Anaheim Exempts Disney From Living Wage Law, DoubleTree Hotel Workers Get Raise

If the Disneyland Resort is ignoring Anaheim’s new living wage law, the city sure ain’t giving them reason to pay it any mind. Passed by voters in November, Measure L became effective on Jan. 1, 2019. It holds that resort-area corporations with tax rebate agreements must pay workers $15 an hour this year–annual dollar increases tip the scale to an $18 hourly wage by 2022. Overseeing the new law, Anaheim sent posters with wage requirement information to a handful of hotel businesses, but not the Disneyland Resort.

“Disneyland does not fall under the new ordinance, per a review by our city attorney with the assistance of outside counsel,” says Mike Lyster, city spokesman. “Disney does not receive or hold agreements for tax rebates or an entertainment tax policy, which are the key triggers of Measure L.”

Back on Oct. 9, city attorney Robert Fabela issued a non-binding legal opinion before the election stating much the same. By then, Anaheim city council cancelled two tax rebate agreements with the Disneyland Resort in August at the Mouse’s request. A decades-long entertainment tax ban got scrapped as well as $267 million in bed tax rebates for a planned luxury hotel.

All that remained? A 1996 Disneyland expansion deal where Anaheim issued $510 million in bonds to make resort-area improvements, including paying for the $108 million Mickey & Friends parking structure and renting it to Disney for a dollar per year. In exchange, Disney invested $1.4 billion in opening California Adventure, Downtown Disney and the Grand Californian Hotel. Anaheim continues to divert revenue from the general fund to pay off the massive bonds, mostly with hotel, sales and property taxes generated by the Disneyland Resort through 2037 making the agreement current, but ultimately not applicable in Anaheim’s view.

“We didn’t see a discount in Disney’s tax payments or any sort of refund of the taxes they were paying,” Fabela said on Oct. 9, assessing the ’96 deal. “It’s complicated but we’re pretty clear it doesn’t amount to a tax rebate as defined or set forth by Measure L.”

The city attorney’s legal opinion of the measure before the election is now guiding Anaheim’s implementation of it after the vote.

“The city knows that there’s disagreement and it’s unfortunate that they’re weighing in on behalf of Disney by excluding them,” says Ada Briceño, co-president of Unite Here Local 11, a union that represents Disney hotel workers. “This is what the voters of Anaheim said that they wanted done.”

This week, the Disneyland Resort raised starting pay for security staff to $16.60 an hour after reaching a new contract with the union that represents them. It joined the corporation’s previous efforts to boost wages to $15 an hour for union and non-union “cast members” alike. Now, the Disneyland Resort proudly notes that 75 percent of its 30,000 workforce will make $15 an hour or more by Jan. 31 when hotel workers are set to get a raise.

“We are proud to have implemented a $15 minimum wage for the majority of our cast members three years ahead of California’s requirements,” Liz Jaeger, Disneyland Resort spokeswoman, tells the Weekly. “We’re also excited by the response that we’ve received to Disney Aspire, our groundbreaking educational program that allows our cast to go to college and pursue a degree with 100 percent of the cost covered by Disney.”

In the meantime, the DoubleTree Suites by Hilton, a non-union hotel, is the only up-and-running resort-area business to comply with the living wage law–even if it arrived in the debate as an afterthought. Back in July 2002, Anaheim city council originally approved a 50 percent bed tax subsidy for the DoubleTree Hotel project. Construction of the hotel finished four years later, and, by city staff calculations, the tax rebates will continue through 2021–when the living wage law prescribes a $17 an hour salary.

Anaheim also determined that hotel projects by Wincome Group and the JW Marriott at the GardenWalk would be subject to the wage law once completed and staffed. In the election battle over Measure L, opponents suggested that its passage could lead to the cancellation of both a Wincome and GardenWalk hotel that are already on hold and haven’t yet begun construction, killing jobs off along the way. Jeff Flint, a spokesman for Wincome, declined to comment for this story when reached by phone. Fabela briefly considered the GardenWalk itself to be applicable once it was pointed out to him that it had a sales tax rebate agreement reaffirmed with the city in 2013, but as a shopping mall, it didn’t fit the definition of businesses targeted under the ordinance.

Theme parks, on the other hand, are explicitly defined in the law’s language, but disagreements continue over what constitutes a tax rebate subsidy as a condition of its applicability. Richard McCracken, the principal author of the ordinance, has argued before that Disney reaps the economic value of its taxes being diverted from the city’s general fund to pay for bonds as part of the ’96 expansion deal and that such financing amounts to a “tax rebate.” The Measure L campaign hit voters with flyers featuring Disney workers in hammering home the message that the living wage law would, indeed, apply to the House of the Mouse.

With Anaheim’s determination that the Disneyland Resort is exempt and thousands of cast members still under contracts making the state’s lower minimum wage, the dispute may be headed for litigation.

“We’re very proud of the residents of Anaheim and our workers who understood that this is important and now the law of the land in the city,” says Briceño. “We will take every measure possible to make sure that the law is fully implemented.”