Starting next year, tourists visiting Anaheim’s Disneyland resort will help fund housing for theme park and hotel workers as officials look to boost the city’s stock of homes for low income residents.

It comes as the new Anaheim Chamber of Commerce and a former state auditor call for greater public transparency and oversight of how tourism tax dollars and ensure the money doesn’t favor certain hotels.

The chamber’s previous leadership was a key component in the corruption scandal that rocked city hall in 2022. 

Last Tuesday, Anaheim City Council members voted unanimously to reallocate 9% of the annual tourism tax dollars towards supporting workforce housing in a city where Disneyland Resort interests continue to spend heavily on local elections.

[Read: Tourists Could Soon Help House Disneyland Resort Workers]

Disney-backed Councilwoman Norma Campos Kurtz thanked the hoteliers and said the allocation will help their employees and make a difference in their lives.

“Their employees live very far and are struggling to get into the hotels to work or they are living in conditions that are not helpful to the health of their families. Also there is a great desire of some of those employees to establish themselves in Anaheim – to buy a home,” she said.

“The programs they’re considering will enable them to do that.”

Councilwoman Norma Campos Kurtz listen to audience speakers during the council meeting at Anaheim City Hall on April 16, 2024. Credit: GIL BOTHWELL, Voice of OC.

Councilman Carlos Leon said the reallocation of funds is another tool for the city to address their housing needs and help prevent homelessness.

“It’s a great example that’s going to help residents in our city, future residents of our city, the workers that really make the resort district in our city run and happen,” he said.

The money stems from the resort industry’s self-imposed, additional 2% room tax on resort hotels in 2010 – originally conceived to market the Disneyland Resort through the Anaheim Tourism Improvement District.

Visit Anaheim gets 75% of that money and is supposed to secure bookings at the city-owned convention center and boost hotel stays through advertising. The other 25% is placed in a separate fund allocated for transportation needs in the resort area.

That fund was recently examined by state auditors, who concluded last year Visit Anaheim – the city’s tourism bureau –  improperly gave millions to the Anaheim Chamber of Commerce, which then used it to lobby elected officials.

State auditors took interest in how the tax money was spent after FBI agents and independent investigators separately concluded Disneyland resort interests hold outsized influence over city hall.

Now, the chamber under new leadership along with executives of a public relations firm that assisted them with the state audit are calling on the city to require approval of all tourism tax budgets in publicly noticed meetings.

They’re also calling for the city to prohibit double billing hotel operators in the district and to ensure that all businesses who pay the tax receive the same level of service in marketing without favoritism.

The front gate of Disneyland in Anaheim, Calif. on Tuesday, Oct. 17, 2023.

In a joint letter, Balance Public Relations executives Dean Florez, a former state senator and assemblyman, and Elaine Howle, a former state auditor, said Anaheim leaders have an opportunity to set a new state standard for tourism district accountability.

“Anaheim now stands at a crossroads. The City can either reaffirm the integrity of its public finance system or risk repeating the same governance failures that drew statewide scrutiny in 2023,” reads their Oct. 28 letter. 

“The proposed reforms, if strengthened as recommended above, would elevate Anaheim as a model for lawful, transparent, and equitable district management—one that both the public and the tourism industry can trust.”

Steven Mattas, an attorney consulting city officials on the issue, said the ordinance complies with state law, addresses the issues raised by the chamber and is consistent with recommendations of state auditors.

Reallocating some of the tax dollars for workforce housing comes after city officials tabled a proposed ballot measure that if approved by voters would institute a 3% admission tax and 10% parking tax on Disneyland and potentially generate up to $164 million annually.

[Read: Anaheim Officials Put Disneyland Gate Tax Proposal on Ice]

Meanwhile, the chamber is suing Visit Anaheim for ending their contract after the scathing state audit.Restructuring Anaheim’s Tourism Improvement District

Restructuring Anaheim’s Tourism Improvement District

Housing in Anaheim, Calif. Credit: FASHION CASTILLO, Voice of OC

Under the changes to the tourism district, 9% of the tourism tax dollars collected could help local workers put a down payment on their first home, rent assistance and help fund building affordable homes for employees.

A five-person committee is expected to decide how that portion of the money will be spent every year and is slated to consist of a representative picked by the city manager, the biggest contributor to the improvement district and three hoteliers – including a small hotel owner.

Officials also made other revisions to the tourism improvement district Tuesday like expanding it to include The Viv Hotel on Anaheim Boulevard and any new hotels built along that road near the 5 freeway and the Ball Road intersection.

New timeshare units built in the area will be subject to the tax as well.

Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.

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