Why is the hotel project important to Anaheim?
The GardenWalk hotel project will create more than 4,500 total jobs in Anaheim at a time when the city has more than 17,000 unemployed residents. Specifically, 3,200 skilled construction jobs will be created – a boon to an industry sector that has been reeling from 40 to 50 percent unemployment since the recession began. Once completed, the hotel will employ another 1,300 permanent jobs.
In addition to the jobs, these hotels will generate $308,988,407 in tax revenue during the first 25 years of operation as well as generate higher property taxes and create increased sales tax.
NO! Despite information that is circulating, the rebate does not begin until the first guests check-in. The agreement states that 80 percent of the bed tax that would be collected from patrons at these hotels (known as the TOT) would be rebated for 15 years in order to make it possible for the project builders to secure the private investment of nearly $300 million to build the two hotels. The remaining 20 percent of the TOT will accelerate paying off the resort district bonds that paid for the re-vamping of the resort area in the 1990s.
This project will create 4,500 jobs and generate $308,988,407 in tax revenue. The benefits, however, don't stop there. These two properties will reinvigorate the GardenWalk entertainment/retail center, which has struggled since it opened in the depths of the recession. Retailers and restaurateurs will be lured by the purchasing power of the nearly 3,400 nightly guests staying in the hotels. As vacant spaces in the retail center are leased out, retail jobs at the GardenWalk will be created – as many as 2,000 additional permanent jobs. This synergy between the GardenWalk hotels and the adjacent retail center is expected to triple the shopping center's annual gross sales, providing the city with an additional $1 million in annual sales tax revenue.
Anaheim has a long history of public-private partnerships including the development of the Honda Center, Angels Stadium, the Convention Center and resort district. Furthermore, Anaheim must compete with neighboring resort- friendly cities that offer hotel developers free land in addition to rebating up to 100% of TOT and half the sales and property tax revenues.
Anaheim stands to miss out on millions of dollars. Given the current state of the economy and challenges in securing private financing for a project this large, numerous financial experts agree that it would be at least five to seven years before a project like this could be built. In other words, the alternative to this agreement is a vacant lot generating no jobs and no tax revenue.
Since convention business is critical to Anaheim's economic health, attracting four-star level hotels to Anaheim is vital for keeping Anaheim competitive with other convention cities. Guests at four-star level hotels stay longer, pay higher room rates, and spend more per-capita during their visits, which ultimately generates more tax revenue for the City.