Anaheim city council members had a simple task before them last night in receiving and filing a legal opinion by the city attorney that the Disneyland Resort is exempt from a living wage measure before voters next month. Following the city’s termination of two Disney tax rebate agreements at the Mouse’s request, councilwoman Kris Murray asked for a report on what companies would be subject to the measure and what the impact to the city would be.
The ballot initiative stipulates that a resort area corporation must have such agreements to be subject to the proposed minimum wage scale topping off at $18 an hour by 2022.
City attorney Robert Fabela offered his insights into the matter in a calm report to council last night before the meeting devolved into a shit show. He disagreed with attorney Richard McCracken, the living wage measure’s principal author, who previously argued in the Weekly that a 1996 Disneyland expansion deal financed through ongoing bond payments qualified as a tax rebate under the ordinance’s language.
To whit, a “city subsidy” is defined in the ballot measure as “any agreement with the city pursuant to which a person other than the city has a right to receive a rebate of transient occupancy tax, sales tax, entertainment tax, property tax or other taxes, presently or in the future, matured or unmatured.” Anaheim recently terminated a bed-tax rebate agreement worth $267 million over 20 years for a planned Disney luxury hotel as well as a decades-long entertainment tax ban in place for the company. Both policies seemed firmly situated within the ballot measure’s language.
“The specificity that the drafters chose with regards to this definition limits what can be considered a ‘city subsidy’ under the measure,” Fabela said. “Rather than being an expansive or common understanding of the term ‘subsidy,’ it’s detailed.” He met with Disney representatives as well as proponents of the measure in assessing whether the bond financing fell within the ordinance’s definition of a tax rebate. McCracken has argued that since Disney taxes are diverted from the city’s general fund to make bond payments favorable to its California Adventure expansion, they are reaping the economic value, a form of rebate.
“We didn’t see a discount in Disney’s tax payments or any sort of refund of the taxes they were paying,” Fabela said. “It’s complicated but we’re pretty clear it doesn’t amount to a tax rebate as defined or set forth by Measure L.”
Fabela did make an omission in stating that the minimum wage scale, if passed, would apply to a pair of GardenWalk hotels as well as Wincome’s planned luxury lodges in the Anaheim Resort who have bed-tax rebate agreements. In 2001, city council subsidized the GardenWalk shopping mall itself through a 50 percent sales tax rebate and a bed-tax kickback of the same rate. A later council upped the bed-tax subsidy to 70 percent for a pair of hotels in 2013, a vote that embroiled Anaheim in a years-long debate over such policies in Anaheim. Just before that, a deal was cut during closed session that reaffirmed the sales tax rebate to the GardenWalk’s new owners so long as they agreed not to seek a percentage of bed-taxes from the hotels to come.
With Fabela’s legal opinion, Murray smelled blood. “This has been a campaign of fraud, distortion and misinformation,” she said. “Disneyland can’t be the marketing tool to sell this initiative to our residents.” Councilwoman Lucille Kring joined in the criticism. “The people of Anaheim are going to rue the day that they forced Disney to pull the plug on the rebates,” she said. The “rue the day” refrain was one mayor Tom Tait used in 2015 when a council majority voted to grant Disney a decades-long entertainment tax moratorium in exchange for up to $1.5 billion in investments.
Councilman Jose Moreno publicly disagreed with Fabela’s legal assessment in believing the measure still very much applied to the Mouse. His analytical acumen has been suspect in the past, most recently oddly promoting on social media a Los Angeles Times op-ed by UC Irvine Econ professor Amihai Glazer opposing Measure L in arguing that keeping labor costs (i.e. wages) low ensures maximum attendance at Disney theme parks thereby bolstering potential gate tax revenue should such a policy ever be enacted. But this time, Moreno had help. He held a letter in hand that McCracken addressed to city staff reading, “law and common sense will agree on this issue. The ’96 agreement, which runs until 2037, is a subsidy to Disney in which it gets back its own tax payments.”
Moreno, who is running for reelection against pro-subsidy candidate Mitch Caldwell, articulated an insurance policy argument for passing the living measure based on the potential outcome of the local election. “If a future council decides to provide another set of hundreds of millions of dollars of taxpayer giveaways,” he said, “at the very least, that company, whether it be Disney or any other, will have to pay a higher wage.”
Murray took umbrage with Moreno’s critiques of Disney’s involvement in elections. She waved a Measure L mailer that also promoted the election bids of Moreno and mayoral hopeful Ashleigh Aitken, who’s gone on record supporting the living wage initiative as well as corporate subsidies, provided they benefit the community. “Your mail is being funded by Unite Here, SEIU, and the proponents of Measure L,” she said. “They’re co-branding your campaign.”
With that, the shit show escalated faster that the measure’s living wage scale!
“Is that right?” Moreno said, with amusement. “Oh, can I see that? Is it a good picture?” He cited election law in claiming ignorance of the independent expenditure mailers.
“Because you’ve never seen it,” Murray, who’s termed out, sarcastically countered. Fabela interjected and urged council members to wind down the debate that began veering off-topic.
But Moreno launched into one last message directed at Anaheim voters. “There’s a current campaign to highly fund Disney-preferred candidates,” he said. “You will see corporate subsidies coming back on the docket. If you want to vote for candidates who may be supported by other money, you know what you’ve received.” He listed off policy positions including opposition to corporate subsidies and a lobbyist registry.
“That was a blatant campaign speech on city dime,” Murray said, before turning her ire to Tait. “You would never let another member of council make that speech.”
“This is a campaign issue that you brought up,” Tait countered. “As it pertains to Measure L, not to candidates on this ballot,” Murray responded. Tait accused her of wanting to be mayor before the back-and-forth bickering led him to slam his gavel and call for a recess, a move that only inflamed temperaments in the short-term. “For how long? Kring asked Tait. “Until you feel that your pride has come back? God, is there any alcohol in this building?”
Tempers cooled off. When the meeting resumed, a unanimous vote to receive and file Fabela’s legal opinion, which doesn’t equate to agreeing or disagreeing with it, followed shortly after. “Speaking generally, issues that can come up include using city resources for anything that could be seen as campaigning or potential Brown Act violations when speaking to topics beyond the scope of an agenda item,” Mike Lyster, Anaheim’s spokesman, writes the Weekly. “Our city attorney interjected with his advice as conversation began to broaden to touch on candidates and campaign financing. His interjection last night was all that was necessary and no further action is called for.”
Discussion about the living wage measure and its applicability to the the GardenWalk will resume on Oct. 23, the last city council meeting before the November election.