ANA­HEIM FIRMS MAY BE FORCED TO PAY THEIR WORK­ERS A ‘LIV­ING WAGE’

The Gulf Today - Business - - SPECIAL REPORT -

Ana­heim: When vot­ers in Ana­heim, Cal­i­for­nia, go to the polls Nov. 6, they will de­cide whether large hos­pi­tal­ity com­pa­nies that re­ceive a tax re­bate from the city will be forced to pay their work­ers a “liv­ing wage.”

What is un­clear is whether the ini­tia­tive, Mea­sure L, will ap­ply to the city’s big­gest em­ployer of all, the Dis­ney­land Re­sort _ an un­cer­tainty hing­ing on how to in­ter­pret a decades-old agree­ment to build a $108-mil­lion park­ing garage for the re­sort.

The lead­ers of the unions that rep­re­sent the Walt Dis­ney Co. work­ers _ the same ones who col­lected about 20,000 sig­na­tures to put the ini­tia­tive on the bal­lot _ say the mea­sure cer­tainly ap­plies to the pop­u­lar Ana­heim re­sort.

“They know it does ap­ply to them but they are not go­ing to say it,” said Austin Lynch, or­gan­is­ing di­rec­tor for Unite Here, the union that rep­re­sents ho­tel work­ers, food ser­vice em­ploy­ees and oth­ers in Or­ange County.

The city of Ana­heim dis­agrees but has yet to is­sue a for­mal opin­ion, and of­fi­cials with the Bur­bank me­dia and entertainment com­pany won’t com­ment on the mat­ter.

The mea­sure asks that “hos­pi­tal­ity in­dus­try em­ploy­ers lo­cated in the Ana­heim or Dis­ney­land Re­sort Spe­cific Plan Zones that have tax re­bate agree­ments with the city” be re­quired to in­crease their min­i­mum wage and raise it an­nu­ally to re­flect the cost of liv­ing.

AGREE­MENTS

Un­til re­cently, the re­sort had two tax re­bate agree­ments with the city: A 2016 deal to re­im­burse the re­sort $267 mil­lion in ho­tel taxes if Dis­ney agrees to build a lux­ury ho­tel in the re­sort; and a sec­ond agree­ment that en­sures the city won’t adopt any entertainment taxes for 30 years in ex­change for the re­sort’s promise to in­vest $1 bil­lion in the re­sort.

At the re­quest of the re­sort’s pres­i­dent, who said the tax breaks were caus­ing strife with the city and its res­i­dents, the Ana­heim City Coun­cil voted unan­i­mously last month to end both agree­ments.

Dis­ney also put on hold its plans to build a lux­ury ho­tel in the Down­town Dis­ney shop­ping district. Sev­eral busi­nesses, in­clud­ing pop­u­lar eater­ies, were closed to make way for the ho­tel con­struc­tion. Food trucks have been de­ployed to fill the din­ning gap. The move by the coun­cil to kill the tax sub­sidy deals seemed to have guar­an­teed that Mea­sure L wouldn’t ap­ply to the 30,000 work­ers at the Dis­ney­land Re­sort.

But un­der a 1996 agree­ment to build the six-story park­ing garage, the city is­sued 40-year bonds and agreed to pay them off with taxes col­lected mostly from Dis­ney but also from bed taxes from ho­tels through­out the city.

Mean­while, Dis­ney col­lects the park­ing rev­enue from the garage _ more than $35 mil­lion a year. Once the bond is paid off, the city has agreed to trans­fer own­er­ship of the garage to the re­sort.

Richard Mc­cracken, an at­tor­ney who helped draft the bal­lot ini­tia­tive on be­half of the union, says the deal fits the bal­lot mea­sure’s def­i­ni­tion of a tax re­bate be­cause taxes col­lected by the city are be­ing used to ben­e­fit the re­sort.

“This bond fi­nanc­ing was ar­ranged to help Dis­ney and all of the taxes used to pay for the bonds will be go­ing to ben­e­fit Dis­ney,” said Mc­cracken, a long­time labour lawyer who helped write sev­eral “liv­ing wage” or­di­nances through­out the state.

Other le­gal ex­perts say the le­gal ques­tion is not so clear cut, sug­gest­ing that the dis­pute may ul­ti­mately be de­cided in a court of law if the mea­sure passes and Dis­ney re­fuses to pay the higher wages. Michael Thom, an as­sis­tant pro­fes­sor in pub­lic pol­icy at USC and ex­pert on pub­lic fi­nance and tax in­cen­tives, lines up on the side of those who thinks the mea­sure doesn’t ap­ply to the Dis­ney­land Re­sort.

He notes that the 1996 agree­ment does not re­turn any taxes di­rectly to the Dis­ney­land Re­sort but in­stead uses them to pay off the con­struc­tion bond.

“I doubt the 1996 agree­ment re­gard­ing the park­ing struc­ture can be in­ter­preted as a sub­sidy as de­fined in the or­di­nance,” he said.

Kirk Stark, a UCLA pro­fes­sor of tax law and pol­icy, also thinks the park­ing garage deal may not fit the def­i­ni­tion of a tax re­bate but he is not as cer­tain.

“You could eas­ily see peo­ple mak­ing ar­gu­ments on both sides” of the de­bate, he said. “It all turns on how one in­ter­prets those words.” If the ques­tion ends up in lit­i­ga­tion, Stark said a judge may con­sider the in­tent of those who brought the mea­sure for­ward.

Mean­while, Ana­heim vot­ers will get con­flict­ing mes­sages from sup­port­ers and op­po­nents about the mea­sure, with op­po­nents say­ing it clearly does not ap­ply to the Dis­ney­land Re­sort.

Todd Ament, pres­i­dent of the Ana­heim Cham­ber of Com­merce and mem­ber of a coali­tion of busi­ness lead­ers that has cam­paigned against Mea­sure L, ac­cused Mc­cracken of mislead­ing vot­ers.

“The lawyer for the pro­po­nents is sim­ply mouthing the words his client asked him to for po­lit­i­cal pur­poses to try to sal­vage a cam­paign that no longer has any sig­nif­i­cant pur­pose,” he said.

De­spite re­peated re­quests, Dis­ney of­fi­cials have de­clined to com­ment on the de­bate, re­fer­ring all ques­tions on the mea­sure to the city of Ana­heim.

PART­NER­SHIP

Michael Lys­ter, the city’s spokesman, is­sued a state­ment say­ing “the ini­tia­tive does not ap­pear to cover the 1996 pub­licpri­vate part­ner­ship be­tween Ana­heim and Dis­ney, fo­cus­ing in­stead on tax re­bates and the entertainment tax pol­icy.”

“But we do not yet have a de­fin­i­tive le­gal de­ter­mi­na­tion,” he added.

“Typ­i­cally, we don’t weigh in on is­sues com­ing be­fore vot­ers. We tend to leave that to vot­ers and those on ei­ther side of on an is­sue.”

At the re­quest of Ana­heim Coun­cil­woman Kris Mur­ray, the city at­tor­ney is sched­uled to dis­cuss the mea­sure dur­ing the coun­cil’s Oct. 9 meet­ing and of­fer a le­gal opin­ion on whether it ap­plies to the Dis­ney­land Re­sort.

The mea­sure, if ap­proved by a ma­jor­ity of vot­ers, would re­quire hos­pi­tal­ity busi­nesses with more than 25 em­ploy­ees to pay work­ers a min­i­mum of $15 an hour start­ing Jan. 1, 2019, with salaries ris­ing $1 an hour ev­ery Jan. 1 through 2022. Once the wage reaches $18 an hour, annual raises would then be tied to the cost of liv­ing.

The re­sort re­cently reached a con­tract agree­ment with four unions, rep­re­sent­ing 9,700 work­ers. The three-year con­tract raised the min­i­mum hourly rate of $11 to $13.25 im­me­di­ately and to $15 start­ing in Jan­uary. An in­crease to $15.50 an hour is slated for June 2020.

If the bal­lot mea­sure is ap­proved, it would su­per­sede the union con­tracts and would ap­ply to all 30,000 work­ers who make less than $15 an hour in the re­sort.

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