Anaheim ends tax breaks for Disney — at Disney's request

Annlee Ellingson  
Disneyland castle in Anaheim, California
Getty Images

Anaheim is taking Disneyland Resort up on its latest offer.

The Anaheim City Council voted unanimously on Tuesday to end the tax incentives that have benefited the theme park giant for decades, reported the Los Angeles Times.

The move comes at The Walt Disney Co.'s request.

In a letter to Mayor Tom Tait and the city council dated Aug. 21, Disneyland Resort President Josh D'Amaro called for the termination of two agreements:

One prevents the city from imposing an entertainment tax if Disney (NYSE: DIS) invests $1 billion in the resort by 2024 — an obligation that will be met by the addition of a "Star Wars" land to Disneyland. Disney has also announced plans to build a Marvel-themed attraction at California Adventure.

The other incentive offers a refund on hotel taxes worth $267 million if Disney builds a luxury hotel — a project that has been put on hold over a disagreement whether plans to relocate the hotel negate the agreement.

"[I]t has become apparent that certain policies that were adopted to enhance the Anaheim Resort District and benefit the city … have instead created an adversarial climate where there should be cooperation and goodwill," D'Amaro wrote in his letter.

The tax breaks are also tied up with increasing pressure on Disney to increase the pay for some of its 30,000 Disneyland Resort workers. A measure on the November ballot aimed at the entertainment giant would require large hospitality businesses that benefit from Anaheim tax incentives to increase hourly wages to at least $15 with annual raises of a dollar through 2022.

If the city stopped giving Disney tax incentives, the measure wouldn't apply to Disneyland.

Disney, however, has said that its request to end the tax breaks was unrelated to the wage matter, and the company has already reached an agreement with four unions representing 9,700 workers to start paying workers a minimum $15 per hour starting in January.

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