FACT CHECK: Patty Gaby Wrongly Claims Disney Hotel Deal Cancellation Puts $267 Million Into City Treasury

At the Anaheim Republican Assembly’s candidate forum this Wednesday, District 6 candidate Patty Gaby demonstrated astonishing ignorance of an issue that has been at the heart of Anaheim city politics for years: using TOT tax rebates to attract 4-Diamond hotel projects to Anaheim.

Earlier in the day, news hit the media regarding Disney’s request to cancel 1) the 30-year gate tax moratorium that was part of its agreement to invest up to $2 billion in the Disneyland Resort (including Star Wars Land) and 2) and the TOT rebate agreement for the 4-Diamond hotel project it halted last week due to the hostile business attitude of the city. The company again cited the toxic business climate emanating from City Hall.

Gaby – who was recurited to run several weeks ago by Mayor Tom Tait – greeted the news with elation in her remarks at the forum, saying “today was a great day” and gushing that Disney had “waved their white flag.” She credited Tait with “putting a little light” on the issue “so that we were all aware of what was going on.”

As a result, Gaby claimed, “We now have $267 million more dollars in our general fund” – money she later told the audience could be used to build more homeless shelters.

The $267 million figure is the estimated total TOT tax rebates for the fourth Disney hotel over the 20-year life of the agreement – but that’s only if Disney builds the 4-Diamond hotel project. No hotel, no TOT tax revenue.

The same thought occurred to a number of audience members upon hearing Gaby’s claim. One of them asked her: “You mentioned $267 million that we have now that we didn’t have yesterday. Can you explain that? Because I don’t think that’s true.”

“Well, that’s the subsidy that Disney had – part of the subsidy – that was their part,” Gaby replied.

That prompted another audience member to point out, “That money doesn’t exist. It hasn’t been generated.”

Gaby’s claim that ending the agreement magically deposits $267 million into the city’s general fund – money suddenly available to spend on homeless shelters and other projects – betrays an astonishing lack of understanding by a would-be city council candidate.

Disney has halted the hotel’s construction because the city was playing games with the economic assistance agreement. Now, Disney wants cancel that agreement – which doesn’t put one additional dime into city coffers, because there is no hotel to generate TOT revenue. Indeed, the city’s five-year budget forecast is predicated on the revenues that would have been generated by the 4th Disney hotel.

It’s understandable why Gaby thinks cancelling TOT  rebates for a non-existent hotel project that is unlikely to ever be built (at least in Anaheim) swells the city treasury by $267 million. For years, Mayor Tait, Councilman Jose F. Moreno and his allies have repeatedly attacked the TOT rebates as “taxpayer giveaways” and misleadingly talk about them as if there is the city is writing checks to build these hotels. Just a few days before, on August 20, Tait spoke to the OC Weekly as if the money currently exists: “The $267 million is desperately needed to pay for our vital city services.”

So when one of those agreements its cancelled, its no surprise that residents who buy the “giveaway” claim will believe the city is suddenly $267 million richer.

While Gaby’s claim that “We now have $267 million more dollars in our general fund” is patently false, it’s flows from the logic of the ceaseless “giveaway” mantra from the Tait-Moreno camp.

It’s said that if you repeat something often enough, people will start to believe it – even if it is untrue. Gaby bought into the misleading “giveaway” mantra, and consequently came off as uninformed, unquestioning and unprepared to be a councilmember.

10 comments

  1. Any word on if Disney will re-commence construction on the new hotel?

    • No, Disney is re-thinking the project.

      Between Prop L, the ALWI and the November results, plus the Split-Roll Property Tax vote in 2020, seems like if Disney brings back the project, it won’t be until after that. Plus if it does come back, it might be a totally different project, one that costs less, and therefore doesn’t bring in a higher paying guest.

      But Disney is in no rush on the Hotel. Their focus is on the new $100 Million Parking Structure and the new Star Wars Land.

  2. Good points – but you should also show that there is a true LOSS to the city’s general fund with this hotel being canceled!

    Without a hotel and without those hotel guests paying a bed tax (TOT), not only means the city wont refund a portion ($267 million) back to the developer BUT the city wont pocket the 30% or $114 million.

    Someone should ask Gaby and other candidates, how they would fill this hole in the city budget?
    Don’t ask the mayor- he has no idea.

  3. As I mentioned at our Anaheim Republican candidate at the Phoenix Club, we need to diversify our economy. Secondly, as Mayor I will work hard to hire more police officers. Anaheim’s finest really are doing an amazing job. Which in turn means, I will get our projects back on track with Disney stabilize our general fund.

    Fuji Shioura
    Independent Candidate for Anaheim Mayor
    http://www.mayor.city

    Upcoming projects: http://www.anaheim.beer

  4. Only folks that win in this issue is Disney. The giveaway should not have been approved in the first place. Maybe it happens in other cities but Disneyland has brought Anaheim into the big time. No Disney No Ducks , Angels and I would bet no Convention Center or Honda Center (almosyycalled it the Pond). Either way she is definitely not ready to be a City Council member. But then again, Galloway and Sidhu are running. Yes, Anaheim is a big time city maybe to the chagrin of folks who read this. Maybe they would be happy as a bedroom community for Los Angeles. Disney, I am sure , will build a hotel and watch Unite Here cry. Also I would guess that this will or should kill the badly written $18 wage initiative.

  5. It’s pretty pathetic when a City Council candidate shows the world she’s been drinking the toxic Kool Aid that Tait, Moreno and their cronies have been serving up to an unsuspecting and ill-informed public. What an idiot! She thinks she’s qualified to represent District 6? Not a chance!

    Susan R’s got it right: the residents of Anaheim only LOSE because this hotel isn’t going to be built. The city hasn’t paid out one thin dime to Disney to build this hotel, nor were they ever going to.

  6. Sour Grape Flavored Pringles

    What event was this at? Was it the CRA candidate forum that Harry Sidhu and most of the rest of the SOAR/ Pringle faction chickened out on? If nothing else, she gave a better debate performance than Trevor O’Neil, because she actually bothered to show up.

  7. What an idiot. She is being used by Tait. Tait seems to have a habit of picking uneducated twits- i.e. Denise Barnes. Come on Anaheim. We can do way better than this.

  8. Yeah I cringed a bit. I wouldn’t have phrased it EXACTLY like that.

    But it’s true enough. If Disney builds that hotel, WHICH THEY WILL, whether 3 or 4 diamond, Anaheim will have that additional TOT.

    If nothing else crazy and unpredictable happens between now and then.

    • It’s not how she “phrased it” – she believed something that wasn’t/isn’t true, and vocalized it.

      And neither you nor Patty Gaby nor anyone else know whether or not Disney will build the 4th hotel. They’ve had the entitlement to do so for a couple decades, and didn’t move on it until the TOT rebate policy was established. When that got yanked, they put the hotel on ice.

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