LA Times: Is Disney Paying Its Fair Share In Anaheim

[the.dreamfinder]

In today’s LA Times, a detailed recounting of the conflict between Disney and the Anaheim City Council over generous benefits given to Disney by the city, including Mickey and Friends parking structure and the ticket tax freeze, as the city’s finances suffer.

Reporting by Daniel Miller

The Subsidy Kingdom
Part One- Is Disney Paying Its Fair Share In Anaheim?
http://www.latimes.com/projects/la-fi-disney-anaheim-deals/#nt=oft12aH-1la1
How Disney Spends Its Political Funds In Anaheim
http://www.latimes.com/projects/la-fi-disney-anaheim-campaign-finance/
Part Two- How One Election Changed Disneyland’s Relationship With Its Hometown
http://www.latimes.com/projects/la-fi-disney-anaheim-city-council/#nt=oft12aH-1gp2

Additional Resources
City of Anaheim District Map
http://www.anaheim.net/DocumentCenter/View/11401
Ethnicity Data with Maps
http://www.anaheim.net/DocumentCenter/View/11369
https://statisticalatlas.com/place/California/Anaheim/Race-and-Ethnicity
1991 Disneyland Resort Master Plan and The Story of Westcot’s Undoing by Sam Gennaway
Part One-
http://samlanddisney.blogspot.com/2009/08/plausible-impossible-westcot-center-and.html
Part Two-http://samlanddisney.blogspot.com/2009/08/plausible-impossible-westcot-center-and_17.html
Part Three-http://samlanddisney.blogspot.com/2009/08/plausible-impossible-westcot-center-and_24.html
Part Four-http://samlanddisney.blogspot.com/2009/08/plausible-impossible-westcot-center-and_31.html
Part Five-http://samlanddisney.blogspot.com/2009/09/plausible-impossible-westcot-center-and.html
Part Six-http://samlanddisney.blogspot.com/2009/09/plausible-impossible-westcot-center-and_14.html
Part Seven-http://samlanddisney.blogspot.com/2009/09/plausible-impossible-westcot-center-and_21.html

 

[George Lucas on a Bench]

I have to give Disney credit for managing to have a $1 lease on the parking garage.

 

[Travel Junkie]

Well thought out article. Anaheim would not exist as it does today without Disney, but it has taken advantage at times of the situation. The parking structure deal was highway robbery. I'm sure that played a role in why Disney kept kicking the can on the Eastern Gateway project. They had always gotten their way so why not hold off until it was absolutely necessary. Now that there is opposition they are in trouble.

One thing I didn't see covered in the article was how much Disney gives to the local community through charities. Sure Disney gets a lot of goodwill out of it, but they raise a lot of money for CHOC and other organizations. If they directed some of that charity towards homelessness which is a big problem in Anaheim and other local problems, it would go a long way in repairing the relationship with the city.

I hope they can work out the parking situation, because at the end of the day if it isn't resolved, everyone loses.

 

[Deleted member 107043]

The parking structure deal was highway robbery. I'm sure that played a role in why Disney kept kicking the can on the Eastern Gateway project. They had always gotten their way so why not hold off until it was absolutely necessary.

I agree. This is why it's unlikely that Disney will ever build a third park in Anaheim. The political situation between Disney and Anaheim as explained in the article could also be the reason why there's been no new hotel investment at DLR since the GCH opened.

This 2015 quote from Michael Colglazier is a little troubling.

Colglazier, the Disneyland Resort president, made his case: “What we are trying to determine right now though is the scale of the next investment, as well as the viability of Anaheim for future expansions relative to other Disney parks around the world.”

Granted he made this statement before Disney ultimately agreed to invest $2 billion at DLR over the next decade, but if that's Disney attitude it's no surprise that the company relies so heavily on a steady stream of APs and seasonal events in Anaheim while investing more heavily at the resorts in Florida and Asia. Makes me wonder if the tepid offerings announced for DLR's pipeline at D23 was partially a political move.

 

[the.dreamfinder]

We’ll see if it’s discussed in part two, but I’m surprised more wasn’t made of the negotiations to get Anaheim the second gate as it competed with the Long Beach/DisneySea project and how TWDC used the competition between the municipalities to get the best deal. Certainly not disimilar to what professional sports teams now do to secure public financing for sports arenas.

 

[the.dreamfinder]

One thing I didn't see covered in the article was how much Disney gives to the local community through charities. Sure Disney gets a lot of goodwill out of it, but they raise a lot of money for CHOC and other organizations. If they directed some of that charity towards homelessness which is a big problem in Anaheim and other local problems, it would go a long way in repairing the relationship with the city.

It’s there.
Disney also said it is the city’s largest contributor to local philanthropic endeavors, addressing issues including hunger, public health and education. The company said that in the last year, Disneyland Resort has given nearly $20 million to nonprofits that are mostly in Orange County, including more than $4 million to various causes in Anaheim. Among them is ACT Anaheim, an initiative Disney co-founded, that provides grants to nonprofits in the community.

“I have never seen a corporation that has taken so to heart their commitment to the surrounding community,” said Shelley Hoss, president of the Orange County Community Foundation, which manages ACT.

 

[Travel Junkie]

It’s there.
Disney also said it is the city’s largest contributor to local philanthropic endeavors, addressing issues including hunger, public health and education. The company said that in the last year, Disneyland Resort has given nearly $20 million to nonprofits that are mostly in Orange County, including more than $4 million to various causes in Anaheim. Among them is ACT Anaheim, an initiative Disney co-founded, that provides grants to nonprofits in the community.

“I have never seen a corporation that has taken so to heart their commitment to the surrounding community,” said Shelley Hoss, president of the Orange County Community Foundation, which manages ACT.

Missed that. Thanks

 

[TP2000]

That the title of the article used the tired Marxist phrase "fair share" already has me chuckling. What a pithy, feel good Sunday article this is for those who find private industry distasteful.

If the author has the guts to question whether Disneyland is paying a "fair share" in taxes, then the author should put a dollar figure on what he thinks that "fair share" is currently.

At least this author, unlike many modern "journalists" who trot out that concept against private industry, had the guts to detail what Disneyland does for the City of Anaheim in tax dollars per year;

Anaheim Resort District = $172 Million in taxes directly to Anaheim, which is 43% of Anaheim's general fund annually.
Walt Disney Company = $125 Million in taxes, levies, fees, bonds, contracts to Anaheim annually.
Disneyland Philanthropy = $4 Million to non-profits and community groups based in Anaheim annually (additional $16 Million in Orange County).

43% of the city's tax revenue comes from Disneyland, who employs 19% of Anaheim's workers! Anaheim's parks, libraries, police, streets, schools, utilities, public services, etc. are paid by Disneyland each year to the tune of 43% on 19% of the employment. That's huge!

So Disneyland pays $125 Million directly to Anaheim directly each year, plus another $4 Million in happy-shiny philanthropy. They build playgrounds, they host free outdoor movie series in parks, they donate big bucks to local Boys & Girls clubs, they donate big bucks to provide free guide dogs to disabled Anaheim residents on limited incomes, etc., etc., etc.

And if Walt Disney had chosen Pomona instead of Anaheim back in 1953, 21st century Anaheim would now just be Stanton with better freeway access. Anaheim's 1966 convention center and stadium never would have been built, and likely would have landed in Irvine or Costa Mesa in the 1970's instead.

If all that is not considered a "fair share", then what is? Should Disneyland pay 60% of Anaheim's tax bill each year? 75%? 95%? If 43% of the bill is not considered fair, then what is that figure? No one who ever questions private industry's impact on a local community ever seems willing or able to tell us what that share should actually be.

 

[TP2000]

So, now that I got my "Yay For American Free Enterprise!" rant off my chest (and it works better if you play the Battle Hymn of the Republic in the background while you read it)...

That parking lot deal Eisner secured in the 1990's seems like an unnecessary weight around Disneyland's neck. It was a typically smarmy 1990's tax deal that was common in the 1980's and 90's and certainly not exclusive to Disney or Anaheim. But 20 years later shifty Anaheim politicians and shiftier LA Times journalists can use it as the big glaring example of how Disney isn't paying their fair share.

Chapek and Iger should just write a check to Mayor Tom Tait for the total of $200 Million, the $110 Million cost of the structure in 1999 plus a 5% return, and have Disney buy that structure and land outright for good. If Mayor Tait was smart he'd take the $200 Million and help pay down the $600 Million in unfunded police pensions he has through no fault of Disney and move on with his civic life.

With that stupid Mickey & Friends Parking Structure taken off the table and out of the political debate, we can let folks rant against the 43% of the tax dollars Disneyland brings in to Anaheim coffers every year and see how far they get with that argument. Not far, I'd bet.

 

[mickEblu]

Why wouldn't Disney do the 1$ tax on the ticket sales and throw Anaheim a bone and build some good favor? They raise prices on us every year. Couldnt they just bake it in? Am i missing something?

 

[Hakunamatata]

Why wouldn't Disney do the 1$ tax on the ticket sales and throw Anaheim a bone and build some good favor? They raise prices on us every year. Couldnt they just bake it in? Am i missing something?

What are the administrative costs of collecting and paying taxes to a government entity? Donthey increase with an increase in tax?

 

[mickEblu]

What are the administrative costs of collecting and paying taxes to a government entity? Donthey increase with an increase in tax?

I honestly have no idea. But you re probably on the right track.

 

[EricsBiscuit]

I don't think that governments should be giving subsidies at all. However it's laughable that the Anaheim City Council is anti Disney.

 

[Deleted member 107043]

f all that is not considered a "fair share", then what is?

I would ask how other municipalities with large revenue generating tourist attractions handle these kinds of businesses in their communities. San Francisco refused to give the Giants any concessions and they ended up building AT&T Park without a dime from the City. The same for the new Chase Arena the Warriors currently have under construction here. Just because Disney generates a mountain of tax revenue for Anaheim doesn't mean that the city hasn't agreed to a one-sided tax deal with Disney. Obviously there are two sides to this, but it is absurd that Disney is allowed to collect 100% of the revenue on a humongous parking structure that it didn't even pay for.

With that stupid Mickey & Friends Parking Structure taken off the table and out of the political debate, we can let folks rant against the 43% of the tax dollars Disneyland brings in to Anaheim coffers every year and see how far they get with that argument. Not far, I'd bet.

LOL, you know Disney would never think of paying for the parking structure unless they were trying to leverage a deal for some other new investment in Anaheim. The deal they've got right now is way too sweet.

 

[shortstop]

I would ask how other municipalities with large revenue generating tourist attractions handle these kinds of businesses in their communities. San Francisco refused to give the Giants any concessions and they ended up building AT&T Park without a dime from the City. The same for the new Chase Arena the Warriors currently have under construction here. Just because Disney generates a mountain of tax revenue for Anaheim doesn't mean that the city hasn't agreed to a one-sided tax deal with Disney. Obviously there are two sides to this, but it is absurd that Disney is allowed to collect 100% of the revenue on a humongous parking structure that it didn't even pay for.



LOL, you know Disney would never think of paying for the parking structure unless they were trying to leverage a deal for some other new investment in Anaheim. The deal they've got right now is way too sweet.

If the city feels it is being robbed on the parking structure, isn't that their own fault for not negotiating a better deal for itself in the first place?

 

[Deleted member 107043]

If the city feels it is being robbed on the parking structure, isn't that their own fault for not negotiating a better deal for itself in the first place?

Yep, it sure is. That said it's also good journalism to raise questions about it. Maybe the citizens of Anaheim are fine with it, but it certainly seems like the city has given away too much to Disney, at least in that particular instance.

 

[choco choco]

And if Walt Disney had chosen Pomona instead of Anaheim back in 1953, 21st century Anaheim would now just be Stanton with better freeway access. Anaheim's 1966 convention center and stadium never would have been built, and likely would have landed in Irvine or Costa Mesa in the 1970's instead.

Idiotic. Cerritos, Fullerton, Westminster and Garden Grove all are in close proximity to Anaheim, not to mention the two cities you mentioned, and they've all done pretty well for themselves. Who knows how Anaheim would have fared in the 60 years if Disney hadn't arrived. Maybe they prosper like the cities I mention, maybe they don't prosper like the cities you so dismissively mention.

If the argument is that Anaheim outside the resort district isn't doing well, then the answer seems to be to do the opposite of what previous city governments have done, and tax Disney more heavily.

 

[DisneyDrum]

For anyone who still looks at the paper version of the LA Times - this was Sunday main front page story. It's not a good look for Disney.

I have no idea what a fair tax rate is for Disney, but the "30 years of no additional taxes/fees for $1 billion in investment" deal doesn't look good. It's a lot of development that probably would have happened anyway, bundled to limit taxes on a corporation and voted for by politicians who took lots of Disney campaign cash.

Also note that the 43% figure is for the resort district as a whole, not just Disney.

This negative press is not a good sign for getting the new parking garage approved...

 

[Travel Junkie]

If the author has the guts to question whether Disneyland is paying a "fair share" in taxes, then the author should put a dollar figure on what he thinks that "fair share" is currently.

I took it as reporting the information and letting the reader form an opinion over it being an opinion piece.

If I was on the Anaheim City Council, I would be worried about the reliance on Disney, Angels, and Ducks. You have so much of your tax revenue reliant on companies whose customers drive in, consume the product, and leave. Most do not stay around after a sporting event and spend more money in the city. Most Disneyland visitors are So Cal locals who drive in, clog up the streets, and leave without spending much outside of Disney.

The city should stop playing politics and look for ways to make Anaheim more of a long term destination. Work with Disney to try and turn the city into a place where people stay for multiple days and consume more than just Disney. At least Buena Park has tried to get people to stay outside of Knott's, even if the results didn't pan out. Anaheim should be attracting other must see attractions to make the city a place to stay. Instead they let Disney's money flow in and then criticize the goose than laid the golden egg.

Disney brings in thousands of job, but most of the vast majority are low paying. The city should be trying to attract more companies that have high paying jobs to offset the low wages of Disney and the surrounding businesses that rely on low paying customer service jobs. There are so many poor people in the city, because there is a lack of quality high paying jobs. The majority of the corporate higher paying jobs are in Irvine and points south.

 

[Deleted member 107043]

This negative press is not a good sign for getting the new parking garage approved...

Or it will force Disney to forgo trying to press for any favorable deals and just build the damn thing already using its own financial resources. It's not like the company can't afford it.