OC Register Wrong, Anaheim Chamber Right on Hotel Policy

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A week ago, the Orange County Register published an editorial opposing the 4-diamond hotel incentive policy the Anaheim City Council will be taking up on Tuesday:

It’s beginning to seem as if Anaheim can’t even give away $158 million in subsidies for construction of two four-star hotels near the Resort District’s GardenWalk mall, as another deadline in the plan came and went last month.

In 2013, the Anaheim City Council voted, with Mayor Tom Tait in opposition, to allow hoteliers to keep 70 percent of the transit occupancy tax – or bed tax – generated for up to 20 years, after a 2012 attempt was met with legal challenges. But the agreement also came with some requirements, importantly, that breaking ground on the hotel “was required no later than May 26, 2015, and was to be completed within 30 months.”

The date passed without ground being broken, and one would hope that would be the end of the saga. But judging by the perseverance of the most recent attempts to give away the public purse, it is undoubtedly not the last we’ve seen of such proposals. And a recent council workshop on economic development will likely prove a worrying indicator of things to come.

The OCR editorialist claims the reason ground has not been broken is because the economic assistance policy isn’t working – an amazing claim because it ignores the actual reason, which is well known: left-wing advocacy group OCCORD and it’s left-wing attorney Cory Briggs have been tying the project up in court with a worthless lawsuit. It is difficult to credibly account for such a glaring factual omission by the Register.

You can read the rest of the editorial here, and below I have posted a response from the Anaheim Chamber of Commerce:

The Register’s commentary (June 7, “Tax giveaway can’t lure hotel to Anaheim GardenWalk”) on the effort to attract four-diamond hotels to Anaheim left out some critical facts that gave readers with an incomplete picture.

Most importantly, the sole reason that the GardenWalk Hotels have not broken ground yet is a series of frivolous lawsuits designed specifically to delay the projects. Despite judges repeatedly slamming the arguments and basis for these lawsuits, the plaintiffs have tied up these worthy developments in court; the very textbook cases of lawsuit abuse and need for tort reform for which the Register has editorialized many times. One might be puzzled by the Register’s seeming alliance with those who would use our courts to try to extort payments out of investors simply wanting to bring jobs and economic activity to communities.

With regard to a broader hotel investment and incentive policy being prepared by the City of Anaheim, our understanding is that Anaheim is in part trying to deliver on what both the Register and Mayor Tait have said they would support after the GardenWalk incentives were adopted. Twice before (February 7, 2012 and August 21, 2013), the Register opined its opposition to the tax cuts to spur hotel development in Anaheim because the proposal applied only to the two proposed GardenWalk hotels. Mayor Tait agreed, arguing on May 11, 2013 that “…one politically connected developer…” shouldn’t receive such incentives, and that it should apply to all developers.

The Council Members who supported the GardenWalk hotels and the thousands of jobs and hundreds of millions of economic benefit they would bring to Anaheim indicated they were simply supporting the only applicant before the City, and said they would support a policy to bring more four-diamond hotels to Anaheim that applied to all developers. That is the policy that city staff are now preparing to bring before the City.

The policy on its way to the City Council will accomplish what the Register has long argued for – lower taxes on entrepreneurs to spurn their investment in Anaheim. We hope the Council will support it.

 

 

23 comments

  1. “The policy on its way to the City Council will accomplish what the Register has long argued for – lower taxes on entrepreneurs to spurn their investment in Anaheim. We hope the Council will support it.”

    Then lower the TOT for EVERYONE.

  2. The Register is losing readership because it’s so consistently wrong and exhibits extreme bias. Do they even have fact checkers left on staff? We’ve gone back to the LAT and don’t plan to come back – hopefully the Register goes under soon.

  3. Anaheim Insider

    Ryan, the policy’s purpose is to encourage the development of something specific: 4-diamond hotels, because it strengthens the competitiveness of the Anaheim Resort and will yield great tax revenue in the long-run. Simply cutting the TOT tax doesn’t accomplish that.

    What’s your take on the Register editorial’s false explanation of why ground hasn’t been broken on the GardenWalk hotels? Either the writer was deliberately dishonest, or failed to make any effort to acertain the facts. Neither explanation reflects well on the Register editorial page, which under Brian Calle has become Tom Tait’s lapdog on things Anaheim.

    • Four diamond? What happened to four star? Interesting that this is evolving. I don’t necessarily object, but a discussion as to why that changed seems appropriate.

      I don’t see any reason why family owned hotels should be required to pay their fair share of taxes while richer and more established investors or corporate entities should not. If the goal is to reward entrepreneurs as the Chamber claims, then claiming this subsidy is designed to encourage growth in a specific direction can’t be true. It’s designed to reward one kind of entrepreneur.

      It’s like saying that all entrepreneurs are equal, but some are more equal than others.

      I guess I just don’t believe in a command economy. But hey, some people really like socialism.

      With regard to the Register, I take less issue with their story than the owner/operator of this blog failing to mention that he has and will be paid by the Anaheim Chamber of Commerce. It’s a glaring conflict of interest that ought to be disclosed in a piece like this.

      I didn’t follow the OCCORD suit closely, but I will remind the Chamber that OCCORD’s first lawsuit concerning Gardenwalk was hardly frivolous. Indeed, Anaheim and OCCORD have the exact same court record concerning this $158,000,000 rebate: 1-1. I think their language is WAY over the top given Anaheim’s record.

      But, I imagine this will take a substantial amount of the council’s time this summer. More to come I suppose.

      • Anaheim Insider

        “Four diamond? What happened to four star? Interesting that this is evolving.”

        Are you being dense on purpose, Ryan? Or is this a feeble attempt at being clever? Star and diamond ratings are pretty much interchangeable.

        “I don’t see any reason why family owned hotels should be required to pay their fair share of taxes while richer and more established investors or corporate entities should not…”

        Again, are you being dense on purpose? Hotels don’t pay TOT taxes; hotel guests do.

        “I guess I just don’t believe in a command economy.”

        By calling this a “command economy’ policy, you show you don’t know what the phrase means. In a command economy, the government says that during the next year X number of shoes will be manufactured at Y price. This policy merely provides an incentive to build 4-star/4-diamond hotels. Participation is voluntary.

        It’s good to know you don’t care about the Register editorial writer’s disregard for the truth. That fits your pattern. You did recently admit on this blog to being a hypocrite. Which fits the guy who rails against tax subsidies while drawing a paycheck from a company that benefits from a whale of a city tax subsidy in order to incentivize it to stay.

        • Well, no. I believe “Diamond” is a proprietary ranking from AAA. This sounds like application of a more objective reviewer, but thanks for the casual insult. Much appreciated.

          Given that we’re talking about rebates here, distinguishing on who is paying or who is collecting is rather immaterial. If the market supports an inclusive rate of $100 and TOT is 20%, a hotelier is pushed out of $20 from the market rate by a tax. If we’re refunding rebates to one owner and not another, the TOT is paid by the Hotelier– not the consumer– from an economics and policy stand point.

          By command economy, I’m stating that Anaheim is dictating that X number of 4 diamond hotels will be built with an effective cost of Y due to a TOT rebate. The shoe fits, sorry.

          Finally, your ENTIRE rebuttal is a attack against my character versus an actual debate on policy. That’s par for the course with anonymous commentators here.

          Enjoy your Monday.

          • Yes, we all know Diamond rankings are the AAA’s proprietary system. And it’s pretty much interchangeable with the stars system. Now that we’ve established this is a distinction without a difference, you can stop chewing on that red herringbone.

            How about you take your theory, hang around Anaheim hotel lobbies and try to convince guests who are checking out that it is really, truly the HOTEL that is paying the TOT, notwithstanding what their hotel bill and credit card company tell them.

            “By command economy, I’m stating that Anaheim is dictating that X number of 4 diamond hotels will be built with an effective cost of Y due to a TOT rebate.”

            Um, no. What you’re stating isn’t true. The city isn’t “dictating” one or another number of 4-star/diamond hotels. In a command economy, the government commands economic activities to take place regardless of whether or not any incentives exist. If you can’t fathom the difference between that an incentive program that investors and companies are free to take or leave, then you should spend a few weeks in Cuba and learn what a real command economy looks like.

            Lastly, I did not attack your character. You aren’t dense, but you have been making dense arguments here.

            • Red herring bone? Seriously?

              “Four diamond? What happened to four star? Interesting that this is evolving. I don’t necessarily object, but a discussion as to why that changed seems appropriate.”

              You think that’s how I would introduce a red herring? After all my sniping and directions down yellow brick roads, that’s how little you respect my talents of misdirection?

              That’s not a red herring. It’s a casual interrogatory. It’s interesting that the dialogue is almost universally using “diamond” instead of “star”, but it’s nothing more than interesting.

              If you want to hang a banner in the lobby, I’m sure your typical tourist has more than enough command of basic economics to understand that absent the TOT, the hotel would just as well increase their rate. After all, the market clearly supports the cost for the service.

              Thanks for the education on a command economy. Perhaps you should spend some time outside of Anaheim Chamber of Commerce and you can learn what a real laissez faire economy looks like. In the mean time, I’ll stick to my ridiculous hyperbolic comparisons that have no bearing to reality absent a trip to Cuba.

              With regard to my character, I think you missed the last paragraph of your last comment, but cheers for the apology.

      • I would guess it’s simple economics. People who are willing to pay $450. per night to visit Anaheim are much more likely to spend more than someone at the Carriage inn Paying $139. (a paltry rate by any standards but, likely in CATER counsels price range).

        Bottom line is the HOTEL TAX is a rip off to begin with. To waive it is to just bypass the middleman and let the money be spent on businesses.

        I know Jose (the “good one”) Moreno thinks that people form Australia, Europe and Asia should pay for parks and infrastructure for illegal immigrant children in central Orange County, but that is unrealistic.

        The subsidy is a GOOD deal for Anaheim and GOOD deal for California.

        • If it’s a rip off to begin with, then it should be repealed for everyone. Period.

        • Ah, quickly, one more thing to chew on.

          The TOT also pays for Anaheim’s pet projects. Namely ARTIC and the $300,000,000 bond tied to expansion of the Convention Center.

          Maybe getting rid of the rip off TOT to get rid of rip off projects isn’t such a bad idea.

          Thanks WhoisCATER?!

          http://www.ocregister.com/articles/city-666832-anaheim-percent.html

          • I am down with that. But in addition to ARTIC, you are going to deprive your citizens with severely needed services. Which I am also OK with. The question is are YOU?

            We don’t need to subsidize so many of the programs we do. Rather, let’s provide funding on a proved need basis. Not because some special interest (OCCORD) say’s so. In my opinion, OCCORD, Jose Moreno’s group are basically terrorists, shaking down the city for funding. I would call Jose a “Poverty Pimp” but, of course that is politically incorrect, yet factually true.

            How much money does CATER, it’s counsel provide to society? how much does CATER, it’s counsel TAKE from society?

            I would love to have Greg Diamond declare he DOES NOT, HAS NEVER received public assistance for. And then explain how he spends 100 hours a week blogging.

            • Jose Moreno is a terrorist.

              Well, there goes the last teeny tiny bit of credibility belonging to the trolls here.

              Well spent, I hope.

  4. Dan Chmielewski

    That’s a pretty serious charge. Is this true Ryan? Tax subsidies for me but not for thee?

    • I have no idea what you or he is talking about.

      I guarantee it has something to do with my employer, because attacking me is significantly more important here than actually discussing policy.

  5. Dan Chmielewski

    Does your employer accept tax subsidies from a city in order to stay in the city where your company does business? It’s a yes or not answer Ryan. If you don’t know, perhaps you should ask.

    • It’s a multi billion dollar company with operations in literally thousands of cities. Not only do I not know or care, but it’s WAY beyond my pay grade.

      In any case, it’d be wildly inappropriate for me to comment on it. But harp away on my already conceded hypocrisy if that’s how you get your jollies.

  6. Well, if we are going to start using TOT to backfill the huge ARTIC Hole there won’t be anything left for the other Chamber-supported sinkholes.

  7. Dan Chmielewski

    let’s see; it’s Tesoro Energy right? Looks like they spent $1.4 million on lobbyists
    http://www.taxpayer.net/library/article/political-footprint-of-the-oil-and-gas-industry-lobby#LobbyExpenditures

    And here’s $50 million from the Alaska State Senate over a five year period: http://www.adn.com/article/20140421/lawmakers-approve-refinery-subsidy-plan-excluding-agrium

    Taxpayers give generous tax breaks to the highly profitable energy business; http://www.motherjones.com/politics/2014/04/oil-subsidies-renewable-energy-tax-breaks

    Is this a good use of our tax dollars Ryan?

    • Dan,

      You can’t seriously think I’m going to comment on this.

      That you even spent two seconds researching is a little sad.

  8. Dan Chmielewski

    It took about a minute; your company gets millions in taxpayer subsidies even though its highly profitable. You won’t comment on this but will on others…what’s the word….oh yes. Hypocrisy.

    • That’s a sad little minute forever gone from your life, for which you gained absolutely nothing.

      Capital job, Dan-o.

  9. Dan Chmielewski

    As is the minute it took you to reply. But I’m caught up on The Game of Thrones and the departure the series has taken from the books.

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