According to news stories in the LA Times and the Orange County Register, Disneyland has put on hold its plans to build a new four-star resort hotel in the Downtown Disney area. The 700-room hotel was originally scheduled to open in 2021, though the start of construction has already been delayed from its estimated July 1, 2018, date.

Reportedly at issue is the 20-year 70 percent tax break on the city of Anaheim’s transient occupancy tax. The tax break was originally approved in 2015 by the city to encourage the development of more luxury hotels in Anaheim. The Disneyland Resort project was approved by the City Council in 2016. Since then the Disneyland Resort has moved the location of the hotel about 1,000 feet, which, according to the city, negates the tax break.

A letter from David Ontko, chief counsel for Disneyland Resort, to Anaheim City Attorney Robert Fabela stated: “You have given us no other choice than to put construction of the hotel on indefinite hold as the resort reevaluates the economic viability of future hotel development in Anaheim.”