Who paid for Mickey&Friends

[CaliforniaAdventurer]

Did the city of Anaheim really pay for the cost of construction of the Mickey and Friends Parking garage, as someone stated on this site today?

[CaliforniaAdventurer]

Re: Who paid for Mickey&Friends

Long story short:

The City of Anaheim paid billions upon billions of dollars for the improvements to Harbor Blvd, and the other streets in the resort district, they spent billions on roadway improvements and they even paid to build the Mickey and Friends parking structure. The City spent more money on the resort expansion than Disney did....

Is this accurate?

[MasterGracey]

Re: Who paid for Mickey&Friends

I don't have an answer, but if the City of Anaheim did build it, it was a nice $87.9 million gift to Disney, as apparently Disney owns it.

http://www.mccarthy.com/markets/project_profile_details.asp?Mode=Command&Command=PS&PID=129&sort=01:195&dn=N&dp=Y&dm=Y&dt=Y&ds=Y&cost=87900000

[CaliforniaAdventurer]

Re: Who paid for Mickey&Friends

If they turned it over to Walt Disney Imagineering as the client, as that construction company's site states, wouldn't that mean WDI commissioned it? If it was going from the construction company to Disneyland Resort via the City of Anaheim, would WDI be involved?

[Darkbeer]

Re: Who paid for Mickey&Friends

Basically it was part of the "Bond" money, which means the Hotel guests in the Resort Area payed for it.

3% of the Hotel tax is paying off the Parking Structure and all the surrounding improvements.

[CaliforniaAdventurer]

Re: Who paid for Mickey&Friends

Like a Community Redevelopment Area, I guess?

[chrisaaron]

Re: Who paid for Mickey&Friends

Not trying to be snippy, but it took mere seconds to find the answer:

http://query.nytimes.com/gst/fullpage.html?res=9C01EFDA133BF930A1575AC0A9679C8B63&sec=&spon=&pagewanted=2

The city did pay for it. They did so by issuing $510 million in bonds that will be repaid by the city's 3 percent hike in hotel tax.

[Mac Daddy]

Re: Who paid for Mickey&Friends

Not trying to be snippy, but it took mere seconds to find the answer:

http://query.nytimes.com/gst/fullpage.html?res=9C01EFDA133BF930A1575AC0A9679C8B63&sec=&spon=&pagewanted=2

The city did pay for it. They did so by issuing $510 million in bonds that will be repaid by the city's 3 percent hike in hotel tax.

Not to be technical, but if the CITY were paying for it, wouldn't it be as a tax hike to the RESIDENTS? What I see here is a tax hike on hotel fees which would put the burden on the guests of the hotels, aka out of town guests who are coming to Anaheim to go to....DISNEYLAND. The city seems to be getting it's money back and then some:

The city agreed to issue $510 million in bonds to pay for infrastructure, including some features of the new Disney development. Disney guaranteed the bond repayments with its corporate bond rating, enabling the city to repay the bonds at a lower interest rate than otherwise been possible. To pay off the bonds, the city raised its hotel tax rate from 12 percent to 15 percent.


In all, Disney said, it spent $1.4 billion on both Disney Downtown and the new theme park, which opened in February.

Gone is the pulsating neon of roadside signs. At the city's expense, the city removed the old signs and replaced them with tasteful signs that sit on the ground.Anaheim officials, however, argue that what is good for Disney is ultimately good for Anaheim, because the city expects to get about $3 million annually in increased sales-tax and hotel-tax revenues because of the new developments.

That's NOT counting the repayment of the bonds via the hotel fees, correct?

[chrisaaron]

Re: Who paid for Mickey&Friends

Not to be technical, but if the CITY were paying for it, wouldn't it be as a tax hike to the RESIDENTS? What I see here is a tax hike on hotel fees which would put the burden on the guests of the hotels, aka out of town guests who are coming to Anaheim to go to....DISNEYLAND. The city seems to be getting it's money back and then some

How the city elected to go about actually paying off the bonds is a separate issue. Technically, if the City of Anaheim issued the bonds, they indeed are paying for the Resort improvements since they would be the bond holder.

Also, according to Business Week, not all of the bonds were backed by Disney with a lower interest rate - just "some," meaning Anaheim is largely on the hook if the Disneyland Resort fails to attract the added business that was promised by the Fortune 100 company. Business Week also reported that Disney received $200 million in tax subsidies for the Resort expansion in addition to the $517 million in bonds.


One also needs to take into account the fact that Disney's California Adventure has never met the company's initial attendance figures, and thus "expected" income to the City by way of taxes from 2001 would hardly be accurate.

[PragmaticIdealist]

Re: Who paid for Mickey&Friends

The following is, perhaps, even more interesting:

The complex nature of Downtown Disney, which is a public street built by a private corporation using both public and private money, symbolizes the tightly interwoven relationship between city government and the entertainment behemoth.

If I was a resident of Anaheim, I'd be angry at Disney, too, regarding D.C.A.

[Tom Chaney]

Re: Who paid for Mickey&Friends

How the city elected to go about actually paying off the bonds is a separate issue. Technically, if the City of Anaheim issued the bonds, they indeed are paying for the Resort improvements since they would be the bond holder.

...and where does the City of Anaheim get its money?

[bluejake01]

Re: Who paid for Mickey&Friends

One also needs to take into account the fact that Disney's California Adventure has never met the company's initial attendance figures, and thus "expected" income to the City by way of taxes from 2001 would hardly be accurate.

Regardless of DCA's daily attendance numbers, the resort area is thriving and attendance for DLR in general is up from what it was prior to the improvements. That, coupled with the rate hike more than made up for any monies coughed up by Anaheim. I don't know about you, but the resort area is much nicer to be around for me than it was in the 90's. It was old, rundown, dangerous, congested and ugly. It is still in dire need of improvement, but so far so good.

[sediment]

Re: Who paid for Mickey&Friends

More accurate questions, since there appears to be an ambiguity:

1. Who fronted the money?
City of Anaheim.
2. Who's paying City of Anaheim back?
Tourists (mostly) using hotels, who in general won't be using the M&F parking structure.

[bluejake01]

Re: Who paid for Mickey&Friends

More accurate questions, since there appears to be an ambiguity:

1. Who fronted the money?
City of Anaheim.
2. Who's paying City of Anaheim back?
Tourists (mostly) using hotels, who in general won't be using the M&F parking structure.

How about asking who gets the benefit?

Reduced congestion, easy on and off the freeway, an improved, upscale resort district that helps fund civic projects. Sounds like locals see quite a bit of benefit.

[CaliforniaAdventurer]

Re: Who paid for Mickey&Friends

More accurate questions, since there appears to be an ambiguity:

1. Who fronted the money?
City of Anaheim.
2. Who's paying City of Anaheim back?
Tourists (mostly) using hotels, who in general won't be using the M&F parking structure.

Good points.

[sediment]

Re: Who paid for Mickey&Friends

How about asking who gets the benefit?

Reduced congestion, easy on and off the freeway, an improved, upscale resort district that helps fund civic projects. Sounds like locals see quite a bit of benefit.

So, it seems that the City of Anaheim is doing its job, using its authority to borrow money (issuing bonds) to front funds to lend to projects that provide city benefits.
And, it seems I actually got it wrong: City of Anaheim didn't put up a single dime, save the cost of issuing bonds. And depending on the generated revenue, it probably won't be on the hook for any bond payments due to shortfall.

So, bond buyers paid for initial layout, revenue from hotel tax pays the bond payments, and any excess goes toward principal. Depends heavily on the type of bond. Being a revenue-based bond, it likely has some sinking fund provision or callability provisions if revenues exceed payments.
Not that I know anything about municipal bonds, though.

[sediment]

Re: Who paid for Mickey&Friends

How the city elected to go about actually paying off the bonds is a separate issue. Technically, if the City of Anaheim issued the bonds, they indeed are paying for the Resort improvements since they would be the bond holder.

No. Completely incorrect. City of Anaheim issued the bonds, so it is the bond issuer. Investors who buy bonds are bond holders.
As I wrote above, City of Anaheim didn't put up any money. It did put up its credit rating and Disney's appeal to travelers as collateral. City of Anaheim is merely collecting taxes on one hand and making bond payments with the other.

And in this NYT article, it states that Disney used its credit rating to lower the interest rate on the bond issue:

http://query.nytimes.com/gst/fullpage.html?res=9C01EFDA133BF930A1575AC0A9679C8B63&sec=&spon=&pagewanted=1

And Disney guaranteed the payments.

Using City of Anaheim as the bond issuer lowers the bond interest rate, as it can be issued as a tax-free issue. Some investors prefer that type of bond.

[CaliforniaAdventurer]

Re: Who paid for Mickey&Friends

Agent Bond. Sediment Bond.

[sediment]

Re: Who paid for Mickey&Friends

Shaken, not stirred.

[cakvalasc]

Re: Who paid for Mickey&Friends

Its a win situation for everyone really... Minus the tourist. :x