Disney Cancels 4-Diamond Luxury Hotel

Disney today announced it is cancelling the 700-room 4-Diamond luxury hotel it was planning to build at the west end of Downtown Disney. The project constituted a $700 million investment that would have created 5,050 temporary jobs and 3,434 permanent jobs.

Disneyland Resort spokesperson Lisa Haines said via a statement:

“We’ve taken the time to review the economics of our proposed four-diamond hotel for Anaheim and have made the final decision to cancel the project.”

“While this is disappointing for many, the conditions and agreements that stimulated this investment in Anaheim no longer exist and we must therefore adjust our long-term investment strategy.”

This is a huge loss of investment and jobs, and will seriously impact the city’s future budgets. The now-cancelled hotel would have generated $750 million in total TOT revenue over 40 years. That revenue is gone and isn’t coming back. The city’s finance director, Debbie Moreno, told the city council earlier this year that cancellation of this hotel would necessitate budget “adjustments” – aka cuts – beginning in 2021.

The Tait-Moreno majority and their followers have refused to credit the believe the now-repealed TOT rebate policy with incentivizing Disney to embark on the 4th hotel project. When the Tait-Moreno majority seized on the siting issue as an opportunity to cancel the TOT rebate agreement, their camp scoffed at warnings their action would lead to Disney cancelling the project.

“Disney will build the hotel anyway,” was their mantra.

Never mind that Disney has had the entitlements to build this hotel for 20 years but didn’t move on it until the TOT rebate agreement made it feasible. Now that agreement is gone, and the hotel project is cancelled.

As recently as Monday night, the Tait-recruited candidate in District 6, Patty Gaby, dismissed the idea the TOT rebate played any role in Disney’s decision to build a 4-Diamond hotel in the Resort:

“I don’t believe the hotels would not be built. I believe Disney would build their own hotel.”

As today’s announcement proves, that confident and ignorant boast, by politicians and gadflies who don’t understand what they’re talking about, is just wrong. Guess it’s time to revise the Tait-Moreno majority narrative.

It’s worth noting that a few weeks earlier, Gaby incorrectly claimed that thanks to the termination of Disney’s TOT rebate, “We now have $267 million more dollars in our general fund.” At the same time, she praised Tait for causing Disney to “wave the white flag.”  Apparently, it never crossed the minds of any member of that faction that their long guerrilla war against the city’s largest employer and taxpayer might entail serious negative economic consequences.

Thanks to the efforts of the Tait-Moreno majority and their acolytes, Anaheim is losing out on thousands of good-paying jobs and hundreds of millions in tax revenue. Good luck on coming up with a plan to replace those.

48 comments

  1. If Disney buys their way into a council majority again after this election, they will get their subsidies back and then their long-term investment strategy will all of a sudden change to build the hotel. Don’t be fooled by Disney. Vote for Ward and Vanderbilt to hold Disney to their promises to stay out of Anaheim’s elections.

    • Wow. That’s the same crackpot theory Jose F. Moreno propounded last night.

      • Speaking of crackpot theories?

        Remember when you and your buddies ran around like chicken little about the Angels skipping town if taxpayers didn’t accept getting screwed on a land deal?

        You and your economically challenged friends were wrong then and your wrong now.

        Disney will build a hotel. When they do, the return generated on that hotel will be superior than the Giftaway Disney originally secured.

        This is straight up game play. If Disney gets their puppet, they’ll get a new gift of taxpayer funds.

        A little money for Harry, a little money for Brandman, BAM, $200,000,000 in investment return.

        • True, the Angels are still here – but it wasn’t for lack of them trying to re-locate. That framework would have led to a good deal for Anaheim – a new or revamped stadium at no cost to taxpayers, empty city land catalyzed for economic activity. It would probably be done by now.

          I get it: you’re sore the “Disney will build the hotel anyway” narrative has been destroyed and the blame lies with the Tait-Moreno coalition apparently actually believed there are no consequences to continually crapping on the golden goose. So you go into denial and insist that Disney really, really, really, really will build that hotel someday – or alternately that this is some Machiavellian political ploy. You can alternate political fantasies every other day.

          • It wasn’t for lack of Murray and Eastman and Brandman and Kring agreeing to give them THREE ADDITIONAL YEARS TO MOVE, was it?

            Are you going to shill for this crew for the rest of your life?

            • And as you pointed out earlier, they didn’t leave – despite the warnings from folks like yourself at the time that is exactly what might happen due to the extension. Don’t worry – no one expects you to be consistent.

              But your comment is emblematic of the MO of the Tait-Moreno coalition: disagree with their policy objectives and one is a shill, a crony, a fearmonger, blah, blah, blah. It’s that Jacobin approach to politics that makes the City of Kindness talk such a crock.

              Empower and collaborate with progressives in their political project to capture Anaheim government? Endorse, fund and stump for left-wing city council candidates? Somehow that can co-exist with claiming the conservative moral high ground.

    • Stand for Anaheim

      Have you asked Disney? I why would they abandon the whole project? These are lies.

    • Disney is not an all transparent company, it will continue to show it’s “nice” face to get what it wants. We need to keep Disney out of our city counsel.

      • David Michael Klawe

        UNITE HERE 11 is a massive political union involved in many cities election. They want to take over all of Orange County and LA County such as Long Beach. They already control the city of LA.

  2. David Michael Klawe

    Wait, UNITE HERE and other special interests already have raised over $930,000 to influence the city election.

    By the way, the NO on L flyer discussed by Dr. Moreno last night was NOT paid for by Disney.

    It came from No on L, a project of the Anaheim Chamber of Commerce, Committee Mayor Funding from
    Wincome USA and affiliated entities
    Prospera Hotels, Inc.
    Stovall’s Best Western

    If Disney paid and significant money, it would have to be disclosed.

  3. David Michael Klawe

    FYI, The Walt Disney Company Chairman of Parks, Experiences and Consumer Products, Bob Chapek and President, Disney Parks, Western Region iCatherine Powell personally property on Harbor Blvd. in Garden Grove this summer that could become the site of a new Disney hotel if the Measure L passes in Anaheim this November.

  4. Here’s the skinny of it, Disney is landlocked in Anaheim. They can’t just pick up and move, they’re in for the long haul. As soon as it becomes financially beneficial to them, they’ll be back to the bargaining table. There is no need to provide subsidies; they are flush with cash and will just have to invest like every other business.

    • Yeeeaaah…just like they were going to build the 4-Diamond hotel without the TOT rebate, right?

      Disney has had the entitlements to build this hotel for 20 years. They didn’t move to build until the TOT rebate agreement. Now that is gone, and they’re cancelling the project.

      Happy to discuss this further once you return to reality.

  5. They’ll build it in Garden Grove and free shuttle them, probably early before parks open.

  6. That hotel will be right back on the front burner if Disney gets its puppets on the council.

  7. What about the workers demanding $18/hr. It’s my understanding that Disney rejected our (Anaheim) subsidies so they wouldn’t be held to this rule if the proposition is voted yes in November. Disney is building up this Star Wars extravaganza they will build whatever is in there best $ interest. Not anaheim’s

  8. Those commenting seem to not know Anaheim’s history and Disney’s level of business acumen and power. You will not force them to do anything ever. They own the brand that people are drawn to and they will not let anyone tarnish their brand. Garden Grove is salivating right now, hoping we keep this up. What will happen is Disney will keep the original but expand elsewhere, nearby. Our neighbors will reap the benefits and we will be left with what? Anyone in business will agree you find a way to compromise.

    Jose Moreno posts about this even after the cancelation- big ones yes or is it stupidity? I choose the latter. Jose Moreno and his associates, Socialistic ideals have infiltrated our council and our schools. He has led the charge that culminated with Disney deeming our city as a hostile business environment. He is so full of himself that he thinks the way to go is to alienate our largest employer. Yeah, Jose you can force Disney into paying a different way, the wage you demand? Really? Anyone with a mind buy that?

    Those that know Anaheim, long term, know that our city was put on the map by Disney. Much of our land was undeveloped. Our city grew in size because Walt Disney decided on Anaheim and it drew people and businesses to it. Most of Disney jobs are meant to be career starters, not careers. If you stay employed by Disney while making a wage not to your liking then simply find another job. How many of us can go to our employers and demand they pay us more? We can ask but demand?

    This serious issue with Disney is hugely symbolic of what is happening in Anaheim. Do we MUST ask ourselves do we want leadership that makes such unsound business decisions? Do we want this Socialist group to further indoctrinate our youth, our city? Do we want to pay this group to FAIL OUR KIDS?

    I hope those voting in November seriously think of what their vote means, it means so much this year. It means we can try to put our faith in new leaders who could lead us to a brighter future?

    Or shall we vote to stay with an unprecedented amount of homeless people on our streets. A city with a high crime rate and not enough police to address said rate. A police force that has low morale to match the low numbers. Schools failing so badly that they are turned into charter schools and the current school board fights to keep leading them into failing? No we must not allow Anaheim to continue this way.

    WE MUST GET AT THE ROOT OF THE PROBLEM AND THAT ROOT IS JOSE MORENO.

    WE NEED TO VOTE HIM OUT IN NOVEMBER TO BEGIN TO RESTORE ANAHEIM.

    VOTE NO ON JOSE MORENO
    VOTE NO ON AL JABBAR
    VOTE NO ON RYAN RUELAS
    VOTE NO ON ANNEMARIE RANDLE-TREJO
    VOTE NO ON JUAN G ALVAREZ
    VOTE NO ON ASHLEY AITKEN
    VOTE NO ON JAMES VANDERBILT
    VOTE NO ON SHARON QUIRK-SILVA

    DID I FORGET ANY MORENO FOLLOWERS?

  9. Correction: We must ask ourselves….paragraph 4. So damn mad sorry,not sorry.

  10. Garden Grove salivates over their win for now, and northern San Diego County starts to think long term . . .

  11. Joe we can correct this by getting Jose Moreno out.

  12. Disney wins all the way. Nothing wrong with that. They will do as the Giant in the Room will do. No matter what anybody says or thinks of Disney, they are a business. A big one but a business. They will do what benefits them as do all businesses. Most of the folks responding to anything Disney does probably knows someone or someone’s child that works there. Disney May or may not build in Garden Grove, maybe they will build in Anaheim. We will have the same discussion in the future about their salaries or they don’t provide for the community. I will let you know if Disney has decided on any other location, Anaheim would not be the city it thinks it is. Maybe you want to live in a suburb of Los Angeles or have nothing bringing business to Anaheim, Disney does all of that. The happiest place on earth is a business and good at it

  13. VOTE NO ON MORENO AND AITKEN

    Another good economic deal bites the dust. The Tait Cabal said Disney would build it anyway. Once again they were wrong. 100% of ZERO is ZERO! So now that we have lost 5+ million into our general funds, what are they planning on doing? Drive away more investment?
    Tait gets to walk away to his cozy house in Laguna. Anaheim residents will be left holding the bag.

  14. VOTE NO ON MORENO AND AITKEN:
    Jose Moreno will probably get a committee together of his friends, then propose to form a task group who will study it some more and then hire some company to study it as well.

    His behavior is getting more disturbing by the day. He has a very striking air of insincerity when he speaks. If you are not a follower and you try to talk with him he looks right through you. He is so fake. He does not not serve the people in his district, to busy self promoting Jose Moreno.

    He is for the needle exchange but yet says we need safe parks. How would he feel if it was one of his children that got pricked yet he wants to give them more to discard about? It is okay to endanger those you were voted in to serve? We should vote for you again? No way Jose.

    He is for Measure L. He mocks and offends our largest employer to the point that they consider Anaheim a hostile environment to do business, and it is. Jose is clearly not a businessman.

    He has the audacity to then cry about Disney’s involvement in the election? He is just mad they are not backing him. However they can legally back a candidate it is within Disney’s right to do so. It is safe to say it is not Jose Moreno.

    I hope Ursula herself stirs her giant caldron and casts a spell to rid us of this monstrous fool.

    • Just wonderin’ … so why would Jose Moreno, whose family lives and dies by the “lawsuit sword” (research this clan’s fight for civil rights – how they got into Harvard, and medical school as immigrants), understand business? His whole life is built on government give-always. Now he utilizes whatever it takes- lying, bullying, race-baiting, false promises, threats-to get his way. The scholar is just a treasure box of virtues.

      When they say white women were the biggest benefactors of affirmative action, well the Morenos didn’t do so badly.

  15. Disney will be back at the table next year to work out a new deal for building a hotel there, be it 3 or 4 diamond. Nothing else makes sense.

    They will either be negotiating with a Council they paid for, or a Council they’ll have to respect. It’s obvious what they’d prefer – they’ve funneled nearly a million so far (mostly through SOAR) to elect Sidhu, Brandman, Sidhu, and O’Neil.

    Stay tuned, and think before you vote, Anaheim!

  16. Yes Vern, Think before you vote Anaheim: Vote Sidhu, Caldwell, Oneill, Brandman

  17. Sidhu will enforce the laws.

  18. So what if Disney will turn around on their decision? Isn’t that their right? They did exactly what was predicted by those who know business and specifically their business operations. You will never force them into submission. They don’t have to submit. They will protect their brand and change their plans.

    They have what people want. Their brand sells and surrounding areas know that and want them to come to their city for the commerce they will bring with them. Disney holdings are vast and most don’t even know to what extent. Any global corporation will behave just as they have. The Anaheim Resort is just one component but one that should be respected. You negotiate with them, you do not demand and try to force them to do anything. You respect their power, their place in Anaheim’s history, you engage them in Anaheim’s activities and you ask them to show us mutual respect by their involvement in our city.

    Most living in or around Anaheim have known frustration with traffic, tourists etc. but we live with it because it also has changed our city and increased our property values. in other words we know the value of a good relationship with them.

    Those like Jose Moreno, and his group, think they can force their demands to be met are left looking ridiculous. They move into Anaheim and don’t understand its history or just don’t care. Bullies behave much the same way.

    I hope Disney helps run this group right out of our city’s leadership roles, all of them that they have, from the councils to the schools. Then we can begin repairing our city.

  19. David Michael Klawe

    Look, I can tell you this.

    Disney has completely cancelled the 4th Hotel project, including paying penalties to construction firms and others under contract.

    Disney has now announced, and the city approved the Magic Way bridge, using a pathway along the eastern edge of the current Downtown Disney Parking lot, in a very smart move that will have no vehicle crossings. It will end at the former Rainforest Café building.

    All senior management has been told to focus on the in park projects, Galaxy Edge and related pathway work in expectation of large crowds next year, and work on the Super Hero Land at California Adventure. (Due to a contract with Universal Studios, they can’t use Marvel).

    Also focusing on parking needs, as even with the new “Cleo” structure, the Resort is short of parking for both guests and employees/CM’s.

    Sometime in the future, maybe next year, maybe later, multiple heads will be offered a chance to pitch ideas. Everything from enlarging Downtown Disney Shops and entertainment, to its Vacation Club Time Shares, and other options.

    Whatever makes the most financial sense.

    And Disney has been looking at Garden Grove, and Garden Grove city officials are preparing an incentive package for any large hotelier to invest and build in its city. Will it happen? Guess Disney might, if the numbers makes sense.

    A lot of other issues come to play, including the new split-roll property tax initiative on the 2020 ballot. Another good reason to hold off on any new project until you know what is going on around you, and how you will need to react.

    Heck, a LOT of pension money is invested in Disney, including CalPERS, and my own retirement has some.

    So for many Teachers, Union Workers, etc. Anything that reduces Disney’s profit reduces their pension funds.

    • The last part of what Mr Klawe writes is entirely undermined by the fact that the parks/resorts segment of The Walt Disney Company is only 25% of the company’s operating income. That includes their cruise lines, theme Parks, etc. On their 2017 earning report, they specifically note increases in guest spending and attendance at the Disneyland Resort….in the very last paragraph of the “Parks and Resort” discussion.

      People seem to forget that the biggest threat to the operating income of the “Parks and Resort” sector is not policy changes. It is a recession or a decrease in consumer confidence. Until that happens, Disney can raise prices to accommodate increased expenses, especially at the Disneyland Resort. Heck, they’ve taken to raising prices just for the hell of it with no decreases in attendance or in-park spending.

      In short, even an individual invested solely in The Walt Disney Company would not, and should not, be concerned about the loss of a hotel at a single resort.

      Clawe’s description of the approved bridge is entirely incorrect. The bridge is 137’ long. The distance across Magic Way and the sidewalks alone is….wait for it….137’. It’s literally a bridge that just crosses the street. None of this “ends at Rainforest Cafe building”. It’s just a bridge so that people don’t all have to cross at the current Downtown Drive crosswalk since Disney assumes more walking traffic will emerge from the new parking structure. Nothing special.

      The part about being unable to use Marvel in the superhero area of California Adventure makes no sense as there is a “SuperHero Character Encounter” on the Disneyland Resort website with pictures chock full of Marvel characters. The actual contract that Universal possesses as it relates to Marvel IP only applies to theme parks “East of the Mississippi”, wherein other theme parks can not base attractions on Marvel IP already in use at Universal Orlando. This is actually a segment of the contract from 1994. The only restriction placed on theme parks West of the Mississippi relates to advertising in that Disneyland can not directly use the keyword “Marvel” in ads.

      Disney is already engaged in a large overhaul of Downtown Disney, and I doubt they’d be looking to make additional changes anytime soon.

      Lastly, I call complete BS on this “investing in Garden Grove” talking point. Disney has invested LOTS of $$$$$$$ into ensuring that the guests never leave the Disneyland Resort itself. They have gone to great lengths to ensure that they can attempt to capture every single dollar that the guests wish to spend. It would make ZERO sense to suddenly break from that trend. Clawe’s post reads like it came from some “Disney Insider Blog” where they blow things out of proportion and make “predictions” based on rumors swirling amongst cast members who have no idea what the execs are actually thinking/planning.

      (Oh, one last thing about Garden Grove – were Disney planning a takeover, they’d be getting a head start on buying the council. There is no sign of that happening.)

      • That was a great comment. I only quibble with the final point – I imagine GG would be so happy to steal Disney business that they wouldn’t need to be bought.

        Pobre Garden Grove.

  20. It will be enjoyable to watch over the next couple of years. As much as folks want or don’t want Disney. As Disney goes, so goes Anaheim. I just know that I am not looking forward to the crowds next year.

  21. Wasn’t me. What is a pop? Maybe I’ll see the anonymous commenter who impersonated me here, at the OCBC luncheon I’m attending at the Disneyland Grand Ballroom November 6.

    Blackballed? What does that mean?

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