https://www.ocweekly.com/principal-author-of-anaheims-living-wage-law-says-disneys-not-exempt/
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Attorney Richard McCracken, the principal author of the living wage initiative, is unconcerned with last week’s vote. He points to a Disneyland expansion deal passed by council in 1996 to argue that the ordinance, known as Measure L on the ballot, still very much applies to the corporation. Two decades ago, another unanimous vote by Anaheim council members laid the foundation for the resort as tourists and locals know it today. To get there, the city issued $510 million in bonds for area improvements and projects, including expansion of the Anaheim Convention Center and construction of the enormous Mickey & Friends parking structure. In exchange, Disney invested $1.4 billion in opening California Adventure, the Grand Californian Hotel, and Downtown Disney.
“This was not a second look or a revisiting of the question,” McCracken tells the Weekly. “When the initiative was drafted, the 1996 agreement had been studied. We fully intended that the 1996 agreement by itself, without regard to the other agreements, was more than enough to cover Disney. It’s a subsidy of great magnitude.”
The city continues to pay off the massive bonds through hotel, sales and property taxes generated by the Disneyland Resort until 2037–it also skims a percentage of bed-taxes throughout the city. That’s the same year Anaheim turns over ownership of the Mickey & Friends parking lot it spent $108 million building and rents to Disney for $1 per year. “Bonds bear interest,” reminds McCracken. Oh, do they ever. According to projections on the city’s website, the total debt service (principal plus interest) from the overall deal tops $1.1 billion by 2037.
Disney deferred the Weekly‘s questions to the city regarding its legal standing under the proposed living wage ordinance after last week’s vote. “Reading the initiative, it calls out tax rebates and the entertainment tax policy but doesn’t appear to directly call into question the public-private partnership of the 1996 agreement,” says Mike Lyster, Anaheim spokesman. “But we do not have a definitive legal determination at this point.”<<
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In the living wage ordinance, a “city subsidy” is defined as “any agreement with the city pursuant to which a person other than the city has a right to receive a rebate of transient occupancy tax, sales tax, entertainment tax, property tax or other taxes, presently or in the future, matured or unmatured.” The hotel subsidy and entertainment tax policy both had Anaheim ready to write checks to Disney, but does the bond financing of the ’96 deal qualify as a tax rebate? “Disney is paying the same amount of taxes it would without the agreement but a large part of those taxes is going back to Disney in the form of payments on the bonds issued by the city to finance the construction of the Disney’s California Adventure,” says McCracken. “That is a rebate because Disney is getting the economic value of that part of the taxes, not the city. ”
With that, it comes down to just three simple questions. “Was there a tax rebate?” McCracken asks. “Yes. Was that tax rebate for the purpose of subsidizing its private enterprise? Yes, it was. Is that tax rebate to subsidize the private enterprise still in effect. The answer is yes.”
The San Francisco-based attorney knows a thing or two about how living wage ordinances work. He first heard the term “living wage” from former Baltimore mayor Kurt Schmoke, a progressive Democrat who signed into law one of the first such measures in 1994. Three years later, McCracken helped author a living wage ordinance for Los Angeles that passed into law and applied to government contractors. “That was a groundbreaking one,” he says. “That drew a lot of attention.” Various other municipalities began to follow suit. McCracken’s been involved in the drafting of a dozen or so like-minded efforts, including a state constitutional amendment in Nevada providing a minimum wage higher than the federal rate. <<
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Attorney Richard McCracken, the principal author of the living wage initiative, is unconcerned with last week’s vote. He points to a Disneyland expansion deal passed by council in 1996 to argue that the ordinance, known as Measure L on the ballot, still very much applies to the corporation. Two decades ago, another unanimous vote by Anaheim council members laid the foundation for the resort as tourists and locals know it today. To get there, the city issued $510 million in bonds for area improvements and projects, including expansion of the Anaheim Convention Center and construction of the enormous Mickey & Friends parking structure. In exchange, Disney invested $1.4 billion in opening California Adventure, the Grand Californian Hotel, and Downtown Disney.
“This was not a second look or a revisiting of the question,” McCracken tells the Weekly. “When the initiative was drafted, the 1996 agreement had been studied. We fully intended that the 1996 agreement by itself, without regard to the other agreements, was more than enough to cover Disney. It’s a subsidy of great magnitude.”
The city continues to pay off the massive bonds through hotel, sales and property taxes generated by the Disneyland Resort until 2037–it also skims a percentage of bed-taxes throughout the city. That’s the same year Anaheim turns over ownership of the Mickey & Friends parking lot it spent $108 million building and rents to Disney for $1 per year. “Bonds bear interest,” reminds McCracken. Oh, do they ever. According to projections on the city’s website, the total debt service (principal plus interest) from the overall deal tops $1.1 billion by 2037.
Disney deferred the Weekly‘s questions to the city regarding its legal standing under the proposed living wage ordinance after last week’s vote. “Reading the initiative, it calls out tax rebates and the entertainment tax policy but doesn’t appear to directly call into question the public-private partnership of the 1996 agreement,” says Mike Lyster, Anaheim spokesman. “But we do not have a definitive legal determination at this point.”<<
>>
In the living wage ordinance, a “city subsidy” is defined as “any agreement with the city pursuant to which a person other than the city has a right to receive a rebate of transient occupancy tax, sales tax, entertainment tax, property tax or other taxes, presently or in the future, matured or unmatured.” The hotel subsidy and entertainment tax policy both had Anaheim ready to write checks to Disney, but does the bond financing of the ’96 deal qualify as a tax rebate? “Disney is paying the same amount of taxes it would without the agreement but a large part of those taxes is going back to Disney in the form of payments on the bonds issued by the city to finance the construction of the Disney’s California Adventure,” says McCracken. “That is a rebate because Disney is getting the economic value of that part of the taxes, not the city. ”
With that, it comes down to just three simple questions. “Was there a tax rebate?” McCracken asks. “Yes. Was that tax rebate for the purpose of subsidizing its private enterprise? Yes, it was. Is that tax rebate to subsidize the private enterprise still in effect. The answer is yes.”
The San Francisco-based attorney knows a thing or two about how living wage ordinances work. He first heard the term “living wage” from former Baltimore mayor Kurt Schmoke, a progressive Democrat who signed into law one of the first such measures in 1994. Three years later, McCracken helped author a living wage ordinance for Los Angeles that passed into law and applied to government contractors. “That was a groundbreaking one,” he says. “That drew a lot of attention.” Various other municipalities began to follow suit. McCracken’s been involved in the drafting of a dozen or so like-minded efforts, including a state constitutional amendment in Nevada providing a minimum wage higher than the federal rate. <<
