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The Anaheim City Council voted unanimously Tuesday to put referendums on the November 2018 ballot that would revoke development agreements for two luxury hotel projects that have been controversial because of the generous tax subsidies attached to them.
But even if voters approve the two referendums – one for each hotel project – they would not stop the developer from going ahead with the projects or receiving city tax breaks, according to city officials.
Backed by UNITE-HERE Local 11, a union for Anaheim resort and hotel workers, the referendums ask voters to block two hotel projects by the Hong Kong-based Wincome Group. The projects were approved, along with more than $300 million in hotel tax subsidies, by a split City Council in July.
The hotel workers’ union didn’t oppose the projects until it became clear that Wincome Group wouldn’t agree to hiring union labor at the hotels. Union members gave full-throated support of a luxury hotel proposal by Disneyland, which also includes a large tax subsidy, because Disneyland promised it would only hire UNITE-HERE members at its hotel.
After they failed to gain any traction with the Wincome Group, the union launched a last-minute signature-gathering effort to oppose the projects, and in doing so seized on a wave of discontent over the subsidies, viewed by many residents as an example of the city’s focus on the welfare of the Anaheim resort district, not the wellbeing of everyday residents.
Although many voters believed the referendum was aimed for this November’s election, the deadline for ballot initiatives had passed by the time the union began collecting signatures.
However, because the union collected nearly 36,000 signatures within the 30-day window for voters to challenge a city ordinance, council members are required by the city charter to either rescind their earlier vote in favor of the development agreements or approve the referendum for a future ballot.
They ultimately decided to put the measure on the 2018 ballot rather than opt for the costly alternative of a special election.
Tuesday’s debate mirrored the July argument among council members in which the council majority – consisting of Councilman Jordan Brandman and councilwomen Kris Murray and Lucille Kring – argued in favor of the projects, while Mayor Tom Tait and Councilman James Vanderbilt characterized them as giveaways of taxpayer dollars.
And as they did at previous meetings on the issue, members of building trade unions, Anaheim resort business interests, members of the hotel workers’ union and residents against the subsidies packed the council chambers and spilled into an overflow room.
Tait and Vanderbilt pushed for a vote to rescind the development agreements altogether, but were overruled by the council majority.
Murray took the opportunity to call out the union for what she and many others see as blatant hypocrisy after it failed to strike a deal with the developers.
“[The referendum] didn’t even attempt to look in the direction of the Disneyland Resort because the organization seeking this referendum already has a contract with that entity,” said Murray. “This is solely going after a hotelier to create leverage.”
Tait remarked on the dichotomy between the many building trade union members in the audience pleading for jobs, and residents who view the hotel subsidies as corporate giveaways that take resources away from working class neighborhoods.
“It’s sad to see this big fight in town, working folks versus working folks, because of the subsidies,” said Tait. “What happened to the normal way of doing things – if there’s a market, there’s a market to build the hotel. If there’s no market, then they don’t.”
Cynthia Ward, a Republican who says she has become pro-union over the years, said the hotel subsidies pitted “hard working men and women against the taxpayers of Anaheim.”
“When those jobs are paid for out of dollars that we need to fix sidewalks and parks, that is the epitome of a giveaway,” Ward said.
Paul Sanford, an asset manager for the Wincome Group in Orange County, told the council that despite the company’s disagreement with the intent of the ballot measure, the council should put the referendum before voters.
“These people were promised an election. We urge you to give them that election,” Sanford said.
Sanford’s stand, however, is not a hard one for him to take. Because the referendum targets the development agreement, even if voters passed the measure, it would not stop the Wincome Group from constructing the hotels or receiving a subsidy.
Although the referendum would make it more difficult for Sanford to build the hotels, Wincome could begin construction before voters even have a chance to vote on the referendum in 2018.
The company already has the land use entitlements that it needs to pursue project approvals and begin construction on the property, said city spokesman Mike Lyster.
All the development agreement does is lock in current zoning on the property, establish certain public benefit agreements, and allows a longer period of time during which the company can preserve its rights to develop the property.
And though the city would have the power to change the zoning on the property, changing zoning is not easy and takes a long time, Lyster added.
“People develop in the city without agreements all the time…they have everything they need to develop,” said Lyster. “[The Wincome Group] would have to make a decision themselves if they would want to go forward without a development agreement.”
Jeff Flint, a spokesman for the Wincome Group, signaled that the company will continue moving forward on the project.
“We look forward to communicating with the voters about why these hotels are great for Anaheim, but while the election is pending, we will move forward with the approvals we have so we can get started creating jobs and generating new tax revenue to invest in Anaheim neighborhoods,” said Flint in an email.
Under the city charter, the hotel projects themselves aren’t subject to a referendum, and only the City Council has the ability to ensure the project doesn’t go forward at all, Lyster said.
And the subsidies, which were approved by a motion of the City Council, are not subject to a referendum. As long as the developer successfully builds and opens a four-diamond hotel, they can receive the subsidy for that hotel.
A referendum could target the city’s overall subsidy program for luxury hotels, but that would only apply to any future four diamond hotel projects, said Lyster.
UNITE-HERE Secretary Treasurer Ada Briceno said before the council meeting that union officials are confident about their strategy. “We believe this will stop the building of the hotels,” said Briceno.
Meanwhile, members of the International Brotherhood of Electrical Workers (IBEW), which supports the development deals, bristled at the actions of UNITE-HERE, saying that they too deserve their say as residents of the city and county.
“The building trades worked long and hard to get a deal. I don’t know where [UNITE] HERE was,” said Mangione. “I’m a little offended we’re not included in ‘the people.’”
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