Hotel Developer Still Wants $158-Million City Subsidy


The GardenWalk center in Anaheim's resort district.

A luxury hotels developer who was set to receive a controversial $158-million tax subsidy from Anaheim until it was voided in court last month is now asking that the City Council give it back.

The developer, Bill O’Connell, is requesting that the council consider granting the subsidy at the Jan. 29 council meeting, according to his Jan. 10 letter.

The City Council first granted the subsidy to O’Connell’s partnership, GardenWalk Hotel I, in January 2012. The 3-2 vote revealed a spit on both the City Council and in the community, with neighborhood activists and good-government advocates pitted against a group of construction trade unions and influential business lobbyists closely linked to O’Connell.

Last month, an Orange County Superior Court judge voided the subsidy vote on grounds that it violated the state's open meetings law, known as the Ralph M. Brown Act. Judge Steven L. Perk ruled that the subsidy approval was not adequately described as a possibility on the council meeting agenda.

For O'Connell to get his subsidy, the City Council must approve it again.

The subsidy would allow the developer to collect 80 percent of room tax revenue generated over 15 years after the two planned hotels are built. Supporters said the hotels can’t be built without it. The project will benefit the city because it is expected to create thousands of jobs, generate visitors for the city’s convention center and produce tax revenue in the long-term, supporters argued.

Opponents say that the subsidy should not be granted without negotiating in return significant public benefits such as living-wage jobs for the city’s working-class neighborhoods. Some residents complained that the subsidy was an insult because basic services in their neighborhoods have been cut.

Anger in those neighborhoods exploded last summer during weeks of unrest and a riot downtown after a pair of fatal police shootings.

It is not yet known whether O'Connell will get his wish to have the subsidy on the Jan. 29 council meeting agenda.

The city’s mayor and city manager control the meeting agenda, but Mayor Tom Tait and City Manager Bob Wingenroth have both opposed the subsidy. Two council members can place items on future agendas during council meetings.

The council membership has changed since the subsidy was approved, but the division remains. Councilman Jordan Brandman, a firm backer of the subsidy, was supported heavily during last year’s council race by political action committees that received thousands of dollars from partnerships involving O’Connell and his partner, Ajesh Patel.

New Councilwoman Lucile Kring has said she favors negotiating public benefits from the developer. Two other council members — Kris Murray and Gail Eastman — voted for the subsidy last year and have remained supporters.

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