Anaheim Faces Off Against Disneyland Over 'Gate Tax'
The City of Anaheim will hold a public hearing today about a proposal from Disney: Disney will invest $1 billion into their parks and the surrounding area if Anaheim agrees to not to give them any new taxes for the next 30 years.Since 1996, Disney has been exempt from paying a "gate tax," or a tax on their ticket sales. When that deal was made, it was to be for 20 years. So, with the end of that tax coming up in June of 2016, Disney is looking to renew the exemption, KPCC reports.
Disney is a huge draw to Anaheim, bringing in 25.4 million guests annually and providing Anaheim with $148 million in property and business taxes and sales. That's not to mention the 28,000 people who are employed by Disney, according to Reuters.
If Anaheim agrees to continue the exemption, Disney says it would do its part by investing $1 billion into their parks and the surrounding area. This money would be used in part to expand both Disneyland and California Adventure. Given that Disney now has the rights to Lucasfilms, Pixar and Marvel Entertainment, Inc., that could mean some cool, new superhero or Star Wars attractions. They also pledged to build a new parking lot with 5,000 spaces, plus make improvements to streets around the parks that would ease traffic. This would all begin in 2017 and be done by 2024.
Disney also said that they'd like to extend the deal another 15 years under the condition that they would invest another $500 million into the parks.
While three city council members are on board with Disney's proposal, Anaheim Mayor Tom Tait disagrees. Tait said he's opposed to tax breaks and corporate subsidies. He said that while he's not looking to slap Disney with a gate tax right now, he thinks the additional revenue could be useful in the future when hiring more police officers or building new city amenities—or if the City falls upon hard times. The City also must come up with $500 million in pension obligations, so a future gate tax could be helpful.
Interestingly enough, when Disney came up with their first deal back in 1996, they wanted it to last forever. It was Tait, then a member of city council, who said he convinced the council to settle on just 20 years, according to the OC Register.
Disney officials said that a gate tax would hurt park attendance, how much guests spend at the park and would negatively impact how much the company would be able to invest in the parks. Disney last raised their prices in February.
The meeting to discuss the issue will occur today at 5:30 p.m., according to City News Service. Disney's other theme parks in other cities do not pay gate taxes.
Update, July 8: Anaheim has approved the 30-year tax exemption for Disneyland, KPCC reports.