Disney wins tax deal in exchange for $1b pledge

Walt Disney Co has been granted an exemption from any future entertainment tax that might be levied on tickets to the Disneyland Resort. Photo / Paul Hiffmeyer

Walt Disney Co won a 30-year extension of a moratorium on ticket taxes in suburban Anaheim, California, in exchange for a commitment to invest $1 billion in its two parks there.

The City Council voted 3-2 on Wednesday to grant the company an exemption from any future entertainment tax that might be levied on tickets to the Disneyland Resort, home to the namesake theme park and California Adventure.

Construction will begin in 2017 on new attractions, a parking garage and road improvements to improve local traffic flow. The company will have until 2024 to confirm the value of improvements, according to an e-mailed statement from the city. Anaheim's resort district provides more than half of the city's general fund revenue - $148 million annually in hotel, sales, property and business license taxes.

"We applaud Anaheim's leaders for their continued foresight in ensuring the city remains a vibrant tourism destination by extending a proven policy that has created two decades of unprecedented economic and job growth," Michael Colglazier, president of the resort, said in a statement.

The measure replaces a 20-year exemption that dates to 1996 and ends in 2016. Burbank, California-based Disney would get tax relief for an additional 15 years if it invested significantly more than $1 billion, according to a June 25 statement from the city.

Anaheim's resort district provides more than half of the city's general fund revenue. Photo / Paul Hiffmeyer

The vote came after scores of public comments by residents and other interested parties, both for and against the agreement. The crowd at the meeting spilled out of the council chamber into the plaza outside City Hall. One opponent held a sign that read, "Help the needy, not the greedy."

The new policy would reimburse Disney if an entertainment tax is created, according to the city's statement. Mayor Tom Tait, R, opposed the deal, as did council member James Vanderbilt.

- Bloomberg