New Disneyland Resort Hotel On Hold After Tax Break Dispute with City

This past October, it was confirmed by Disney that a new luxury hotel would be built at the Disneyland Resort in Anaheim, California. The new hotel would boast 700 rooms and be the fourth official Disneyland Resort Hotel. However, all these plans came to a screeching halt overnight over a $267 million tax break dispute and difference on where the hotel would be located.

In 2016 the Anaheim City Council agreed to offer Disneyland Resort tax subsidies for the new hotel. That was when Disney announced the hotel would be built on the north end of the Resort on the grounds of a current parking lot. At that time, Anaheim was offering builders of high-end hotels 70% of hotel occupancy taxes returned to them up to 20 years.

Then, when Disney confirmed plans for the hotel back in October, they also announced it would be moving the location of the hotel to the west end of the resort at Downtown Disney. Even though it’s only about a 1,000-foot difference in where Disney wanted the hotel in 2016 to it’s planned location 2017, Anaheim since ended the tax subsidies incentive. Plans that had already been approved were grandfathered in for the subsidies but Anaheim sees the new location of the proposed hotel as a completely different project now.

City of Anaheim Mayor, Tom Tait, had the following to say about the dispute, “It’s a matter of law, and legally the city cannot pay the subsidy because it’s a fundamentally different project. If Disney wants to build a luxury hotel they should build it with their own money.”

Yes, Disney can still build the hotel without the subsidies but it doesn’t think it should have to. David Ontko, Chief Counsel Resorts stated, “You have given us no other choice than to put construction of the hotel on indefinite hold as the resort reevaluates the economic viability of future hotel development in Anaheim.”

The new Disneyland Resort hotel was scheduled to open for guests in 2021. Now, it is uncertain when construction will even begin if at all. Several Downtown Disney businesses such as the AMC Movie Theater, Earl of Sandwich, ESPN Zone, and Rainforest Café have already closed in anticipation of the construction to begin on the hotel this past July which of course never came to fruition.

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