Anaheim Council Set to Discuss Subsidy for Another Hotelier

The Anaheim City Council is scheduled Tuesday night to discuss a tax subsidy extension to the developer of a four-star hotel in the city's resort district as controversy over another hotel tax subsidy granted earlier this year continues to simmer.

The subsidy deal before the council would allow Lake Development-Anaheim to collect up to $44 million in room tax revenue over 15 years, although a city-hired consultant projects the developer will actually collect $19.4 million, according to a city staff report. The subsidy, first granted in 2009, now requires an extension to remain valid.

The staff report states the developer is seeking a two-year extension on a requirement to submit construction drawings and a two-year extension to begin construction, bringing the new proposed groundbreaking date to March 30, 2015.

A tax subsidy approved by City Council in January allowed the developers of two four-star hotels near the GardenWalk to collect 80 percent of the project's room tax revenue over 15 years, projected to be $158 million.

The GardenWalk hotels subsidy, which is much larger than the subsidy being considered for the Lake development, led to a heated debate in the community and a split on the City Council, with Councilwoman Lorri Galloway and Mayor Tom Tait lining up against Councilman Harry Sidhu and Councilwomen Gail Eastman and Kris Murray.

Supporters of the GardenWalk hotels subsidy said that it was needed to jump-start development of the hotels and generate thousands of desperately needed jobs. Those against the deal said it was negotiated without any community benefits in return and gives an unfair competitive advantage to the hotels' developer.

Larry Lake, a developer with Lake Development-Anaheim, has proposed building a nine-story, 252-room hotel at Harbor Boulevard and Katella Avenue, which is within two blocks of the GardenWalk hotels' project. A staff report estimates that the project will generate 1,400 construction jobs and 400 permanent jobs.

Like many developers, Lake, has contributed to the campaigns of all five members of City Council. Here is a rundown of the contributions from Lake or his firm between 2008 and 2011, taken from financial disclosure forms:

  • Mayor Tom Tait: Larry Lake contributed $1,000 to Tait's City Council campaign on Nov. 13, 2009. His firm, Lake Development-Anaheim, gave $500 to Tait's campaign on Oct. 25, 2011.
  • Councilwoman Lorri Galloway: The Lake Development Group gave Galloway's council campaign $1,000 on Oct. 17, 2008, and $500 on April 28, 2008.
  • Councilwoman Kris Murray: Lake Development-Anaheim gave Murray's council campaign $500 on Oct. 25, 2010.
  • Councilwoman Gail Eastman: Lake Development Group gave Eastman's 2008 council campaign $1,000 on Aug. 25, 2008.
  • Councilman Harry Sidhu: Lake gave Sidhu's 2008 council campaign $1,500 on Sept. 18, 2008.

Sidhu is the target of an district attorney's inquiry into whether he received illegal campaign contributions from entities connected to Bill O'Connell, the developer of the Garden Walk hotels.


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