Disney officials informed Anaheim Wednesday that they have canceled plans for a 700-room luxury hotel at Disneyland Resort in light of the city's decision to scrub tax-incentive deals for the project.
The Anaheim City Council voted Aug. 28 to cancel the tax-incentive deals because the project had changed over time, including a new location.
Council members also said they were concerned the new location would shutter businesses, costing jobs.
Disney officials at the time denied making substantive changes to the project, and said the location shift was minor and still in the same general area.
Disney spokeswoman Lisa Haines told the Los Angeles Times that while the cancellation of the project "is disappointing for many, the conditions and agreements that stimulated this investment in Anaheim no longer exist and we must therefore adjust our long-term investment strategy."
The tax deals were originally meant to spur Disney to build the luxury hotel at the resort and spend millions to expand the company's two theme parks. Construction was scheduled to start this summer, but it was put on hold over details on the development.
The hotel was expected to open in 2021 and be the company's fourth at the Disneyland Resort.
"I can't imagine a better piece of property for a hotel in the entire country," Mayor Tom Tait said Wednesday. "And Disney should be able to do it with their own money and not ours."
Tait added, "If a hotel doesn't make sense, maybe they've got something better in mind, or even more profitable."
Tait said state law prevented the city from providing tax subsidies for the project after Disney moved it from a parking lot to another location within Downtown Disney.
"They got the agreement passed with the old council and state law requires a jobs analysis before giving money from a city, and that jobs analysis then was starting at zero because it was going to be on a parking lot and now they've moved it," Tait said.
The more recent project would "take out 130,000 square feet of retail space and 450 jobs," Tait said.
"And you can imagine if those 450 people knew about this when they asked for that agreement they would all show up at City Hall demanding why would we be giving incentives to take their job away," Tait said.
At Tuesday night's council meeting, the city attorney announced that Anaheim had determined that Measure L, which seeks to raise the minimum wage in the city to $15 per hour for workers at projects subsidized by tax breaks, did not apply to Disneyland because it no longer had the incentive agreements with the city.
Measure L was drafted to target Disneyland Resort, but the company has since come to an agreement to raise wages for most of its employees.