ANAHEIM –
A divided City Council voted Tuesday night to offer hefty room-tax breaks to developers wanting to build luxury resorts in an attempt to attract larger conventions and high-spending tourists.
Several representatives from local labor unions and businesses said that subsidizing high-end hoteliers would generate additional revenue and jobs for the city.
Opponents, including Mayor Tom Tait, said that room taxes would be kept by hotel developers – rather than going back to Anaheim’s coffers to help pay for police, parks, road repairs and other city services. Hotel taxes, projected to be $133 million during the next fiscal year that begins July 1, account for nearly half of the city’s general fund revenue.
“We are giving checks to hotel developers, but we have better needs for our money,” said Tait, who voted against the plan with Councilman James Vanderbilt.
“Our tax money is to use for the neighborhoods, not to give back to the hotel developer,” Tait said. “We have needs more than luxury hotels. It makes no sense.”
Under the plan, developers of hotels that meet AAA’s guidelines for four-diamond ratings would get to keep 70 percent of their bed taxes for up to 20 years. Of the remainder, 10 percent of the taxes would go to city coffers, while 20 percent would pay off bonds that funded improvements to Anaheim’s city resort district in 1996.
Existing hoteliers wanting to overhaul their current properties to meet the higher-quality standards would receive a lesser subsidy.
The City Council would need to sign off on any specific agreements with hoteliers wanting to build the upscale hotels in Anaheim.
Room-tax subsidies were not needed to build luxury, four-diamond hotels in Newport Beach, Costa Mesa, Laguna Beach, Dana Point and Huntington Beach. However, Santa Barbara County, Palm Springs and Los Angeles have offered incentives to build hotels in recent years.
Garden Grove gave a $47 million incentive to developer McWhinney Enterprises, along with 12 acres along Harbor Boulevard, to build the $250 million Great Wolf Lodge Southern California water park, a three-star hotel that’s set to open next year.
For now, the Disneyland Hotel and Disney’s Grand Californian Hotel & Spa are the only hotels in Anaheim that meet AAA’s four-diamond rating.
“Business people don’t want to go to these hotels at the Disney parks with screaming kids,” said Councilwoman Lucille Kring, who voted in support of the subsidy plan with Councilman Jordan Brandman and Councilwoman Kris Murray.
“We are losing those customers,” Kring said. “We need those rooms so that they don’t leave the city.”
