Anaheim Approves Radisson Blu Luxury Hotel Project Agreement Sans Subsidies

Radisson Blu in 2021. Courtesy city of Anaheim

Amid all the dire warnings in Anaheim from the chamber of commerce and building trades about economic consequences to come if voters approve a proposed $15 living wage ordinance in the Resort area, a $168 million high-rise luxury hotel project just outside it quietly came before Tuesday’s city council meeting. Greenlaw Partners, an Irvine-based real estate company, showed great eagerness in wanting to move forward with a development agreement to begin construction of a 12-story, 326-room Radisson Blu hotel this October. In looking to acquire an awkward triangular parcel owned by the city near the 5 freeway and Anaheim Boulevard, the developers showed no interest in land or bed tax giveaways. 

“We’re proud of the fact we’re not seeking any subsidies from you,” Donald Lamm, a Greenlaw representative, told council. “We’re trying to do this all at market rate.” 

John Woodhead, community development director, outlined the project during a brief presentation that began in the late-night hour. The city is looking to unload its 3.3 acre parcel for $3,650,000, an amount described as fair market value. The city acquired part of the parcel from the Orange County Transportation Authority for $1.6 million in 2000. Greenlaw already entered an agreement to purchase the 11 acre Anaheim Business Campus site just north of the city-owned parcel for a future mixed-use development, but hasn’t submitted any plans for that yet. They’ve been busy negotiating with the city since 2016 about acquiring the smaller parcel to build the future hotel on.  

The proposed Radisson Blu includes plans for a 348-space parking lot as well as ground floor and rooftop restaurants. “Radisson Blu is a popular international hotel brand,” said Woodhead. “This will be the fourth in the United States and the first on the West Coast.” Greenlaw estimates the hotel would create 300 construction and 140 permanent staffing jobs. If all goes according to plan, the Radisson Blu will open in January 2021. From then on, the luxury hotel is expected to generate $3.06 million in bed tax revenue annually. 

Lamm described the hotel as one that aspires to a 4-diamond rating from AAA, but certainly will be 4-star. Two years ago, city council doled out hundreds of millions in bed tax subsidies for a trio of 4-Diamond luxury hotels in the Anaheim resort. Council proponents of the Four Diamond Hotel Incentive Program that ushered them in with such giveaways argued that the 70 percent bed tax breaks over 20 years offered were necessary to attract high-end hotels to a resort area largely bereft of them.

Building and construction trade unions negotiated Project Labor Agreements with hoteliers in backing the subsidies during the decisive council meeting. The hotel incentive program came to an end by unanimous vote in December after Mayor Tom Tait won a council majority opposed to subsidies in elections the month before. The Radisson Blu will be about a mile away from Disneyland, but is just outside both the Anaheim and Disneyland Resort zones. Since it won’t receive subsidies and doesn’t fall within the targeted industry area, it wouldn’t be subject to living wage increases ($15 per hour in 2019 with dollar annual increases to $18 per hour by 2022) under the proposed ordinance if passed in November by voters. 

But that didn’t stop council members from asking related questions that have come up in the living wage debates. “Is the hotel developer interested in local hiring?” councilman Jose Moreno inquired. “Oh, absolutely!” Lamm responded. He noted that no discussions surrounding Project Labor Agreements for trade union construction have taken place and that Radisson paid a minimum wage of $14 per hour for hotel workers.

For her part, councilwoman Kris Murray asked about how the potential living wage law might affect the project. “It doesn’t seem to be a significant issue,” Lamm responded. He noted that by 2022, California’s state minimum wage laws would raise Radisson’s wage floor to $15 per hour anyway. Murray asked Woodhead if the planning commission’s California Environmental Quality Act (CEQA) analysis had been appealed. Unite HERE Local 11, a union representing hotel and restaurant employees, had, indeed, done so, but no representative was on hand to address that. “Interesting leverage,” Murray muttered. Greenlaw management is slated to meet with the union this week. A hearing on the appeal is scheduled for next month. 

Until then, Tait made a motion to vote without giving any comments on subsidies, especially on the project’s lack thereof. With that, council voted unanimously 7-0 to approve the development agreement.