ANAHEIM, Calif. -- A few hours after the gates swing open at Disneyland and Disney California Adventure, the cars are still pouring into the 10,241-space parking garage.
They zoom into the six-story concrete structure, carloads of costumed kids, foreign tourists and graying baby boomers sporting Mickey Mouse ears, Frozen dresses and Star Wars backpacks.
The cash pours in too: Each vehicle pays $20 to park at the Mickey & Friends facility, $35 for a preferred space close to the escalators and elevators.
Even if the parking garage fills just half its spaces, it would still generate more than $35 million in annual revenue and easily hundreds of millions of dollars over the life of the structure.
That money all goes to Walt Disney Co. The city of Anaheim, which owns the garage and spent $108.2 million to build it, charges the company just $1 a year for the lease.
More than 20 years after Anaheim agreed to pay for the parking facility as part of Disneyland Resort's expansion, it has become a symbol of the Los Angeles-area city's complicated and increasingly tense relationship with its biggest and most powerful corporate citizen.
Over the past two decades or so, as Disney's annual profit has soared, the company has secured subsidies, incentives, rebates and protections from future taxes in Anaheim that, in aggregate, would be worth more than $1 billion, according to public policy experts who have reviewed deals between the company and the city.
Disney has negotiated these pacts with a carrot-and-stick approach -- one that has often included the company's threat of directing its investment dollars elsewhere. The agreements have spurred development of billion-dollar projects, including the California Adventure theme park and the forthcoming Star Wars: Galaxy's Edge area at Disneyland.
Support for various deals benefiting Disney has come from Anaheim City Council members who have received generous campaign contributions through a byzantine network of political action committees funded by the company.
But now, for the first time in Disneyland's 62-year history, the entertainment giant is facing serious opposition from Anaheim politicians, including Mayor Tom Tait, who say the recent guarantees in particular were too much. The city's finances are squeezed for a variety of reasons -- it has, for example, unfunded pension liabilities of $590 million. Despite the tens of millions of dollars in tax revenue and high-profile benefits that Disney brings to Anaheim, some of the city's working-class residents said they don't see enough of the upside.
In a letter to the Los Angeles Times, Disney challenged that view. "Disneyland Resort has played a pivotal role in Anaheim as a job creator and economic engine," the company said, noting that it is committed to investing more than $2 billion there in the next decade.
Faced with growing criticism inside City Hall, last year Disney stepped up its local political spending, contributing $1.22 million to 10 PACs that were involved in the November election, according to an analysis of campaign finance disclosures by the Times. The PACs, most of which also spent money on elections outside Anaheim, received funds from multiple sources, though Disney was often a significant donor.
Even with Disney's large PAC contributions -- which dwarfed the money raised by the candidates it opposed -- two politicians supported by the company lost to reform candidates, flipping the balance of power on the council. Now, Disney's ability to extract lucrative deals from the city is in question.
"Some of the big projects that they may be thinking about -- some of the money they want to siphon off from the city -- will probably get postponed," said City Councilman Jose Moreno, who defeated incumbent Jordan Brandman, a beneficiary of more than $250,000 spent by Disney-backed PACs. "It is about being pro-neighborhood, pro-city."
The election offered a measure of vindication for Tait, who for years has been a critic of the Disney pacts.
"A lot of these things aren't a natural, normal thing for any city to do," the mayor said. "It is way too much."
Disney declined requests to interview company executives.
In a statement, the company disputed the Times' estimates and analysis valuing Disney's Anaheim incentives at more than $1 billion, arguing that future benefits and protections to the company shouldn't be part of the calculation. Two experts said the estimate is reasonable and that the deals should be included in any calculation of Disney's financial benefit.
Disney also said that its investments far outweigh the value of the deals from Anaheim and that it is contributing more than its fair share "despite what people with their own political agenda are insinuating."
Disney is Anaheim's largest employer and taxpayer. About 30,600 people work at Disneyland Resort, accounting for nearly 19 percent of Anaheim's jobs, based on a recent city report. The Anaheim Resort District, which includes two Disney theme parks, the convention center and dozens of hotels, is expected to account for $171.9 million in tax revenue during the fiscal year that ends next June -- or 43 percent of general fund revenue.
According to the company, in 2016 Disneyland Resort "paid more than $125 million in taxes, bonds, levies, fees and contracts, directly benefiting Anaheim, its residents and local schools."
Disney has also taken steps to unburden Anaheim: Since 1992, the company has paid the city for police service at its resort property, and has done the same for fire and paramedic service since 2000; those contracts now generate more than $10 million a year for the city.
Business on 09/30/2017