Public commenters told the Anaheim City Council and its city attorney Tuesday that big hotels aren’t the only businesses affected by a proposed $18-an-hour minimum wage initiative on the Nov. 6 ballot.
West Anaheim resident David Klawe and resident Cynthia Ward, a candidate for mayor, asked the city attorney to address whether the wage initiative, which applies to businesses that receive tax rebates from the city, will affect the GardenWalk Mall, an outdoor shopping center across from Disneyland.
That apparently caught new City Attorney Robert Fabela, who started working for the city in April, by surprise.
“This was one that’s a byproduct of my lack of institutional knowledge. Based on what I’ve learned in the last 35 to 40 minutes – I think that’s a good catch,” Fabela said. “I want to confirm this and I can get back to the council, but it does appear that the shopping center and its tenants, assuming it has 25 or more employees, would be subject to it as well.”
That means the GardenWalk Mall and DoubleTree Hotel will have to pay higher wages if the initiative, known as Measure L, passes in November.
Measure L would require companies receiving tax rebates from the city of Anaheim to pay at least $18 an hour by 2022, with wages increasing based on the cost of living each year after.
Fabela recently submitted a memo to the City Council saying he does not believe the Disneyland Resort, which employs about 30,000 people, would be subject to the law, after the company cancelled two major subsidy deals earlier this year.
One of those subsidy deals was for a four-diamond hotel project, which was put on hold after a dispute with the city. The company announced Wednesday it has decided to kill the project entirely, according to the Orange County Register.
An attorney who authored the initiative, known as Measure L, on behalf of worker unions argues Disneyland would be subject to the ordinance and said it would be up to a judge to decide if the measure passes.
Until Tuesday evening, discussion of the minimum wage ordinance has largely focused on Disneyland and four proposed luxury hotel projects, two of which have begun construction.
As part of a 2013 legal settlement, the GardenWalk Mall receives a 50 percent rebate on sales taxes, a subsidy that expires at the end of 2038. The mall includes the House of Blues and restaurants like California Pizza Kitchen and Cheesecake Factory.
Fabela said he wasn’t aware of the GardenWalk deal until it was mentioned by the speakers and didn’t have the opportunity to fully analyze it. Councilwoman Kris Murray requested an analysis at a previous meeting on what businesses the ordinance would affect and how the new wage would compare to other cities in California with a minimum wage.
Councilwoman Lucille Kring, who once owned a business in the GardenWalk, also mentioned a deal for the DoubleTree Hotel approved in 2002. That agreement includes a hotel bed tax rebate, which expires in 2021.
“It is highly likely that the DoubleTree would fall under the tax rebate provision of Measure L,” said city spokesman Mike Lyster in an email Wednesday afternoon.
Fabela will analyze the GardenWalk and DoubleTree deals and report back to the city council at an upcoming meeting, Lyster said.
Austin Lynch, a spokesman for UNITE-HERE Local 11, one of the labor unions backing the initiative, said the union has not analyzed whether the initiative would apply to those businesses but “have no reason to disagree.”
The wage ordinance is the latest flashpoint in a long-standing and acrimonious disagreement between the current council majority, led by Mayor Tom Tait, and council members backed by Anaheim Resort business interests over the city’s use of subsidies.
During Tuesday’s meeting, Murray accused the unions of engaging in “a campaign of fraud, distortion and misinformation,” saying the unions “made it solely about Disneyland” and solicited “nearly a million dollars in special interest money” toward the measure and supporting candidates for city council.
When the unions, which included a coalition of Disney worker unions and UNITE-HERE Local 11, a hotel workers’ union, were gathering signatures – Disneyland still had the subsidy deals that would have made them qualify under the ballot initiative.
“[They] really showed their cards about the actual intent, that it was never about Disneyland,” said Murray. “This is a stepping stone to implementing it citywide, and they believe it will have a far greater breadth and scope immediately.”
Murray also referred to a letter from Richard McCracken, UNITE-HERE’s attorney, which stated it will be up to a judge to determine who the ordinance applies to. Both the unions and opposition campaign against Measure L have said they may sue if the measure passes over who the ordinance applies to.
“Anaheim residents have been put on notice tonight that they will be sued under a costly litigation,” Murray said.
Tait pushed back at Murray, who has said the potential effects of Measure L are far-reaching and may impact small business owners.
“You’re scaring small businesses by saying this is going to affect them. It’s misleading,” Tait said. “If you’re not receiving a massive subsidy, the minimum wage will be the same as the state of California.”
The measure applies to businesses with over 25 employees that are a “contractor or subcontractor, lessee or sublessee, tenant or subtenant” of a company receiving the subsidy, according to the text of the proposed ordinance. Small businesses can apply for a one-year hardship exemption, which is decided by the city manager’s office.
Councilman Jose Moreno, the only council member to openly support the minimum wage measure, said Disney could win a majority of council seats in November and return to ask for subsidies after the defeat of Measure L.
“If Disney has its way in this election, it’s another worthwhile investment – a million [dollars] in an election so you can get a $300 million subsidy,” Moreno said.
Disney spent at least $671,000 in the 2014 election and $1.22 million in 2016.
“If a future council decides to provide hundreds of millions in subsidies, at least it’s returning money back to the people’s pockets. I think that’s a pretty good protection to keep people from promoting crony special interests,” Moreno said.
Murray brandished a campaign disclosure form that she said shows spending by the unions in support of Moreno, who is running for re-election this year, and Ashleigh Aitken, a candidate for mayor.
“You keep talking about Disney funding campaigns, Disney funding campaigns – your mail is being funded by UNITE-HERE, SEIU, and the proponents,” Murray said. “The fact is the proponents of this are funding and giving you quite a big boost with the million dollars they are generating in special interest funding.”
The Yes on Measure L campaign spent $307.82 on literature for Moreno and $1,383.32 for Aitken, according to campaign disclosures.
Disneyland, local businesses and labor unions have all spent hundreds of thousands of dollars to influence voters on the minimum wage ballot measure.
William O’Connell, one of the developers of the DoubleTree Hotel, reported giving $208,000 Oct. 5 to the No on Measure L campaign. His partner, Ajesh Patel of Prospera Hotels, reported giving the same amount that day, although it’s unclear whether those are the same or two separate donations.
O’Connell is also behind the two GardenWalk Hotel projects with tax rebates, which the city attorney says would be affected by the initiative. One of those hotels, a JW Marriott, has begun construction.
Disney has given at least $304,160 this year to the No on the Anaheim Job Killer Initiative campaign committee. The company has poured far more — $635,000 so far this year – into Support Our Anaheim Resort, a political action committee that is spending heavily on city council races.
FJS Inc., the developer of a subsidized hotel on the site of the old Anabella Hotel, has given $23,210, while Good Hope International, representing another subsidized hotel project, also gave $23,210.
O’Connell’s wife Jean and Patel each gave $23,210 to the committee as well.
To date, the Yes on Measure L campaign has raised more than $1 million this year from a number of unions, including $356,014 from UNITE-HERE Local 11 and $272,669 from Workers United Local 50, according to a brief review of recent campaign filings. The Democratic Party of Orange County gave the committee $50,000.
Moreno said wasn’t aware of the spending from the union on his behalf because of limits on coordinating with independent expenditure committees, and said Murray has “been campaigning for a year” for Supervisor.
Murray is termed out and has announced her bid for Third District Supervisor should the current incumbent, Supervisor Todd Spitzer, be elected the new District Attorney.
“You converted your councilwoman Facebook to your supervisor campaign Facebook,” he said.
He went on to warn Anaheim voters about a concerted campaign to fund Disney-preferred candidates, prompting Murray to interrupt and accuse Moreno of giving a “blatant campaign speech on the city dime.”
The conversation quickly boiled over.
“You would never let another member of this council make that speech, Mr. Mayor,” Murray said.
“This is a campaign issue you brought up,” Tait replied.
“As it pertains to Measure L, not candidates on the ballot,” Murray said.
Tait began banging his gavel and suggested the council recess to “take a time out,” prompting Murray to tell Tait he should apply the rules of the meeting to all members of the council.
“I know you want to be the mayor,” Tait said.
“No, I don’t want to be the mayor,” Murray replied.
“If you want to be the mayor you should have run four years ago,” Tait said, beginning to walk off the dais for the recess.
“For how long – until you feel your pride comes back?” Kring said, as the mayor left the room.
When the meeting reconvened, the council voted to receive and filed the report.
Contact Thy Vo at [email protected] or follow her on Twitter @thyanhvo.