Walt Disney Co (NYSE:DIS) has received a 30-year extension of the Anaheim ‘gate tax’ exemption for its attraction.
The company has been holding meetings to discuss the tax deal in light of the upcoming expiry date of the previous 20-year agreement. The original deal had been struck for a 20-year period where Disney was exempt from paying ‘gate tax’ after the company failed to secure an infinite deal. As a result, Disney was able to offer fairly priced entry tickets to the customers.
The company used the same argument to win the recent extension deal but this time, Disney made an appealing offer to pledge $1 billion if the deal was granted. The 30-year extension was a proved by the Anaheim City Council after a 3-2 vote.
Disney and its supporters argued that extending the gate tax agreement was a good gesture mainly because the company has generated a lot of economic benefits for the city and its inhabitants. Walt Disney Co (NYSE:DIS) currently has the highest employment capacity in the whole city with more than 28,000 local jobs. Many other businesses benefit from the heavy influx of people that come to enjoy the facilities of the company.
Anaheim’s mayor, Tom Tait was not in favor of the extension. He claimed that extending the tax exemption was a risk to the city’s financial performance. He claimed that imposing the gate tax would be an important source of revenue for the council to cater for its increasing financial liabilities. He cited the city’s need to increase the number of police officers and added that the council plans to bring up new buildings as well as renovating some old ones.
Disney plans to use the $1 billion that it pledged to bring up new attractions. It will also use some of the funds to maintain some of the facilities such as the lighting and the roads within its scope of operations. A new parking facility for about 5000 spaces is also in the plan.