ANAHEIM, Calif._Amid growing animosity between Anaheim and Walt Disney Co., the president of the media giant's Disneyland Resort asked the city to end all tax incentive deals in hopes of promoting "cooperation and goodwill."
In a letter sent to Anaheim's mayor and city council, Disneyland Resort President Josh D'Amaro said he was calling for the end to two tax incentive agreements as a way to improve the company's relationship with the city and its residents.
"Unfortunately in Anaheim, these policies have become divisive, leading to an unstable business climate and a difficult working relationship with the city," D'Amaro said in a letter dated Aug. 21.
Anaheim Mayor Tom Tait, who has opposed tax breaks for the theme parks, called the request a "bold move" and said he is looking forward to working more cooperatively with Disney in the future.
Disneyland Resort benefits from two agreements with Anaheim.
One prohibits the city from adopting an entertainment tax on the price of admission in exchange for the resort's promise to invest at least $1 billion by 2024. The Star Wars: Galaxy's Edge expansion, slated to open next year, meets the resort's $1-billion obligation under that 2016 deal. Disney California Adventure Park already has announced plans to build another expansion, featuring the superheroes of Marvel comics and movies.
The second tax benefit, also adopted in 2016, would give the resort a $267-million rebate on the city's hotel tax if Disney builds a luxury hotel. The Disneyland Resort drew up plans to build the hotel, which was set to open in 2021, but learned last week that, according to the Anaheim city attorney, the hotel project doesn't qualify for the break because Disney moved the location of the project after the deal was reached.
Disney representatives then put a hold on the hotel plan and complained that the project still should qualify for the break, despite relocating by only about 1,000 feet from its original location.
Tait said the City Council probably would need to take formal action to end the two tax agreements, but he called such a move a formality, considering Disney now has said it doesn't want the incentives.
Disneyland Resort has been taking heat in the past few months from its workers union, which says the Burbank-based media giant doesn't pay its employees enough for them to cover basic necessities.
A coalition of unions for resort workers collected enough petition signatures to place on the Nov. 6 ballot a measure that requires all large hospitality businesses that receive a tax subsidy from Anaheim _ including Disneyland Resort _ to pay a living wage to all workers.
By ending both tax incentive agreements, Disney appears to ensure that the ballot measure _ if approved _ won't apply to the resort.
The ballot measure would call for an immediate salary increase to a minimum of $15 an hour, with a $1 hourly increase each Jan. 1 until 2022. If the measure applies to Disneyland Resort, it would mean the pay raise would apply to all 30,000 resort employees who now earn less than $15 an hour.
Disneyland representatives point out that the resort already has approved a contract with four of its largest unions to raise hourly wages by as much as 20 percent immediately and an additional 13 percent in January.
The contract agreement approved by Disney and the unions increased the minimum hourly rate of $11 for those union employees to $13.25 immediately and will raise it to $15 starting in January. An increase to $15.50 an hour is slated for June 2020.
Disney insists that the call to end all tax incentive agreements with Anaheim is a move to improve relationships with the city, not to avoid paying higher wages.
"We want to reset the relationship," Disney spokeswoman Lisa Haines said.
Business leaders in Anaheim say the growing animosity between the city and the resort is likely to hurt business in Anaheim over the long haul.
"We fear for Anaheim's long-term fiscal health if the city continues to turn its back on attracting future Disney investment," said Todd Ament, president of the Anaheim Chamber of Commerce, which has joined a coalition to oppose the living wage ballot measure.
