Disney pulls the plug on new Disneyland hotel

[LAS2AMS]

https://www.ocregister.com/2018/10/10/disney-announces-its-pulling-the-plug-on-anaheim-luxury-hotel/

Disney has announced it will it not proceed with plans to build a new luxury hotel in Anaheim. Basically, Anaheim had agreed to a large, long-term tax incentive package to help Disney finance the project, but after the LA Times wrote (what Disney described as a hit piece) an article calling out the project, public uproar ensued and a new city council used a quirk to cancel the incentive package.

The article says that Disney will work quickly to re-open the closed establishments (AMC Theaters, Rainforest Cafe and ESPN Zone), although it wouldn’t be shocking if they received new tenants.

In other news, an ice cream creamery will open in DTD tomorrow. Between that, Sprinkles and Disney’s own bakery, it will be difficult not to get fat if you come here often. Then again, Sprinkles charges $1.50 more per cupcake than the locations in Beverly Hills and Newport Beach, which is reason itself not to spend money there...

https://www.ocregister.com/2018/10/...raw-in-downtown-disney-opening-friday-oct-12/

 

[Krandor]

Can we get rundisney back now?

 

[BrianL]

Can we get rundisney back now?

We got Earl back at least! Man though, all of those businesses that were forced to leave...they better have a plan for filling that area with something.

 

[Krandor]

We got Earl back at least! Man though, all of those businesses that were forced to leave...they better have a plan for filling that area with something.

Makes you wonder how many will come back. I know AMC was building new theater in the general area so they might be iffy. You would think places like Earl and Rainforest would unless they don't like how this all was handled.

Seriously though.. what a mess. This went from eastern gateway project to this plan to now nothing except for I guess the parking deck. Hopefully the city council got what they wanted. Disney gets no tax breaks but they lose the tax income they would have gotten from the new hotel.

 

[BrianL]

Makes you wonder how many will come back. I know AMC was building new theater in the general area so they might be iffy. You would think places like Earl and Rainforest would unless they don't like how this all was handled.

Seriously though.. what a mess. This went from eastern gateway project to this plan to now nothing except for I guess the parking deck. Hopefully the city council got what they wanted. Disney gets no tax breaks but they lose the tax income they would have gotten from the new hotel.

Well, Earl is already back and operating, hopefully for good. The AMC was moving to Garden Walk, and I would be they still will. That's a huge building! I could see Rainforest maybe coming back, but they probably already gutted the place, so I don't know.

 

[adam.adbe]

Seriously though.. what a mess. This went from eastern gateway project to this plan to now nothing except for I guess the parking deck. Hopefully the city council got what they wanted. Disney gets no tax breaks but they lose the tax income they would have gotten from the new hotel.

How much extra tax income would they have got? Anaheim never seems to be short of hotel capacity, so its possible this would just have forced other players to either lower rates, or pack up shop.

 

[rteetz]

How much extra tax income would they have got? Anaheim never seems to be short of hotel capacity, so its possible this would just have forced other players to either lower rates, or pack up shop.

This was about Anaheim attracting luxury hotels which they don't have a lot of.

 

[Krandor]

This was about Anaheim attracting luxury hotels which they don't have a lot of.

Just as long as it wasn't one at disney.

It will be interesting to see how the election goes this year in anaheim especially with the mayor being termed out.

 

[manning]

Makes you wonder how many will come back. I know AMC was building new theater in the general area so they might be iffy. You would think places like Earl and Rainforest would unless they don't like how this all was handled.

Seriously though.. what a mess. This went from eastern gateway project to this plan to now nothing except for I guess the parking deck. Hopefully the city council got what they wanted. Disney gets no tax breaks but they lose the tax income they would have gotten from the new hotel.

Why would a extremely large corporation need a tax break? Like they need it.

 

[rteetz]

Why would a extremely large corporation need a tax break? Like they need it.

Why does any corporation need it? They all look for them that’s how businesses operate. It’s nothing new or uncommon. It’s less they have to spend.

 

[manning]

Why does any corporation need it? They all look for them that’s how businesses operate. It’s nothing new or uncommon. It’s less they have to spend.

That I know. Looking at it as a tax payer. Look at NFL they make tons of money and want a break. We need more tax payers to complain

 

[LAS2AMS]

Here’s the LA Times take on the situation; keep in mind that as noted above, the paper has been the biggest critic of the project:

www.latimes.com/business/la-fi-disneyland-hotel-canceled-20181010-story.html%3foutputType=amp

Makes you wonder how many will come back. I know AMC was building new theater in the general area so they might be iffy. You would think places like Earl and Rainforest would unless they don't like how this all was handled.

The LA Times article quotes a Disney spokesperson as saying they have no immediate plans for the closed area. An earlier OC Register article regarding Earl of Sandwhich’s reopening noted that much of the other closed businesses had been gutted and weren’t likely to reopen soon.

I certainly wouldn’t mind if a Cinepolis Theater replaced the AMC . And honestly, I can’t imagine Disney reopening ESPN Zone.

 

[rteetz]

That I know. Looking at it as a tax payer. Look at NFL they make tons of money and want a break. We need more tax payers to complain

I’m just confused as what there is to complain about. Less tax breaks for corporations sure but they are never going to not get any tax breaks. That’s how our economy and government works and will continue to do so. Is it right or wrong? That’s a debate probably not best for this board.

 

[Krandor]

I’m just confused as what there is to complain about. Less tax breaks for corporations sure but they are never going to not get any tax breaks. That’s how our economy and government works and will continue to do so. Is it right or wrong? That’s a debate probably not best for this board.

And in this case it isn’t like they were handing Disney a check. Is was that for 20 years the tax rate would be lower. The city would still get tax revenue Just not as much. Now they get zero. The city hasn’t saved themselves money (as compared to a city building a stadium) they can use for something else. They completely lose that revenue now.

My prediction is nothing changes in regards to the site or dnd until after the election and then Disney will approach them with a new deal with hopes the new council will he more willing to listen.

 

[LAS2AMS]

And in this case it isn’t like they were handing Disney a check. Is was that for 20 years the tax rate would be lower. The city would still get tax revenue Just not as much. Now they get zero. The city hasn’t saved themselves money (as compared to a city building a stadium) they can use for something else. They completely lose that revenue now.

My prediction is nothing changes in regards to the site or dnd until after the election and then Disney will approach them with a new deal with hopes the new council will he more willing to listen.

Here’s part one of the LA Times article, which explains the opposition view point (link to part 2 is at the end of the article). Disney called it a hit piece, and retaliated by briefly banning the LA Times from screening its movies.

http://www.latimes.com/projects/la-fi-disney-anaheim-deals/

Basically, the opposition believes the deal the Disney struck with Anaheim in the 1990s to fund the expansion of the Anaheim Resort hurt taxpayers while benefiting Disney. They feel that Disney would eventually expand the Disneyland Resort, anyway, without taxpayer subsidies (because it’s reaching capacity which means greater profit can be earned by expanding capacity).

 

[OSUZorba]

And in this case it isn’t like they were handing Disney a check. Is was that for 20 years the tax rate would be lower. The city would still get tax revenue Just not as much. Now they get zero. The city hasn’t saved themselves money (as compared to a city building a stadium) they can use for something else. They completely lose that revenue now.

My prediction is nothing changes in regards to the site or dnd until after the election and then Disney will approach them with a new deal with hopes the new council will he more willing to listen.

Except they removed a ton of sales tax producing store fronts to make room for it. Cities generally get the majority of their revenue from sales tax.

At the end of the day, if a project doesn't make sense without tax breaks, it probably doesn't make sense at all. Disney is just throwing a fit like every other corporation does when they don't get their way. If the project actually makes sense they'll do it any ways down the road a bit after they are done throwing their fit or they dump enough money into local politicians to get want they want.

 

[Krandor]

Except they removed a ton of sales tax producing store fronts to make room for it. Cities generally get the majority of their revenue from sales tax.

At the end of the day, if a project doesn't make sense without tax breaks, it probably doesn't make sense at all. Disney is just throwing a fit like every other corporation does when they don't get their way. If the project actually makes sense they'll do it any ways down the road a bit after they are done throwing their fit or they dump enough money into local politicians to get want they want.

So do the other 4 star hotels being build because of the tax subsidy that wouldn’t be built without the subsidy also then not make sense at all since they are only being built because of the subsidy?

 

[OSUZorba]

So do the other 4 star hotels being build because of the tax subsidy that wouldn’t be built without the subsidy also then not make sense at all since they are only being built because of the subsidy?

I'm not going to get into a political debate here, but in general subsidies are not enough to make or break a project. And if they are, they are a terrible deal for the city, like sports stadiums. But companies will often refuse to build without them to keep the gravy train coming.

It really doesn't make sense for the city when you are removing a lot of revenue generating businesses and offsetting much of employment gain.

 

[LAS2AMS]

So do the other 4 star hotels being build because of the tax subsidy that wouldn’t be built without the subsidy also then not make sense at all since they are only being built because of the subsidy?

Yes, the subsidies make sense because these hotels would not have otherwise been built. Ultimately, lenders and investors seek to maximize their ROI, and given the costs in Anaheim vs. expected revenues (which are generally lower than the state averages), they’d build elsewhere. Yet Ahaheim believes the luxury hotels will attract affluent vacationers who spend more than the average traveler, thereby injecting a level of income into the economy that offsets the subsidies over the long-term.

But the problem with Disney is that they would’ve likely built the new hotel, anyway. They already own the property, so they’re shielded from the exorbitant real estate costs. Their existing properties run near 100% occupancy much of the year... and attendance continues to rise, meaning there’s greater rooming potential.

The problem, of course, is Disney will argue it’s competing for the same travelers as the subsidized property but the subsidized property can offer artificially lower rates than Disney can, dragging room rates down. The opposition will argue that Disney being Disney is inherent to attracting a certain type of traveler willing to pay a premium for the full Disney experience. And then there’s lots of lingering sour grapes over the 1990s deal between the city and Disney...

Kinda a damned if you do, damned if you don’t situation.

 

[freddyfreak1999]

I hope when the project is rebooted it will be rebooted in a different location.