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A small move has a big impact on an important city incentive

Image: Disney

Originally, when this hotel was first announced Disney planned to build the luxury resort at the north end of the resort, in an undeveloped area. After this plan was announced, Disney was able to secure a $267-million tax break from the City of Anaheim government to help finance the project. 

However, as the plans for the hotel changed, the construction site was moved to Downtown Disney. And while this doesn't seem like a big deal (the shift is less than 1,000 feet), the City of Anaheim has objected to the change in location, and has recinded the 70% break on Anaheim’s occupancy tax. In response to this development, Disney has released the following statement: 

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

This was certainly a strong statement, but the City of Anaheim quickly shot back with a statement of their own: 

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.

Image: Disney

Though its true that Disney could use their own money to develop and build this new property, it looks like the tax incentive was a big part of their overall project budget, and the resort is no longer interested in bringing a fourth hotel property to the Disneyland Resort.

This is definitely a sad development, as this new hotel project looked really impressive, and the Disneyland Resort has been in need of additional hotel room inventory for several years now. This new property could have been the solution to several long-running problems (and help ease strain that will likely follow the opening of Star Wars: Galaxy's Edge), but it looks like, at least for now, this project has been completely cancelled, and it likely won't be resurfacing any time soon, unless Disney and the City of Anaheim can somehow come to an agreement. But based on their respective statements, such an amicable solution doesn't seem possible. 

Image: Disney

How do you feel about this project cancellation? Do you think Disney should have still built the property despite the cancellation of the tax break?  

 
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