts who study this sort of thing.

Frankly I didn't get the vibe that Disney came off as sinister when I first read the piece last month. Certainly not as bad as the regular corporate welfare municipalities put out to build pro sports arenas. It seems like a complicated issue that's up for debate in Anaheim with a number of valid outcomes. Disney going full paranoid freak out weeks later makes them look way worse and paints the original articles in a new light.

 

[flynnibus]

Frankly I didn't get the vibe that Disney came off as sinister when I first read the piece last month. Certainly not as bad as the regular corporate welfare municipalities put out to build pro sports arenas. It seems like a complicated issue that's up for debate in Anaheim with a number of valid outcomes. Disney going full paranoid freak out weeks later makes them look way worse and paints the original articles in a new light.

The piece dedicates a significant amount of space to paint a picture of past buying off officials and projecting inappropriate influence.... then paints the picture of elements of the resort district deal as pure sweetheart gifts that are out of the ordinary... and how the political lobbies and candidate backing is notable... and then acts like "the new sheriff in town..." is putting a stop to it.

Short of calling Disney names... it's pretty much a direct attack on disney's ethics. It presents itself as if this is some investigative reporting unearthing the dirty backroom dealings of the past.

 

[c-one]

I dunno. I read it as more sleepily bureaucratic than that. As much as I love a good Disney scandal. Even Foglesong got less ink than presumably more-neutral econ researchers. The more light shone on deals struck between taxpayer-funded governments and private companies, the better. I would prefer private companies not get involved in local politics but since this is America and it's what we do apparently, I appreciate journalists connecting the dots on company-funded PACs. We all read what we want into stories like this, to some extent. It's hard to separate that from a cold reading of the text.

 

[Deleted member 107043]

I think I get it now. As a Disney fan I'm supposed to condemn Disneyland as it continues to tranform its parks into IP driven experiential marketing ads for the Studio and vigorously defend it when its corrupt business practices are exposed by the local news media. Amiright?

 

[flynnibus]

I dunno. I read it as more sleepily bureaucratic than that. As much as I love a good Disney scandal. Even Foglesong got less ink than presumably more-neutral econ researchers. The more light shone on deals struck between taxpayer-funded governments and private companies, the better. I would prefer private companies not get involved in local politics but since this is America and it's what we do apparently, I appreciate journalists connecting the dots on company-funded PACs. We all read what we want into stories like this, to some extent. It's hard to separate that from a cold reading of the text.

Well that's why people labeled it a hit piece... because it would appear objective, yet it's been covered how the author didn't present both sides. The piece doesn't read as a recap of the past... it tries to paint it more as expose... and say that the behavior is out of favor now... by covering only the people that are against Disney. And inferring that's why they were elected.. verse going more into how the entire process shifted during that time and that impact on who and how they were elected.

It makes for an interesting read... but the less informed would take a whole lot of bait from the piece... as Hans had here.

 

[c-one]

I guess that's ultimately where we disagree, because the author presented enough of Disney's side that I came away from it thinking that "okay, I get why Disney did that, even if I don't agree with it." And I'd imagine it'd be even more different if they just let Colglaizer give the writer an hour to answer actual specific questions instead of vague statements. It's the total mismanagement of the story from Disney's angle I'm most interested in, between that and the complete botching of this Thor review business.

(I'm also wary of saying the "less informed" will have the wool pulled over their eyes by this piece. I think it's perfectly valid that we the Disney enthusiasts, visitors and shareholders will have a different perspective on it than people who live in some crappy neglected corner of Anaheim the city, and one is not necessarily more informed than the other.)

 

[Disney Irish]

First thing, I believe the LAT did use pieces of Disney's statement, and again, perhaps they could have had a larger share of the quotes if they had consented for an hour of interview time.

Second thing, the article doesn't answer the question "is Disney paying its fair share" because it's not the job of journalism to tell you what the answer is. If it did people who scream about the journalism being biased. Plainly obvious that that question is subjective. I don't have a good answer for it. The article presents facts about its deals with the city, and the POVs of Econ experts who study this sort of thing.

Frankly I didn't get the vibe that Disney came off as sinister when I first read the piece last month. Certainly not as bad as the regular corporate welfare municipalities put out to build pro sports arenas. It seems like a complicated issue that's up for debate in Anaheim with a number of valid outcomes. Disney going full paranoid freak out weeks later makes them look way worse and paints the original articles in a new light.

But the piece didn't present all the facts, it cherry-picked certain deals between the city and Disney to paint a picture of corporate greed and corruption. Without full details the reader is left to formulate a negative opinion on how Disney is just some greedy company trying to take advantage of the poor city and its city council. And then continues to try to paint Disney in even worse light by trying to highlight that this is how Disney does business everywhere it goes. It truly reads as a David vs Goliath story, where Tait and his crones are going to put a stop to the big bad media conglomerate. And again was written at a time when this topic is a hot-button issue just to get site clicks.

I have to ask, cause I don't know, if these were such bad deals at the time did the LA Times ever do any articles about them during or right after they happened? If not then why did they wait so long to report on it?

 

[flynnibus]

The Thor business is just the usual tit for tat that happens that normally goes on without being in the spotlight. Access to individuals or events is toyed with all the time... by both sides. Reading too much this happening 'now' is just as much an overreaction as someone who gets upset about all the 'additional incidents' that are reported after a major one. Its human nature to be sensitive to a subject after it's been brought to light... then inevitably it falls back into the 'not news' as it competes with other pressing topics. But the objective one realizes the pattern is not new or changed... just the public interest in it (or media interest...).

As to the less informed... it was demonstrated here. People thinking there has been a shift in Anaheim and there is no going back, blah blah blah. Because in part the article highlights the new council makeup, but does not educate or explore fully how that change of the guard happened. The article (and some readers) takes the change, and instead misapplies it as some new agenda in town that Anaheim has seen enough, blah blah blah. It's fiction. Distortions created by taking slices of truths and selectively weaving a telling of the events.

Most readers don't know how the changes in city elections shook up the board.. or how candidates run. They don't bother with grasping what 'publicly financed' really means in terms of burden or not. Instead of exploring what burden the M&F deal ACTUALLY puts on the city, it instead focuses on pure hypotheticals of 'what could have been...'. I could go on and on... by pandering to certain psyche the article spins up a reaction. A reaction that is easier to avoid if you know more than what the author is feeding you. Unfortunately, many do not know.

 

[Darkbeer1]

Here is a press release for 1996 that the city released.

DISNEYLAND RESORT EXPANSION TO FUND CRITICAL IMPROVEMENTS TO ANAHEIM RESORT AND CONVENTION CENTER

Disney commits to moving forward with `Disney's California Adventure,' pending approval of financial framework



ANAHEIM, Calif., July 15 /PRNewswire/ -- The City of Anaheim today unveiled a proposed financial framework to utilize revenues generated by the Anaheim Resort Area, including the proposed Disneyland Resort expansion, to fund an expanded Anaheim Convention Center and complete a comprehensive revitalization for the area surrounding Disneyland, known as the Anaheim Resort.

In conjunction with the City's announcement and pending approval by the Anaheim City Council, The Walt Disney Company said it will move forward with a $1.4 billion expansion of The Disneyland Resort. Construction would begin on The Disneyland Resort expansion, Convention Center expansion and Anaheim Resort area improvements in early 1997, slated to be completed by the year 2001.

"The continued vitality of the tourism and convention market is critical to the City's financial future," stated Jim Ruth, city manager, City of Anaheim. "Today working with Disney, we have developed a framework that will bring the Anaheim Resort into the 21st Century."

The proposed financial plan represents the next stage in the Anaheim Resort revitalization by combining the initial revitalization program with a comprehensive improvement plan for the entire area. The framework dedicates a portion of the revenues generated by the proposed Disneyland Resort expansion, the previously dedicated 3% Transient Occupancy Tax (TOT) and $96 million of transportation funding to pay for the approximately $550 million enhanced Anaheim Resort revitalization program that includes a $150 million expansion of the Convention Center. In order to accomplish this ambitious plan, Disney has agreed to help the City to maximize the proceeds realized from the bond issuance by providing credit support on the bonds which will protect the City's General Fund from risk. The financial plan will be subject to public review and will be recommended to the City Council in the coming months for consideration.

Ruth also stated that, as part of the proposed plan, the combined revenues from The Disneyland Resort and Convention Center expansion will:

-- fund the enhanced Anaheim Resort revitalization program including an expansion of the Convention Center;

-- pay for the increased City operating costs such as added police and fire; and

-- result in significant increase to net annual revenues to the General Fund from the area for city-wide use.

"One of the requirements set forth by the City Council for securing the Anaheim Resort's long-term competitiveness and economic vitality was to protect the General Fund from risk without imposing any new taxes," Ruth said. "With Disney's support, the proposed financial framework achieves this goal. It represents an unprecedented collaboration between the public and private sector that minimizes municipal risk and maximizes city-wide benefits for residents and businesses."

In January 1995, the City moved forward with a $174 million scaled- down version of the Anaheim Resort revitalization program to address the immediate needs of the Anaheim Resort area and help secure the ongoing competitiveness of the tourism and convention market. The scope of the program was dictated by the funds available at that time. The program included enhancements to the Convention Center, a unified signage program, a streetscape and landscape plan as well as transportation and infrastructure improvements. It was funded by an approved 2% increase in the Transient Occupancy Tax (TOT), commonly referred to as a hotel and bed tax, and a historical 1% TOT dedicated for the Convention Center improvements. All of the improvements in the 1995 program will be part of the approximately $550 million revitalization program proposed in the financial plan.

"Beginning in 1955, Disneyland and Anaheim worked together to create a world-class tourist destination," said Paul Pressler, president, The Disneyland Resort. "Today, working with the City, Disney has combined its creative and financial strength to help fund critical improvements needed in the area for the next millennium. We are excited to be able to work with the City to achieve these important goals: the expansion of The Disneyland Resort, expansion of the Convention Center and revitalization of the Anaheim Resort area."

As part of the proposed framework, Disney intends to build a second theme park, "Disney's California Adventure," next to Disneyland with its first phase completed in 2001. The new theme park design celebrates the fun and variety of California, its people, its accomplishments and its unique places -- from the glamor of Hollywood to the exhilaration of soaring above Yosemite Valley. The park's attractions will thrill guests with all of the entertainment magic the world has come to expect from The Disneyland Resort. In addition, the first-phase expansion plans would include 750 new hotel rooms within a deluxe resort hotel, and The Disneyland Center, a retail, dining and entertainment center that will cater to guests and convention visitors.

Pressler stated that the expansion of The Disneyland Resort will boost the Southern California economy and help aid the region's economic recovery. According to a Fiscal Impact Report completed by the Sedway Kotin Mouchly Group, a real estate and urban economics consulting firm, The Disneyland Resort expansion would generate $25 million annually in new public revenues to the City of Anaheim, $10 million annually to Orange County and $35 million per year to the State of California.

In addition, the project would generate more than $1.4 billion annually in economic activity for Southern California and create an estimated 14,500 jobs - 8,100 of which would be in Anaheim.

In the next few weeks, the City and Disney will be finalizing the details of the financial framework. Upon completion, the financing agreement would be subject to public review and a final vote by the Anaheim City Council.

 

[Darkbeer1]

And some LA Times articles from the 1990's.

http://articles.latimes.com/1995-01-31/news/mn-26483_1_disneyland-resort

>>Jan 31, 1995 - In a blow to Southern California's tourism industry, Walt Disney Co. has decided against building a $3-billion resort next to Disneyland, settling on a vastly scaled-down version instead, officials confirmed Monday.

Disney's two top managers for the project met Monday morning with Anaheim officials, and afterward said Disney will not renew its option to purchase six parcels of land around the park, including 10 acres once envisioned as the site for one of two huge parking structures.

"We still have this vision of creating a theme park that will work, but one that would not accommodate as many" visitors as originally outlined, said Disneyland's new president, Paul Pressler. "What we originally had envisioned was a very, very large resort. What we are looking at today is the ability to break it into component parts and build on it."

Anaheim City Manager Jim Ruth remained optimistic. "They are still committed to developing in Anaheim but will do so incrementally," he said. "A lot of time, effort and energy has gone into getting us where we are, and we don't think that is lost."<<

http://articles.latimes.com/1995-02-03/local/me-27796_1_anaheim-resort

>>Feb. 3, 1995 -
The decaying area around Disneyland and the Anaheim Convention Center will still receive a major face lift despite the Walt Disney Company's decision this week to scale back plans for a $3-billion resort adjacent to the theme park, city officials said.

The overhaul of the city's infrastructure was said to be vital to Disney's proposal to build a world-class resort with thousands of new hotel rooms, a 5,000-seat amphitheater and a new theme park dubbed "Westcot." The company shelved those plans in favor of a less ambitious project, or one that would be built incrementally.

But the city's revitalization plan--which has a $172-million price tag--is still viewed as critical to keeping Anaheim a magnet for tourist and convention center business.

"The plan is absolutely essential to everyone in the area," said Ned Snavely, general manager of the Anaheim Marriott hotel. "We will have a better-looking area no matter what Disney does."<<

>>
Anaheim Deputy City Manager Tom Wood said that regardless of the kind of project Disney builds, there is "broad consensus" that the infrastructure overhaul and the Convention Center expansion are needed.

*

"We have two very successful businesses: the Convention Center and Disneyland," Wood said. "These things need to be done to support these economic engines. The program is designed to do exactly that."

Both projects are funded in part by a recent increase in the city's hotel bed tax, which was raised from 13% to 15% by the City Council last fall. The increase, which gives Anaheim the third-highest rate in the nation, goes into effect in July and will bring an additional $5 million annually.

That money, combined with 1% of the bed tax already dedicated to Convention Center improvements and an annual $1.6 million from the Convention Center's budget, will bring the total renovation budget to $9.1 million a year. The city would use the money to finance loans that would pay for revitalization efforts and expansion, officials said.

Anaheim is also expecting to receive about $109 million from county, state and federal sources for various transportation and utility projects. City officials have said repeatedly that no general fund money will be used for the projects, nor will taxes or fees be increased.<<

 

[flynnibus]

So to recap.... in 1995 both the City and Disney had scaled back plans that were in retreat... but in 1996 they get together, forge a BOLDER, BIGGER plan that satisfies the city's desires to rework the district, and expand their tourist facilities... and get Disney to commit to a bigger expansion plan, and work on a structure that reduces risk to the city.. while committing to a plan that aims to boost overall city revenues for decades to come.

Yeah, totally Anaheim just rolling over and giving away sweatheart deals they didn't need to because it would have happened anyways... *rolleyes*

 

[Darkbeer1]

First, from July of 1996

http://articles.latimes.com/1996-07-16/news/mn-24723_1_disney-theme-park

>>Seeking to allay worries about an extra burden on Anaheim taxpayers, the Walt Disney Co. and city officials on Monday said hotel bed taxes, sales taxes and state and federal grants would fully finance the $550 million needed to improve streets, landscaping and utilities for an expanded Anaheim Convention Center and a second Disney theme park.

At the same time, Disney officials released more details about the $1.4-billion companion theme park, including plans for a 750-room luxury hotel within the park itself, a night life and shopping district and attractions celebrating Hollywood and California's beach culture.

Anaheim plans to issue nearly $400 million in bonds to finance the improvements and provide $150 million to expand the convention center.

Hotel and sales taxes as well as tourist revenue would pay the interest on the bonds, according to city officials.

In case of a shortfall, Disney would guarantee about $200 million of the debt, agreeing to step in and pay investors if the city can't.<<

And from October, 1996

http://articles.latimes.com/1996-10-09/news/mn-52109_1_disneyland-expansion

>>The city plans to issue $395 million worth of bonds to finance much of the work. Increased revenue from hotel and sales taxes from tourists and property tax revenue generated within the Disneyland Resort area is expected to pay off the bonds. In case of a shortfall in revenue, Disney has guaranteed the bond debt, agreeing to step in and pay investors if the city can't.

City officials insist that the project will not burden city taxpayers and in the end will strengthen the city economically.

The city's tourism area now contributes nearly $11 million a year in tax revenue to city programs. The expansion, coupled with other projects, could boost that by $6.1 million a year, according to a report released by the city last month.<<

 

[George Lucas on a Bench]

"We still have this vision of creating a theme park that will work, but one that would not accommodate as many" visitors as originally outlined, said Disneyland's new president, Paul Pressler.

What an idiot.

 

[Darkbeer1]

Like it or not, the City of Anaheim decided to become a tourism based town (and economy) in the 1960's when they built The Anaheim Arena and Convention Center on Katella, across from Disneyland, and Angel Stadium.

http://visitanaheim.org/blog-post/2017/07/12/anaheim-convention-center-celebrates-50-years

https://en.wikipedia.org/wiki/Angel_Stadium

The Convention Center is 100% city owned and operated, while Angel Stadium was built and owned by the city, and leases the operational rights to the baseball team currently, and the city receives multiple sources of revenue due to the arrangement.

It has also built many other facilities that are tourism related, so they basically became dependent to Disneyland as a partner to bring in tourism to support the entire city, its Hotels, restaurants, shops, etc.

And NOTHING can be done about it, so it is just Stupid to fight with the company that pays the city council's paycheck.

If you grow tourism, then the tax revenue increases, that was the driving force in the 1990's, and the same today.

 

[Disney Irish]

Like it or not, the City of Anaheim decided to become a tourism based town (and economy) in the 1960's when they built The Anaheim Arena and Convention Center on Katella, across from Disneyland, and Angel Stadium.

http://visitanaheim.org/blog-post/2017/07/12/anaheim-convention-center-celebrates-50-years

https://en.wikipedia.org/wiki/Angel_Stadium

The Convention Center is 100% city owned and operated, while Angel Stadium was built and owned by the city, and leases the operational rights to the baseball team currently, and the city receives multiple sources of revenue due to the arrangement.

It has also built many other facilities that are tourism related, so they basically became dependent to Disneyland as a partner to bring in tourism to support the entire city, its Hotels, restaurants, shops, etc.

And NOTHING can be done about it, so it is just Stupid to fight with the company that pays the city council's paycheck.

If you grow tourism, then the tax revenue increases, that was the driving force in the 1990's, and the same today.

Agreed, I find it funny how many try to rewrite history to tell a narrative about the big bad media conglomerate and how bad they are to the city they call home.