Anaheim to Award Biggest Tax Subsidy in City History to Disney, but Union Leaders Remain Quiet

ANAHEIM, Calif. — There’s evidence of a very California coup in the city of Anaheim, where an unusual alliance of city officials, government union leaders and developers is advancing its own financial interests at the expense of everyone else. Their current goal: a council vote Tuesday night by the Anaheim city council to offer major corporations, including Disney, the largest tax subsidies in Anaheim history.

That agenda item came as a surprise to Mayor Tom Tait, the man you might figure should know everything at City Hall. A long-time critic of taxpayer subsidies to business, Tait says city staff, including City Manager Paul Emery, worked to keep the deal under wraps. “I inquired multiple times about a new potential Disney property,” Tait told us. “When asked, he (Emery) denied any knowledge of this proposal.”

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               How Disney wants Anaheim residents to end up?

In an email, Emery told us he notified Tait and other council members about the Disney subsidies on June 8. But that was one day after the Orange County Register reported the Disney deal. By then, Tait says, he’d already heard the news elsewhere. “I had to hear it from the Disney president after it was announced,” Tait says. “At some point, (Emery) should have called me to let me know.”

Anaheim spokesperson Mike Lyster said there was nothing unusual in communications to Tait.

“To brief council members before an application has been filed is premature, as some inquiries may never result in a formal application, or a project may change significantly before an application is submitted,” he said in an email. Even when that pending application is from Disney? Requesting a historic $267 million subsidy? Maybe even especially then: “We don’t want to treat Disney any differently than we treat everybody else,” Lyster said.

Disney and two other luxury hoteliers are seeking a total of about half a billion dollars in new hotel subsidies. Leaders of the Orange County Employee Association (OCEA) once routinely opposed such subsidies, fearing they imperil rising government worker pay and benefits.

But now? Radio silence.

In January 2012, OCEA rallied to block subsidies to the proposed GardenWalk hotels – two four-star hotels in the resort district. OCEA attacked council members supporting the subsidies in mailers condemning the “Giveaway Three.” The group was the main muscle behind the signature gathering drive for Let The People Vote, a campaign to put hotel subsidies before a general vote.

A year after fighting public giveaways, union leaders were suddenly pro-subsidy, their fear of future shortfalls apparently eliminated. OCEA walked away from Let the People Vote; the campaign fizzled. When the Anaheim city council voted for the same GardenWalk subsidy in 2013, OCEA was silent. In 2015, fire and police union leaders actually endorsed a measure that would stop the city from taxing gate receipts at Disneyland for the next 45 years.

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                                           Anaheim’s future?               

What changed? Multiple sources told us the unions’ conversion came in April 2012 after a meeting between Nick Berardino, head of the OCEA; Carrie Nocella, Disneyland’s government relations and minority business development director; and Todd Ament, Anaheim Chamber of Commerce president. After that meeting, Anaheim was a kind of Tomorrowland of happy relations between corporate, union and City Hall representatives.

OCEA officials did not respond to requests for comment. At the time, Berardino told the Voice of OC the meeting was called “to discuss better ways to handle divisive issues like taxpayer subsidies. Any talk that a labor deal was worked out in that meeting amounts to speculation run amok, he said.”

“We didn’t talk about delivering anything to [city] employees,” Berardino reportedly declared.

But in June 2012, just two months after the summit, the Anaheim city council approved a contract with workers covered by OCEA: no outsourcing of government jobs, no layoffs, no furloughs, and $2,200 to each employee who had taken furlough days. Tait was the lone dissenter.

A few months later, in November 2012, the City Council voted 4-1 to keep firefighter pension rates high – even as other California municipal officials were slashing government worker pay and benefits. Again, Tait was the lone dissenter. A few months after that, with Tait again in the minority, the council cut a similar deal with police. In January 2016, the city council was at it again, voting 4-1 to raise firefighter salaries by 10 percent by mid-2017. Of course, Tait was again the lone no vote.

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                            Tom Tait: Standing up to Disney

On Tuesday, hotel developers including Disney will ask Anaheim taxpayers for subsidies amounting to a half-billion dollars. The city’s top elected official was boxed out of discussions—blindsided, he says, on what will be the largest subsidy in Anaheim history. If precedent means anything, union leaders will support the subsidies, despite the likelihood that doing so will undermine the city’s financial health and harm its own workers.

If you live in Anaheim, the story is clear: city officials, public employee unions and powerful businesses continue to give away hundreds of millions of dollars at the expense of the taxpayer.

There’s nothing remarkable about special-interest groups—like union leaders and big business—advocating for themselves. But you don’t have to be an idealist to expect that the city council will serve all residents, not just the rich and powerful.

Of course, Anaheim isn’t alone in taxing its residents on behalf of corporations and government unions. But there is something unique in the fact that all this is playing out in the shadow of the Matterhorn.

About the Authors:  David Schwartzman is a rising junior at Hillsdale College, and Matt Smith is a graduate student at Princeton. Ethan Musser (Mississippi State) and Blake Dixon (Yale) also contributed to this report. They are participants in the investigative reporting summer internship at the California Policy Center in Tustin. This article was first published in OC (Orange County) Weekly.

2 replies
  1. Dave Drummond
    Dave Drummond says:

    Nice job of reporting a half truth slant, rather the unbiased report of what transpired and why. Didn’t dawn on you that the subsidies are offset by millions of NEW tax revenues from hotel users, thousands of jobs being created, and tax monies generated by tourists visiting the Magic Kingdom and other Anaheim venues. Hundreds of millions more revenue for the city, plus hundreds more jobs vs. the parking lot that presently exists on the Disney site. There are 3 hotels in this approval package, only one of them is a Disney property yet your slant makes it sound like its a cow down to Disney only (of course without mentioning the Disney Company built Anaheim, not the other way around). If this is an example of your “reporting” maybe Brian Williams can find you similar only partially analyzed research jobs at MSNBC. And your buddy mayor conveniently left the council meeting before the vote to catch a plane to something obviously more important and significant.

    Reply
  2. Bo Ziffer
    Bo Ziffer says:

    Dave, the subsidies were completely unnecessary, as there is no evidence that the hotels wouldn’t have been built anyway. This is a classic case of the governments picking winners and losers, and the losers are the little guy. This is unfair competition and it is an egregious abuse of power on the part of the giveaway three. What new tax revenues are you referring to? This will all be given back to the hoteliers as part of the rebate. The jobs Disney provides aren’t high-paying, desirable jobs. This is seen in that Anaheim has done much worse economically since Disney has been there. Your claim that Disney built Anaheim is ABSOLUTELY FALSE. Anaheim has only gotten poorer relative to the rest of the state in the past 60 years. The Mayor did everything in his power to be present for the vote, even offering to cancel his vacation the following week in order to be present for the vote. CANCEL HIS VACATION. Would you cancel your vacation for the sake of your city, Dave? Would you? In stark irony, fellow council member Kris Murray GOES ON VACATION WITH DISNEY EXECUTIVES during her free time. ICYMI, the Mayor left to meet with Obama regarding police violence. One might take a stab in the dark and say that this is important. Tell your giveaway three friends to address these truths if they are ever able to climb out of the dark, cushioned pocket of Mickey Mouse!

    Reply

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