Orange County Business Journal

Anaheim City Council to Consider Hotel Bed Tax Ballot Measure

Kari Hamanaka Tuesday, July 24, 2012

The Anaheim City Council is expected to vote tonight on a plan that would send future waivers or other exemptions to the city’s hotel bed tax up for voter approval as a ballot measure.

The debate comes in response to a subsidy the City Council approved earlier this year for developer GardenWalk Hotel I LLC. The subsidy is capped at $158 million.

The developer has plans to build two four-star hotels at the 466,417-square-foot Anaheim GardenWalk retail, dining and entertainment center.

The Orange County Business Council and Los Angeles/Orange Counties Building and Construction Trades Council have voiced their opposition to putting the matter to voters.

A ballot measure would require voter approval of any waivers, exemptions or refunds on the city’s bed tax, and would apply to future hotel development. Any extensions of waivers of current exemptions to the bed tax would also require voter approval.

The Anaheim Tourism Improvement District, created in 2010, applies a 15% tax to all hotel stays in the city.

The subsidy for the development of the two hotels at Gardenwalk amounts to 80% of the transient occupancy tax dollars expected to be collected from the two properties over the next 15 years.

The hotels’ developer has plans to build a 466-room convention hotel and a 400-room, all-suites hotel. The two projects are expected to cost $238 million, which includes a $20 million parking structure.

Construction on the first hotel would start no later than May 26, 2013, opening about 30 months later. Construction on the second hotel would begin in November 2015 with an opening by May 26, 2018.

The debate over the bed-tax exemption was sparked by the plans for the hotels at GardenWalk, and has gone on for months in Anaheim.

Tonight’s meeting follows recent speculation that Burbank-based Walt Disney Co. could be considering a third theme park in Anaheim, with a current parking lot across the street from GardenWalk a possible site (see story in this week’s edition of the Orange County Business Journal).