Tuesday, May 15, 2018

Why does Mayor Tom Tait have a problem with Disney?


First, a clarification. Mayor Tom Tate (spelled Tate) is Mayor of the Gold Coast. Mayor Tom Tait (spelled Tait) is Mayor of Anaheim, California. I met the Anaheim Mayor over a private dinner in California earlier this year, in connection with an invitation to a launch by MIT’s Alan Berger of Infinite Suburbia at an event organized by Chapman University, where co-author Joel Kotkin teaches.

Meeting a US Mayor with (almost) the same name as a Gold Coast Mayor was a curious experience, and it seems they are well aware of each other. “I get his constituent mail,” Mayor Tait told me, referring to his Gold Coast name-sake. It seems the ratepayers of the Gold Coast are Googling the name of their Mayor and, if they get the spelling wrong, they land on the Anaheim Mayor’s Facebook page - where they proceed to complain about rates, roads, rubbish and development on the Gold Coast. “Can you tell him to set them straight?” Mayor Tait asked, good naturedly.

We got to talking about Anaheim and I commented to Mayor Tait that he had some very famous constituents: a Mr & Mrs M Mouse for example. Having Disney as a constituent business would be a gold mine, I presumed, and something any Mayor would give their eye teeth for. Tom Tate on the Gold Coast would be doing cartwheels if Disney announced it was opening a theme park on the Gold Coast – it’s the sort of global attraction prize that writes its own headlines for years to come.

So, imagine my surprise when Mayor Tait explained that all was not well with having Disney as a constituent, and that far from benefitting from the Disney presence, many felt the company was bleeding the ratepayers of much needed community taxes. Accompanied by his Chief of Staff, Mishal Montgomery, they went on to explain over some classic So-Cal Mexican food that Anaheim City had been locked in a running battle with the global entertainment giant.

Contributing to hostilities was it seems a 10,000 + car park built by the City for Disney at a cost of $108.2 million some 20 years ago. Carpark revenues – even at 50% capacity – generate more than $35 million per annum for Disney. Anaheim City – who own the carpark – evidently receive just $1 per annum for the lease. There’s a lot more to it, and the LA Times have extensively covered the issue. See here and here and also here for example.  This and other deals done in favour of Disney are said to amount to billions in forgiven taxes and other concessions – and some claim this has been at the expense of Anaheim City ratepayers who are shouldering the usual infrastructure and amenity burdens faced by city ratepayers and their Mayors the world over. In this case, they say without the financial support of their wealthiest constituent business.

So Tom Tait took on Disney, which in turn responded by spending over USD $1.2 million on “pro Disney” candidates in the 2016 local elections. It didn’t work, and Tom Tait succeeded in becoming Mayor, no doubt much to Disney’s chagrin.

Adding to Anaheim’s concerns is the reality that many residents aren’t wealthy but housing prices are escalating, pushing many residents out. Disney workers love their jobs but it seems they are paid less than many others in similar roles. Another story also by the LA Times (which is hardly likely to be Disney’s favourite newspaper) claimed that: “Workers at the Anaheim resort are paid so little that more than 1 in 10 report being homeless at some point in the last two years, two-thirds say they don't have enough food to eat three meals a day and three-quarters say they can't afford basic expenses every month. As the largest employer in Orange County, Disneyland's low-wage policy hurts the area's economy, even as the local Anaheim government has subsidized the park's expansion and hotel development. The surrounding community is now contending with weak buying power from workers and growing social safety net costs.”

Ouch. The median house price in Anaheim is USD $578,600 (or $770,000 in Aussie dollars) which puts it in the top 6% US wide.

So what’s the relevance for Australia? Or for our own Tom Tate and the many other Australian Mayors who are actively and constantly courting major global attractions to our shores?

For me (and it’s opinion only after all) it was a reminder of being careful who you invite into your tent, and on what terms. If it’s an especially big corporate gorilla, we need to be mindful that they didn’t get to be big through charity. They will negotiate hard and seek to extract every ounce of benefit – as they should for their shareholders. In turn, our own investment attraction efforts need to keep in mind that concessions granted now in order to secure or support major investment by global players can come back to bite us – as Tom Tait (Anaheim) is claiming.

Once inside the tent, they can be hard to control and very hard to kick out.


(PS: Astute readers might recall an article which reported that Australia might be getting its own Disneyland. That article is here.  Take note of the date. April 1st). 

No comments:

Post a Comment