Anaheim will lose out on more than $33 million in net tax revenue due to a doomed lawsuit by a UNITE-HERE Local 11-controlled political pressure group that delayed the opening of the 4-Diamond GardenWalk hotels for 6-8 years beyond their planned 2014 completion date. That is millions in critical revenues unavailable for park improvements, improving police response times, paying down Resort bond debt or other civic purposes, thanks to a fruitless delaying tactic by same union now pushing an initiative to hike the minimum to $18 an hour by 2022 for a select few employers in Anaheim’s resort area. It’s easy to see who they’re targeting, but harder to rationalize their actions which have and will hurt Anaheim.
In early 2013, the city approved the luxury GardenWalk hotels project consisting of a convention hotel (opening under the JW Marriott flag) and a resort hotel. The approval, which required the 866-room project to open in 2014, included an economic assistance agreement under which 70% of Transient Occupancy Tax (TOT) collected at the two properties would be turned back to the hotel owners for either 20 years or until the TOT turn-back totals $158 million – whichever came first.
However, a lawsuit filed by a UNITE-HERE Local 11 front group called OCCORD brought the project to a halt. Although the lawsuit was generally considered a loser, but it succeeded in freezing the project until a judge ruled against the UNITE-HERE/OCCORD lawsuit in late 2015.
Consequently, the JW Marriott convention hotel and resort hotel openings have been delayed until 2020 and 2022, respectively.
That’s a span of 8 years during which the GardenWalk hotels would have been generating millions in TOT, sales and property tax revenues for the City of Anaheim. During that time, the city’s total revenues from the two properties would have been more than $97.8 million in TOT, sales tax and property tax revenues.
After taking the TOT rebates into account, Anaheim will lose out on more than $33 million in tax revenues that otherwise could have gone toward parks, hiring police officers, street repairs and offsetting rising pension obligations.
Another consequence of the UNITE-HERE/OCCORD lawsuit is postponing further into the future the point at which the city captures 100% of TOT from the GardenWalk hotels. Absent the UNITE-HERE/OCCORD lawsuit, the developer would be nearly half-way toward hitting the rebate cap – after which the city TOT revenues from these properties explode. Thanks to UNITE-HERE obstructionism, Anaheim residents will have to wait many more years to benefit from those tax revenues.
Then there are the 3,000 construction jobs that have been delayed, and the 1,300 permanent operations job from which no one has been able to earn an income.
Responsibility for this loss of tax revenue and jobs lies squarely with UNITE-HERE Local 11. OCCORD is controlled by UNITE-HERE Local 11. The militant hotel workers union started OCCORD, funds OCCORD, and provides office space to OCCORD at the union’s headquarters. UNITE-HERE Local 11 boss Ada Briceno, the long-time chairman of OCCORD’s board of directors, did double-duty as the group’s interim executive director in 2015-2016. Corey Briggs, the notorious San Diego attorney who represented OCCORD in the lawsuit, is on retainer with UNITE-HERE.
The GardenWalk convention hotel will be built (it remains to be seen about the resort hotel). The lawsuit delayed, but did not stop the project. Hotel workers will not be represented by UNITE-HERE Local 11. Despite ceaseless platitudes from Local 11 leadership about speaking for “the people” and fighting to improve Anaheim neighborhoods, the reality is UNITE-HERE leaders only succeeded in harming those same people by choking off millions and millions in tax revenue to invest in neighborhoods.
Given the sorry track record of Local 11 leadership in the court room and at the bargaining table, maybe UNITE-HERE Local 11 members should question whether they’re getting a good return on their dues money.