Anaheim City Councilwoman Natalie Rubalcava wants to use tourism tax dollars – intended to market and improve the resort district – to help fund a housing trust that could bring more affordable homes to Orange County’s largest city.
It’s money that state auditors in a report released earlier this year accused the Anaheim Chamber of Commerce of improperly using to lobby nearly two dozen elected officials and support the campaigns of resort friendly candidates for more than a decade.
The funds were given to the Chamber by the city’s tourism bureau – Visit Anaheim, the tourism promotion bureau the self-assessed hotel taxes were originally meant to fund.
[Read: Is it Legal to Spend Tourism Dollars to Lobby Elected Officials?]
The state auditor’s report came on the heels of sworn FBI affidavits in 2022 and an independent investigation report released in 2023 that both allege Disneyland resort interests exert undue influence over city hall.
During the Disneyland expansion discussion earlier this month, Rubalcava, who is facing a recall election in June, publicly asked Disneyland Resort President Ken Potrock what if they would be willing to direct a portion of tourism dollars used to support housing resort workers.
Potrock said they have discussed the idea with members of the resort community and called it a wonderful solution to bring a sustainable revenue stream to fund affordable housing.
“If we can do that,” he said at the April 16 city council meeting. “That money can be bonded and generate, again, a very high multiple of other opportunities for investment regardless of how you want to use that.”
Potrock said that the Disneyland Resort has supported in writing using some of that money for housing, but that they are not the sole decision makers.
“We are more than happy to take a leadership position, saying that we support it, and would ask people to follow our lead in that particular instance. I think that’s a really, really sound approach for trying to find another revenue source for affordable housing,” he said.
The discussion came right before Rubalcava and council members – a majority of whom had their campaigns heavily supported by Disney – unanimously approved a 40-year agreement to expand the company’s iconic theme park.
[Read: Anaheim Approves $2 Billion Disneyland Forward Expansion]
With the expansion, Disney representatives have promised to put $30 million over 5 years into a housing trust city officials are in the process of establishing in Anaheim. The specifics of the trust are still unclear.
A host of residents and activists questioned if it was enough to help address the housing needs in the city while city staff and Disney representatives say its the largest private investment towards housing the city has ever seen in a nonresidential project.
A recent progress report showed that about 80% of homes approved to be built last year in Anaheim were for above moderate income families and about 11% were for low income and very low income families.
The County’s median income is close to $128,000, according to the state’s Department of Housing and Community Development. A four-person household making less than roughly $115,000 a year is considered low income and less than nearly $72,000 is considered very low income.
Can Tourism Dollars Fund Affordable Housing?
The tourism money in question comes from a 2% tax local hoteliers impose on their rooms in the Anaheim resort area as part of the Tourism Improvement District the city established in 2010 for marketing the resort area.
In turn, the city collects that money then sends it to Visit Anaheim.
Following the release of the state auditor’s report at the end of January, Deputy City Manager Greg Garcia told council members that the tourism dollars could be repurposed but it would have to be up to the hoteliers themselves.
Mike Lyster, a city spokesman said in a Monday email, the city is in support of using some of the tourism dollars to help fund affordable housing in Anaheim.
“It’s too early to know exactly what could go to affordable housing. That is an ongoing discussion involving hoteliers who assess themselves for ATID,” Lyster wrote. “Changing funding is a matter of updating ATID bylaws, should hoteliers agree.”
Lyster added some hoteliers have expressed interest in repurposing the public tourism dollars for affordable housing.
The Anaheim Tourism Improvement District is made up of about 100 hotels and motels in the resort area.
The tax is projected to generate close to $31 million dollars for 12 months through this June, according to the city’s website.
The Shadow Cast by a Public Corruption Scandal
Rubalcava’s support for the idea comes as she is expected to face a recall election in June after independent investigators accused her of misconduct and opposed Measure A, a failed ballot measure that would’ve raised wages for hotel workers.
The councilwoman has publicly denied the allegations.
[Read: Who’s Spending in the Recall Election of Anaheim Councilwoman Natalie Rubalcava?]
Visit Anaheim and its spending became the focus point of a state audit after independent investigators found the tourism bureau took $1.5 million of the $6.5 million COVID relief dollars they were given by the city council and sent the money to a Chamber of Commerce controlled nonprofit.
[Read: Anaheim Officials Refuse To Audit Tourism Bureau’s Alleged Illegal Diversion of COVID Funds]
Investigators accused former Visit Anaheim CEO Jay Burress of being a part of a conspiracy concocted by former Mayor Harry Sidhu and former Chamber CEO Todd Ament.
Ament and Sidhu have both pleaded guilty to federal charges.
Burress resigned from his position at the tourism bureau last year.
State auditors found that the tourism bureau had millions in reserves from tourism tax dollars and the city did not need to send them the bailout money.
Hosam Elattar is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.
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