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AVP
07-08-2015, 12:04 AM
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The City of Anaheim tonight voted 3-2 to extend the current ticket tax exemption on Disney theme park admission, following a nearly 7-hour-long council meeting. Citing the length of the meeting, the record number of speakers who addressed the Council, and that there had been only 9 days of public notice, Anaheim Mayor Tom Tait moved to continue the vote until the next meeting. His motion failed, as three other Council members pushed for a decision that night.

Debate continued into Wednesday morning, with Mayor Tait and Councilman James Vanderbilt ultimately voting against, and Council members Lucille Kring, Jordan Brandman and Kris Murray voting in favor of a 30-year extension.

Though Mayor Tait helped negotiate the current deal in 1996, he told (http://www.ocregister.com/articles/tait-670502-city-tax.html) The Orange County Register that he "couldn't sleep" if he voted for this extension. Tait said there are other ways that Anaheim can assist the Disneyland Resort without closing the door on this potential income source. Anaheim has never imposed a ticket tax on theme parks. Councilwoman Kris Murray said that she would even support offering the same exemption from possible future entertainment taxes to other companies willing to make significant investment in Anaheim, perhaps a nod to the ongoing negotiations with Angels baseball.

The current exemption was negotiated as part of the Disneyland Resort expansion that eventually saw the construction of Disney California Adventure, Downtown Disney, the Mickey and Friends parking lot, and Disney's Grand Californian Hotel. The 20-year deal ends in 2016. Mayor Tait noted that the original 1996 proposal called for an indefinite ban on ticket taxes, but that he was able to negotiate instead a 20-year agreement. Tait said that in retrospect, he feels Disney would have gone ahead with the Disneyland Resort expansion even had the city approved the tax. None of the domestic Disney theme parks are subject to a local ticket tax, though Florida state sales tax is added to tickets purchased at Walt Disney World.

In exchange for another extension, Disney proposed a $1 billion expansion of the Disneyland Resort, a project Disney says would mean 1,400 new jobs and an additional $15 million in annual tax revenue for the city of Anaheim. While Disney has not disclosed any firm plans, the deal is expected to include a new parking structure, new hotels, and expansions of the Disneyland and/or Disney California Adventure theme parks. A statement released by Disney references a "5,000 space parking garage" adjacent to a "potential new Harbor Gateway." The deal would require Disney to have "shovels in the ground" by the end of 2017, or the agreement is void.

Both Disney and the City of Anaheim commissioned independent studies to forecast the economic impact of the proposed expansion. Mayor Tait challenged a representative of the firm hired by the City of Anaheim, asking how they could reach any conclusion without knowing exactly what Disney planned to build.

Proponents of the tax deal argued that any loss of gate tax to the city would more than be offset by the increase in other tax revenue to the City of Anaheim, including sales, hotel and indirect property taxes. Opponents said Disney would build the expansion regardless of the vote, and argued the city should not rule out a future source of tax revenue that might be needed if the city faces tough economic times in the 30 years covered by the deal. Council woman Murray pointed out that the current deal had been tested by the recent economic downturn. and said Anaheim was in better financial health than some countries.

In an editorial (http://www.ocregister.com/articles/anaheim-669931-disneyland-city.html)published by The Orange County Register, Disneyland Resort President Michael Colglazier said that the outcome of the vote would greatly influence Disney's decisions about where to invest expansion and development dollars. "The Walt Disney Company is currently discussing where and how to develop these creative properties [Marvel and Star Wars] across its six resorts around the globe. Having the assurance of a continued Entertainment Tax Policy is a crucial part of the decision of how much to invest in Anaheim." Disney proposal also includes an automatic additional 15-year extension, for a total of 45 years, if Disney "invests an incremental $500 million in new attractions and/or entertainment offerings" beyond the $1 billion.

Council woman Kring warned that Disney had plenty of options, and might choose to invest instead in their theme parks in Japan or France if Anaheim imposed a new entertainment tax on Disney.

In an editorial, The Orange County Register (http://www.ocregister.com/articles/tax-670451-disney-anaheim.html) urged the City Council to continue the tax break, saying "In doing so, the council would also renew a commitment to all Anaheim businesses to maintain a low-tax business climate, which improves private enterprise and the economic vitality of the community."

In June, a divided city council voted to give a bed tax break to developers building additional 4-star hotels in Anaheim. While customers of these new hotels will pay the full bed tax, the hotel would be allowed to keep up to 70% of that tax revenue. The vote for the 20-year deal fell along the same lines, with Mayor Tait and Councilman Vanderbilt voting against, and Council members Kring, Brandman and Murray voting in favor.

candles71
07-08-2015, 05:51 AM
In paragraph 4, it says 2106, either my math is wrong, or it is a typo. ;) At the end of paragraph 8, it says $1.

AVP
07-08-2015, 06:15 AM
In paragraph 4, it says 2106, either my math is wrong, or it is a typo. ;) At the end of paragraph 8, it says $1.7. Hour. Meeting.

Brain. Numb.

Fixed.

:D

candles71
07-08-2015, 06:27 AM
7. Hour. Meeting.

Brain. Numb.

Fixed.

:D
I saw what time you posted it and figured. :)

olegc
07-08-2015, 09:40 AM
i am glad, as a park goer, that no new taxes are added. I do however understand that new revenue requirements by the City of Anaheim are always needed. Maybe the City should have negotiated harder for more assurances on parking, traffic flow, etc. as well as Disney's assurance not to block any possible independent construction in the city for transportation or beautification projects - which Disney has lobbied in the past to put on hold saying it would hurt the resort. Well, obviously, all the construction they did for DCA, and the months-of-walls at Disneyland, did not dissuade anyone from attending. I guess that's my beef as a civic minded person - Disney wants to be an independent business without impacts to its popularity (taxes) but then it also lobbies against things that they are not sure would hurt or help their business. I would have been harder in that area of assurance on the deal. Simply getting shovels in the ground by 2017 as a requirement is easily met I think.

bumblebeeonarose
07-08-2015, 11:37 AM
This is good news for Disneyland and fans. I believe it's ultimately good for Anaheim too. Yes, they lose out on a potential tax, but they gain more in jobs and new tourists. The hotels charge tons of tax that goes to the city. In the past it may have been true that Disney would build up the park anyway, but I think in this case it may not be true. They have so many properties now, even beyond theme parks, that they don't have to invest in Disneyland in such a grand way. The parks are packed, as are local hotels, largely due to recent renovations/additions including Carsland. They could live off of this hype for years still. I'm glad they'll be moving forward with something; I hope more definite plans come out soon.

timl33
07-08-2015, 11:43 AM
Is a "ticket tax" the same thing as a sales tax on tickets? Or is it an actual extra tax?

bumblebeeonarose
07-08-2015, 11:50 AM
Is a "ticket tax" the same thing as a sales tax on tickets? Or is it an actual extra tax?

I think it would be similar, but the state doesn't tax on Theme Park tickets, so it would have just been a city tax on the tickets.

goalieump413
07-08-2015, 03:21 PM
While this appears to be good news on the surface, has anyone considered the rate of potential ticket price increase Disney may now impose? Even though Anaheim isn't going to tax ticket sales for 30 more years, the deal forces Disney to invest in $1B, which has to come from somewhere.

I like the free market and all, and if people are willing to fork over greater amounts of cash to keep visiting DLR, then fine. But it's really the general guest population that is going to be taxed here.

olegc
07-08-2015, 03:46 PM
While this appears to be good news on the surface, has anyone considered the rate of potential ticket price increase Disney may now impose? Even though Anaheim isn't going to tax ticket sales for 30 more years, the deal forces Disney to invest in $1B, which has to come from somewhere.

I like the free market and all, and if people are willing to fork over greater amounts of cash to keep visiting DLR, then fine. But it's really the general guest population that is going to be taxed here.

yes - it will increase - but as some have said they may invest regardless of a tax or not. this way if they don't have a tax the presumption is Disney won't take the hit without directly tying investment to ticket price. They invested 1B for the DCA items without a tax in place - and look at the attendance spike (and the ticket increases since). The claim that they may decide to invest elsewhere is somewhat valid - but time and again the results show that the investment they make in Disneyland creates a significant increase in revenue generation. You can argue back and forth that a tax would or not like likely have them invest a Star Wars land or Marvel attractions in Anaheim - but the history shows its not likely that we would totally be omitted.

Now Disney will be able to increase ticket prices and fully realize the "costs" a guest may incur are directly related to the "value" they receive from the park, without a concern about tax increases.

Janis and Aaron
07-08-2015, 07:23 PM
I absolutely love Disneyland, but I find this to be akin to blackmail on Disney's part. (Kind of like when Disney tried to play Long Beach and Anaheim against each other, with the "winner" being home to the 2nd California park.) I feel like Disney would most likely invest in the Anaheim parks anyway, just because the economics support it. The parks have been attracting tsunamis of people ever since the upgrade to DCA. The area seems to be a safe bet for further investment.

I think that the main reason Disney was fighting this tax so much (which, remember, would have been paid by their guests, not Disney itself) was because it would have inhibited their ability to raise ticket prices further. Let's say the theoretical ceiling that people would be willing to pay for a 1-day parkhopper is $200 (just pulling a number out of the air to demonstrate). If there is an 8% tax, that means that Disney can only charge $185 for the ticket without the total price going over $200. Without a tax, they can charge the whole $200 - and keep it all for themselves.

goalieump413
07-08-2015, 09:11 PM
In addition to my assertion that an increase in the rate of park ticket prices will now follow the "no" tax vote, the argument that price follows value is a reasonable one. I would, however, point out that value is no longer, in my opinion, anything that Disney Parks is worrying about. In the 1960's and '70's following Walt's death, there was a real worry that stagnation was going to set in. The economy at the time wasn't helping either. But now, DLR's presence is so large anyway that there's no real concern that stagnation or attendance will decline anytime soon. What this vote did, was force Disney to expand, regardless of whether any new good ideas for park expansion are on the horizon. Parking... ooh, ah...

Imagineering is going to be a good place to work for a while, I guess. Plenty of reasons to stay late...

Janis and Aaron
07-08-2015, 10:18 PM
What this vote did, was force Disney to expand, regardless of whether any new good ideas for park expansion are on the horizon.

Interesting, and scary, thought. I'm willing to bet that they have several projects in mind already, though. Maybe they've been holding off on expanding the Star Wars presence in the parks because they were waiting to see which way this vote went. No tax = bigger expansion, tax = one or two things in Tomorrowland. Remember, they have to have "shovels in the ground" by the end of 2017 or the deal is void. That's not too far off when you think about all the planning that must go into new Disney projects. I wonder how much of it has to be started by that deadline, and how much can be spread out over the 30 years?

I would argue that your statement that "DLR's presence is so large anyway that there's no real concern that stagnation or attendance will decline anytime soon" is incorrect. The parks will face real competition from Harry Potter Land when it opens at Universal Studios (next year?). And stagnation is ALWAYS a threat. Remember how damaged the park finances were after DCA first opened and was so underwhelming? People vote with their pocketbooks, and that vote can go against Disney at any time. If they let things stagnate, they might not lose too many APs, but the lucrative non-AP guests will decline.

olegc
07-09-2015, 09:39 AM
In addition to my assertion that an increase in the rate of park ticket prices will now follow the "no" tax vote, the argument that price follows value is a reasonable one. I would, however, point out that value is no longer, in my opinion, anything that Disney Parks is worrying about. In the 1960's and '70's following Walt's death, there was a real worry that stagnation was going to set in. The economy at the time wasn't helping either. But now, DLR's presence is so large anyway that there's no real concern that stagnation or attendance will decline anytime soon. What this vote did, was force Disney to expand, regardless of whether any new good ideas for park expansion are on the horizon. Parking... ooh, ah...

Imagineering is going to be a good place to work for a while, I guess. Plenty of reasons to stay late...

Yeah, parking is not pretty or a ride, but its actually needed at the resort - especially if the demographics for single-person AP holder cars in the lots continue, as well as the limited time all night parties which wreak havoc on the streets. Though if they could not put all those people inside Disneyland this time around with less parking, how with they do it with more?

And - a lot of imagineering is contracted out. Yes, during a project, they have an imagineering name badge and custom hard hat. Once completed, its off to another gig. Not all of it - but a lot of it.

Disneyphile
07-09-2015, 12:03 PM
This is fantastic for Disney, fans, and also Anaheim residents. As a resident, they do a LOT for the city already without paying more tax. This will bring so many new jobs and land improvements as well as increasing overall property values. So, it's really a win for everyone. :)

potzbie
07-11-2015, 07:27 AM
Remember, the city of Anaheim is under no obligation to use a PERCENTAGE.
So, 8% or 10% or 2% is not necessarily the kind of value to consider.
Instead, the city of Anaheim may use a flat rate, and put a floor on the price.

Imagine this.
I am a city councilman.
I want a billion dollar company to pay a tax so that I do not have to tax the Mom-and-Pop store of under 10 employees.
I could draft a tax code like so:

"For those tickets which would have a face value of $80 or LESS (e.g., Knott's Berry Farm, Magic Mountain),
there is no admission tax."
"For those tickets which have a face value of MORE than $80,
the admission tax is $0.50."

Result?
For every 50,000 visitors (one day) to Disneyland, the city of Anaheim will get $25,000.
In a year (365 days), that is (365 x 25000 dollars), i.e., NINE MILLION DOLLARS ($9,125,000.00).

Out-of-state vacationers would be paying the bulk of that money, I would guess.
If a city had an extra $9 M in their pocket, that is $9 M that they do not have to tax a hardware store, a clothes store, an ice cream shop, or a TV repair shop, sitting on Lincoln Avenue, West Street, State College Drive, or Katella Ave.

Q. Would Disney be "forced" to raise ticket price, due to $0.50 of overhead being added?
Yes.
But the ticket price would only rise by fifty cents.
i.e., less than ONE PERCENT.

Q. Would it bust the chops of Disney Incorporated to pay a $0.50 tax on tickets?
Hardly.

Q. Will Disney Incorporated refuse to invest its proposed money into Disneyland, because of the $0.50 tax?
No.
Disneyland Incorporated would have invested that money anyway, because there is going to be a return-on-investment, regardless, or they would have needed to do the maintenance anyway, regardless.

An extra $9 M will mean more police officers, or more social services, more city street improvements, for all of Anaheim.

***

And, why the parking lots of Anaheim Stadium is not being used on days the Los Angeles Angels of Anaheim are not playing home games for six months in the Fall and Winter, don't get me started on that one!

Disneylandfan85
07-11-2015, 10:19 AM
Yeah, parking is not pretty or a ride, but its actually needed at the resort - especially if the demographics for single-person AP holder cars in the lots continue, as well as the limited time all night parties which wreak havoc on the streets.

Well, as I said before, I hope that they take care of any and all parking issues BEFORE they do any more attractions in the park. I know it's not a favorite among the serious fans (allowing Tomorrowland to further become not what it was (or what the fans think it should be)), but they should work out the issues surrounding the parks before they deal with the parks themselves.

goalieump413
07-11-2015, 04:04 PM
Well, as I said before, I hope that they take care of any and all parking issues BEFORE they do any more attractions in the park. I know it's not a favorite among the serious fans (allowing Tomorrowland to further become not what it was (or what the fans think it should be)), but they should work out the issues surrounding the parks before they deal with the parks themselves.
I agree. Two reasons: It solves the problem of the "shovels in the ground" by 2017, as a parking structure doesn't have to be necessarily themed. Second, it's likely that a second large parking structure with tram/bus service, electric vehicle stations, and moving walkways for some guests, reducing longer walks (kids, elderly, disabled).

It's not sexy to talk about a new parking structure in terms of guest expectations though. The "big news" that will surely following in the coming months better be a big facelift/new buildings in TL. You're right, as TL is actually Yesterdayland as it stands. Repurposing existing structures to bring in new attractions is Green Building, but at this point, I think guests are starting to itch for something truly revolutionary. The obvious choice is Star Wars, but you can't pack just one story universe and call it a day. You have to think about what Walt had originally intended for TL, and expand on what we now think tomorrow will really bring.

Janis and Aaron
07-11-2015, 06:48 PM
Potzbie, I also wondered why the city didn't just go for a smaller tax that no one would balk at, but would give a nice total sum to them. It's not like it had to be 8% or nothing.

Disneylandfan85
07-12-2015, 09:00 AM
Repurposing existing structures to bring in new attractions is Green Building, but at this point, I think guests are starting to itch for something truly revolutionary. The obvious choice is Star Wars, but you can't pack just one story universe and call it a day. You have to think about what Walt had originally intended for TL, and expand on what we now think tomorrow will really bring.

Well, Bob Iger said that anything Star Wars-related would likely lean heavily on the newest trilogy coming out. Also, what is "green building"?