Anaheim Council Members Fund Chamber of Commerce Contract With Federal Relief Money

JULIE LEOPO, Voice of OC

The Anaheim City Council at its Oct. 29, 2019, meeting.

Anaheim Mayor Harry Sidhu pushed a Chamber of Commerce contract through the City Council as part of his $4 million economic bailout package, using federal coronavirus relief money. 

The agreement is aimed at encouraging a local shopping and hiring program.

“They are by far the most comprehensive representatives of the business community in Anaheim. They have already been doing some of the work for their members,” Sidhu said at Tuesday’s City Council meeting. “With this agreement they can really drive and expand this program with an online platform.” 

City Council members voted 6-0-1 Tuesday night to approve the $4 million bailout package, which included the $500,000 Chamber of Commerce contract. 

Councilman Jose Moreno abstained because of the chamber contract and Councilwoman Denise Barnes unsuccessfully tried to get the city’s Economic Development Department to handle the local dining and hiring program, but she eventually voted for the package. 

“Quite frankly the chamber, to me, should already have a program in place. Based on their usual and customary work, at least that’s what I’ve seen in other cities,” Barnes said.  

The two-page bailout package also reinstates the eviction ban, gives funding to struggling nonprofits and brings more coronavirus testing for residents. But it doesn’t list how much of the $4 million will be spent on each program. 

Instead, Sidhu presented where the spending would go at the council meeting: $1 million for rent relief, $1 million to the Anaheim Community Foundation to distribute to various nonprofits and $1 million for coronavirus testing and protective equipment for residents. 

Sidhu’s bailout package also extended fee waivers and other business incentives until the end of the year, which were originally put in place by his first relief package in March. 

But the Chamber of Commerce contract portion of the package prompted an argument between Moreno and council members Lucille Kring, Trevor O’Neil and Sidhu. 

“Over the past year we’ve had a contract with the Chamber of Commerce and it appears they have been very active in drumming up political support for the mayor during the time it was announced he was going to be under a recall,” Moreno said. 

“I am really disgusted with all of the threats and the undercurrents and always trying to find something … between the chamber and the mayor, Council member Moreno. It is appalling what you can dig up,” Kring told him. 

O’Neil said Moreno was promoting “political conspiracy theories” and said if he had legal concerns, he should take it up with the Fair Political Practices Commission — a state campaign watchdog organization. 

“Council member Moreno, I understand that you do not want to debate,” Sidhu said. “So you try to create controversy and make political attacks.” 

The Chamber of Commerce contract comes four months after Sidhu spearheaded an initial $15 million economic recovery plan in late March, which included a $6.5 million for Visit Anaheim, the advertising branch for the Disneyland-resort area that’s normally funded through a self-imposed bed tax by hotels. 

Former City Manager Chris Zapata raised concerns about the Visit Anaheim contract at the March meeting. 

Zapata was fired in April and no reason was given by the City Council.

The Visit Anaheim bailout has faced criticism for giving money to the resort advertising group while the industry is closed indefinitely during the pandemic. While Visit Anaheim officials said they rebooked numerous conventions a few months ago, most have been either cancelled or put on hold. The convention center is instead being used as a virus testing site.  

The OC Register editorial board called the Visit Anaheim contract a case of “misbegotten priorities.”

Buena Park City Manager James Vanderpool is slated to be Anaheim’s new city manager starting next month after the City Council quickly hired him without doing a broad search for Zapata’s replacement. 

The $4 million in new spending on Sidhu’s second economic relief package will come from the city’s $33 million in federal relief funds, according to a staff report.

The city is also backfilling Sidhu’s first $15 million economic bailout plan using the federal money, including the $6.5 million contract with Visit Anaheim, according to the OC Register

Meanwhile, the Anaheim Chamber of Commerce has been emailing its members over the past several months urging residents and businesses to leave positive social media feedback for Sidhu. The emails also encourage members to send emails to the public comment email to push for chamber-backed items, like the failed cannabis shops initiative a couple of months ago. 

“This is clear political promotion of our mayor,” Moreno told his colleagues Tuesday night.

According to campaign finance data, the Chamber of Commerce spent nearly $240,000 on Sidhu’s 2018 campaign for mayor. The entity paid for consulting services, digital advertising, polling and political mailers for Sidhu.

Last June, Sidhu successfully pushed a $425,000 Chamber of Commerce contract through the City Council. 

Barnes suggested city officials account for last year’s chamber contract before council members voted for another one. 

“We still haven’t heard the real results of that and I wanted to make sure we do report out on that. Because some of the deliveries weren’t all done because of COVID. But another $500,000, it makes me think taxpayers — they want to know what was done with the first money,” Barnes said. 

Interim City Manager Greg Garcia said the original contract was amended, which spurred the Chamber of Commerce to begin forming the local dining, shopping and hiring program. 

Last year’s chamber contract essentially stated the entity will help bring in new businesses and retain existing ones for Anaheim. Additionally, the contract called for full-page advertising of Anaheim in four issues of the chamber-run Business Advocate Magazine; a column promoting the city in its newsletter for 10 issues and in 40 issues of its e-newsletter; and social media promotions of Anaheim.

The Chamber of Commerce also lobbied the City Council to move forward with the Angel Stadium land sale last year, for a starting price of $325 million. But the final price tag is unknown because a community benefits agreement will ultimately lower that amount. 

Over the past month, Sidhu and the City Council majority have twice refused calls from Barnes and Moreno to publicly discuss potential community benefits agreements.

Chamber of Commerce executives also created Anaheim First, which is supposed to be a nonpolitical resident advisory committee aimed at recommending $250 million in new neighborhood spending over the next 10 years. The group got $250,000 in taxpayer money to begin studying neighborhood needs last year. 

But the group has been routinely criticized by some council members and residents as an extension of the Chamber of Commerce. Many of Anaheim First’s members are connected to the resort political action committee Support Our Anaheim Resort (SOAR), the Anaheim Chamber of Commerce and the resort district’s promotion group Visit Anaheim. 

Spencer Custodio is a Voice of OC staff reporter. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio