UNITE-HERE Directed Lawsuit’s To Cost Anaheim: Over $33 Million In Tax Revenue

Anaheim will lose out on more than $33 million in net tax revenue due to a doomed lawsuit by a UNITE-HERE Local 11-controlled political pressure group that delayed the opening of the 4-Diamond GardenWalk hotels for 6-8 years beyond their planned 2014 completion date. That is millions in critical revenues unavailable for park improvements, improving police response times, paying down Resort bond debt or other civic purposes, thanks to a fruitless delaying tactic by same union now pushing an initiative to hike the minimum to $18 an hour by 2022 for a select few employers in Anaheim’s resort area. It’s easy to see who they’re targeting, but harder to rationalize their actions which have and will hurt Anaheim.

In early 2013, the city approved the luxury GardenWalk hotels project consisting of  a convention hotel (opening under the JW Marriott flag) and a resort hotel. The approval, which required the 866-room project to open in 2014, included an economic assistance agreement under which 70% of Transient Occupancy Tax (TOT) collected at the two properties would be turned back to the hotel owners for either 20 years or until the TOT turn-back totals $158 million – whichever came first.

However, a lawsuit filed by a UNITE-HERE Local 11 front group called OCCORD brought the project to a halt.  Although the lawsuit was generally considered a loser, but it succeeded in freezing the project until a judge ruled against the UNITE-HERE/OCCORD lawsuit in late 2015.

Consequently, the JW Marriott convention hotel and resort hotel openings have been delayed until 2020 and 2022, respectively.

JW Marriott Hotel at GardenWalk

That’s a span of 8 years during which the GardenWalk hotels would have been generating millions in TOT, sales and property tax revenues for the City of Anaheim. During that time, the city’s total revenues from the two properties would have been more than $97.8 million in TOT, sales tax and property tax revenues.

After taking the TOT rebates into account, Anaheim will lose out on more than $33 million in tax revenues that otherwise could have gone toward parks, hiring police officers, street repairs and offsetting rising pension obligations.

Another consequence of the UNITE-HERE/OCCORD lawsuit is postponing further into the future the point at which the city captures 100% of TOT from the GardenWalk hotels. Absent the UNITE-HERE/OCCORD lawsuit, the developer would be nearly half-way toward hitting the rebate cap – after which the city TOT revenues from these properties explode. Thanks to UNITE-HERE obstructionism, Anaheim residents will have to wait many more years to benefit from those tax revenues.

Then there are the 3,000 construction jobs that have been delayed, and the 1,300 permanent operations job from which no one has been able to earn an income.

Responsibility for this loss of tax revenue and jobs lies squarely with UNITE-HERE Local 11. OCCORD is controlled by UNITE-HERE Local 11. The militant hotel workers union started OCCORD, funds OCCORD, and provides office space to OCCORD at the union’s headquarters. UNITE-HERE Local 11 boss Ada Briceno, the long-time chairman of OCCORD’s board of directors, did double-duty as the group’s interim executive director in 2015-2016. Corey Briggs, the notorious San Diego attorney who represented OCCORD in the lawsuit, is on retainer with UNITE-HERE.

The GardenWalk convention hotel will be built (it remains to be seen about the resort hotel). The lawsuit delayed, but did not stop the project. Hotel workers will not be represented by UNITE-HERE Local 11. Despite ceaseless platitudes from Local 11 leadership about speaking for “the people” and fighting to improve Anaheim neighborhoods, the reality is UNITE-HERE leaders only succeeded in harming those same people by choking off millions and millions in tax revenue to invest in neighborhoods.

Given the sorry track record of Local 11 leadership in the court room and at the bargaining table, maybe UNITE-HERE Local 11 members should question whether they’re getting a good return on their dues money.

14 comments

  1. Wait … “the GardenWalk Hotel” WILL be built?

    I thought the threat from the SOAR side was that none of the subsidized hotels would get built if November’s Living Wage measure passes. That’s how they came up with that whole “4000 jobs killled” figure.

    Yeah, I’m thinking the other subsidized hotels are going to get built as well, Living Wage or not.

    • Which in turn means the building trades’ turning against their Unite-HERE sisters is not only cringe-inducingly obsequious but unnecessary.

    • Confirmed last night with Mr. O’Connell, hotel will be built; if Living Wage passes, he’ll just have to sit down and figure out how to deal with it. He agrees ruefully that there’s upsides to his employees being paid well.

      • Matthew Cunningham

        That’s not news. No one has said the JW Marriott convention hotel wouldn’t be built if the union measure passes.

      • Au contraire, mon frère – on the “Anaheim Job Killer Initiative” propaganda page (probably penned by you? and now offline, though the Orange Juice Blog has a screenshot of the claim in question) the banner headline was “This will cost Anaheim over 4,000 jobs.” And the footnote to that claim included “City Council Agenda and accompanying reports, item #23 on May 14, 2013…”

        And THAT was the Gardenwalk Giveaway where $158 million in tax giveaways was promised to Mr. O’Connell to build his JW Marriott convention hotel with its promised jobs. You-all were saying those jobs would disappear, i.e. the hotel would not be built.

        Are you saying now that that was a mistake? It WAS taken off line. Maybe you-all were too hasty to try to make people think jobs would disappear, but if you made a mistake you should admit it, not pretend it didn’t happen.

        • Vern, I realize you have a very vivid imagination, but I didn’t write any of the stuff you’re quoting.

          In my article, I should have written that the convention hotel is going forward (my mistake). I understand it’s too far down the development pipeline. The resort hotel is a different matter. The union initiative entails tremendous cost increases for affected businesses. If you don’t think that impacts plans to start or expand businesses, you’re living in dreamland.

        • I don’t really care if you’re the one who wrote it or not. Someone on your side did, and many thousands of people saw it. And yet you wrote this morning, “No one has said the JW Marriott convention hotel wouldn’t be built if the union measure passes.”

          That website is gone now. Its claims were never true. “Over 4000 jobs” are NOT being killed by the Living Wage Measure.

          And the Building Trades need to take a chill pill.

          • Last time I checked, the DEMS in OC were/are ENTIRELY dependent upon the “Building Trades”, in fact isn’t their facility the one that hosts local meetings? Maybe you need a REALITY pill.

          • Vern, why are you obsessing on some vanished talking point? How does that falsify the argument that the union minimum wage initiative will kill jobs?

            If the measure passes, Disney likely cancels its 4-Diamond project, and Wincome likely cancels the second 4-Diamond, and GardenWalk likely cancels the second hotel, and yeah that WILL kill thousands of construction and permanent jobs. That’s just common sense.

            And the GardenWalk hotels are only being built because of the TOT rebate. They don’t get built, then they don’t generate TOT revenues – there would be now TOT to “give away.” The $158 million giveaway slogan that you and Moreno and Tait and the rest of the gang say over and over is dishonest at its core.

  2. Good. Now the city of Anaheim is getting a small taste of how it feels to people that have been caged and then made to jump through several years of legal hoops and idiocy for nothing. I have an idea. Maybe they could offset these great loses with the money they take in from the Anaheim owned Disneyland parking garage. Oh, wait, scrarch that. You dummies leased it for a dollar.

  3. Fake news.

    This lawsuit didn’t cost the city anything. More hypocritical nonsense from this site’s owner who infamously claimed the great Gardenwalk giveaway wasn’t a giveaway because future revenue isn’t real.

    Now that unions are involved, all of a sudden future revenues are real!

    Without this lawsuit, the hotel in question is still delayed. It has much more to do with finance and operation strategy of the property owner than any externalities. It’s the owner, dummy. A silly lawsuit isn’t going to stand in the way of assured multi-million dollar profits.

    Critics of this deal told you this would happen.

  4. Didn’t see a couple of these comments till just now, because on my phone they’re illegible, being squeezed way over to the right. Oh, this will be fun.

    “who is cater” says: “Last time I checked, the DEMS in OC were/are ENTIRELY dependent upon the “Building Trades”, in fact isn’t their facility the one that hosts local meetings? Maybe you need a REALITY pill.”

    What is this person’s point? Did I bring up any political parties? I’ve written many times that there is no Democrat or Republican in this town, that’s why I like it here. Of course the Building Trades have too much power in my Party, which wouldn’t be a problem if they weren’t so frequently pushing policies and projects that were bad for the public (and other unions.) Hence, the contrast between Brandman and Moreno who hardly seem to be members of the same Party. Duh.

    Then, “411”: (by the way, why is anonymity so de rigueur with most commenters here?)

    “Vern, why are you obsessing on some vanished talking point?”

    It’s important to document the history of one’s opponent’s shifting lies. It’s important that I establish the SOAR/Chamber/Disney side as serial liars/spinners/exaggerators. Again, duh.

    “If the measure passes, Disney likely cancels its 4-Diamond project, and Wincome likely cancels the second 4-Diamond, and GardenWalk likely cancels the second hotel, and yeah that WILL kill thousands of construction and permanent jobs. That’s just common sense.”

    Au contraire. Common sense and a little basic math tells us they WON’T cancel those hotels. Living Wage or not, they are too profitable. This is just a threat because they’d prefer to NOT pay the extra wages. You’re either dopey to fall for it, or part of the subterfuge yourself. O’Connell tells me he’s building his hotel either way, and Wincome only said they “might”not build, which Matt changed to “won’t build” in his title a couple months ago. And there’s no way the Disney project doesn’t get built.

    “And the GardenWalk hotels are only being built because of the TOT rebate. They don’t get built, then they don’t generate TOT revenues – there would be no TOT to “give away.” The $158 million giveaway slogan that you and Moreno and Tait and the rest of the gang say over and over is dishonest at its core.”

    I like that. Pay attention. You guys can’t have it both ways. If the TOT giveaway doesn’t exist because the TOT moneys don’t exist yet, then you guys can’t say 4000 jobs that don’t exist yet are gonna be “killed!”

    Next…

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