Anaheim council hears opposition to hotel subsidy

From The OC Register (with Save Anaheim commentary):

ANAHEIM – Several hours of debate continued late Tuesday night over a revised $158 million bed-tax subsidy to assist the developer of two new luxury hotels at The Shops at Anaheim GardenWalk.

As of 9:30 p.m., the City Council had not reached a decision about the tax incentive, mostly due to the dozens of residents who spoke against the plan. If the plan is approved, developer Bill O'Connell Sr., will receive 70 percent of the project's room taxes from when the first hotel opens in 2016 through 2042, or until he has been paid $158 million. Ten percent of the occupancy taxes generated by the anticipated four-star-caliber hotels would be placed in the city's coffers, while the remaining 20 percent would pay off bonds that funded improvements to Anaheim's resort district in 1997.

"Handing over $158 million is not only unfair to other hotel operators that are paying the bed tax, it is especially unfair to the residents of Anaheim," Rick Skinner of Anaheim told the council during public comment.

Other opponents, such as Yesenia Rojas of Anaheim, said any bed-tax revenues raised by the two hotels should be spent on helping the residents of Anna Drive, where a police-involved shooting last summer sparked days of unrest downtown.

"We have been told there are not enough community programs to help our Anna Drive neighborhood, but you have $158 million of our money to give away without helping out the poorest area of Anaheim," Rojas told the council.

An Orange County Superior Court judge ruled in December that the council violated the state's open-meeting law when it narrowly approved a $158 million subsidy that would have allowed the GardenWalk hotel developer to keep 80 percent of the project's bed taxes for up to 15 years, with the remaining 20 percent going toward the resort-bond debt and nothing set aside for the city's general budget.

"I would not have voted for it last year, but this plan is different," Anaheim City Councilwoman Lucille Kring said. How is this plan different? It is the same $158 million GIVEAWAY with no community benefits.

O'Connell and city staffers said the subsidy is needed so that Anaheim can compete with surrounding cities that lure high-spending tourists wanting to stay in luxury hotels.

"The people who are opposed to this act like the city is writing a check to me," said O'Connell, who plans on spending $283 million to build the hotels. That is a lie Mr. O'Connell. The City of Anaheim will write a check over the duration of the agreement directly to you.

"This is a completely different plan that I believe is win-win for the project and the city because no revenue is coming out of this until the hotels get built," O'Connell said. "We want to move forward, build these hotels, create some jobs and generate some revenue for the city." This is the same plan Mr. O'Connell.