ANAHEIM, California. – Anaheim officials said Nov. 3 that an Orange County Supreme Court judge got it right when he dismissed a lawsuit designed to force Disney to comply with a living wage regulation approved by voters.
Orange County Supreme Court Justice William Cluster ruled on Monday to dismiss Disney in a class action lawsuit alleging that the company was not complying with Measure L, approved by voters three years ago.
Measure L requires any hotel company with 25 or more employees that receives city subsidies to pay $ 15 an hour.
The city issued the following statement regarding the ruling:
“While we never want such a dispute to be played out in court, we value the judge’s ruling. This confirms what we already knew and said – the City of Anaheim does not provide any discounts or subsidies to Disney.
“The Mickey & Friends parking structure and related funding were part of the $ 1.9 billion expansion of The Anaheim Resort from 1997 to 2001.
“The expansion was a public-private partnership reflecting mutual interest in Anaheim’s tourism economy. This has been a great return on investment for our city, residents and surroundings.
“After expanding in the 1990s, Anaheim hotel revenues more than tripled to reach a pre-pandemic high of $ 163 million in 2019. This money went to public safety, community centers, libraries, parks and city commitments.
“The pandemic has demonstrated how important a strong tourism economy is for our city. With more parks and convention center closed for a year, the hotel’s revenue fell 85 percent in two years to about $ 25 million. It was a real challenge for our city and the people we serve. “
The cluster ruled that although Disney benefited from the deal with the city, it technically did not receive a tax credit.
The cluster said: “Whether the Disney respondents received a ‘government grant’ in a general sense is a different matter than whether they received or were eligible for a city subsidy as defined, i.e., Tax rebates (in the form of a refund, emission reduction, tax exemption, etc.) ”.
Cluster said that the plaintiffs demonstrated how the exemptions were used to service the bond debt, but “they did not find any evidence that the financial agreement causes the Disney defendants to pay less taxes (be it post-payment refunds, prepayment exemptions, etc.) than they should have had if there hadn’t been a financial agreement. “
In other words, the financial agreement with the city helped Disney cover all of its “debt service payments, not taxes,” Cluster said.
“If Disney’s defendants had raised construction funds privately, they would have had to pay both tax and debt service payments,” Cluster said. “The issue of bonds here was structured in such a way that they received part of the proceeds from the issue of bonds, but only had to pay taxes in return. Their taxes go to the general fund of the city, and money from the general fund ultimately serves the debt. [after a series of transactions]… This is a significant benefit for the Disney defendants, but again, there is no evidence that the financial agreement would in any way reduce their tax liabilities. Therefore, the public benefit provided to the Disney Defendants under the Financial Agreement does not constitute a City Grant. ”
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