Santa Ana says yes to incentives for luxury hotels

SANTA ANA – Santa Ana is putting out the welcome mat for luxury hotels.

Seven months after considering an incentive program for four- and five-star hotel developers to build in the city, City Council members have taken the step forward.

The resolution establishing the hotel development incentive program was adopted unanimously on Tuesday with new provisions for workers that labor organizations lauded.

“It’s been about six months that we worked on it, but the good thing is there was a good environment for everyone to talk about what their concerns were, what their priorities were,” Mayor Pro Tem Vincent Sarmiento said.

Santa Ana has zero four- and five-star hotels, allowing business from a growing number of Orange County tourists to escape to neighboring cities, such as Costa Mesa, that have luxury resorts.

The incentive program closes the funding gap that developers face when the cost to construct a hotel doesn’t yield a return.

It allows Santa Ana to offer a high-rated hotel developer 50 percent of the new incremental hotel visitors’ tax the property generates, for up to 15 years. Santa Ana currently imposes an 11 percent hotel visitors’ tax on hotel and motel guests, which is projected to yield $9 million by the end of fiscal year 2015-16.

Since the initial proposal, Santa Ana has made an effort to reach out to workers and unions in crafting its incentive program.

In March and April, city staff met with members of Unite Here Local 11, which represents more than 20,000 hotel, restaurant, airport, convention centers and sports arena workers throughout Southern California, to discuss labor peace agreements. City staff also met with the Los Angeles/Orange Counties Building and Construction Trades Council and gathered feedback on wage requirements and hiring local residents.

As a result, the incentive program now requires labor peace agreements, wage standards and local hiring.

Ada Briceño, secretary-treasurer for Unite Here Local 11, said her union is pleased the city is taking steps to encourage luxury hotel development and that the resolution addresses “all” of their concerns.

“It will provide pathways for jobs, both in the construction phase and operation,” she said. “Santa Ana has provided a model and we’ll make rules to take it to other cities.”

Mayor Miguel Pulido said he is glad the city has moved forward with the incentive and apologized for the delay.

“I’m just sorry we didn’t do it sooner,” Pulido said. “I know you all wanted it months ago.”

Contact the writer: 714-796-7762 or or on Twitter: @JessicaGKwong

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