Disney Pulls Plug on Proposed Luxury Hotel in Anaheim, Citing Loss of Tax Break

The new hotel was set to open at the west end of the Downtown Disney District in 2021. (Credit: Disneyland Resort)

The new hotel was set to open at the west end of the Downtown Disney District in 2021. (Credit: Disneyland Resort)

The Walt Disney Co. has canceled plans to build a 700-room luxury hotel near its Anaheim resort, citing the city’s elimination of a tax rebate agreement that would have saved the media giant $267 million over 20 years.

The cancellation of the hotel — what would have been the fourth at the resort — highlights growing tensions between the Burbank company and the city of Anaheim, once considered a reliable business partner for Disney.

“While this is disappointing for many, the conditions and agreements that stimulated this investment in Anaheim no longer exist and we must therefore adjust our long-term investment strategy,” Disney spokeswoman Lisa Haines said.

The conditions changed in August when the city notified Disney representatives that it was killing an agreement made last year to rebate 70% of the hotel’s transient occupancy tax back to Disney over 20 years — worth about $267 million. The transient occupancy tax is 15% of the overnight rate.

Read the full story on LATimes.com.