Anaheim Hikes Bed Tax to Aid Disneyland Area : Revitalization: The 2% levy would help fund $172-million face lift. Officials view the project as essential to keep city a magnet for tourists.

ANAHEIM — The City Council gave tentative approval Tuesday to a hotel bed tax increase that will help fund a $172.5-million revitalization project around Disneyland.

The council voted 3-0 to raise the bed tax by 2%, effective July 1, if the council gives it final approval next month.

Anaheim would then have the third-highest hotel bed tax in the nation. Only Columbus, Ohio, and Seattle will exceed Anaheim’s new rate of 15%.

“This is a major first step in the improvement around the Disneyland area,” Mayor Tom Daly said.

Councilman Bob D. Simpson abstained because of business ties with the local hotel and motel industry. Councilman Fred Hunter was absent.

The tax, which has increased 63% since 1983, is expected to raise $5 million a year. All hotels in Anaheim would have to pay it, since they are expected to benefit from the revitalization plan.

Federal, state and regional transportation monies will pay for about two-thirds of the so-called Anaheim resort plan--a beautification program involving 550 acres around Disneyland and the Anaheim Convention Center. City officials say that bed tax revenues, reserve fees and an upcoming reduction in convention center debt payments will generate the remaining one-third of the money.

City officials view the face lift as essential to keep Anaheim a magnet for tourists and convention center business. The program calls for massive landscaping, the burying of overhead cables, widening streets and walkways and other work.

The council also voted Tuesday to prepare a master plan for renovations of the convention center, including cost estimates. City officials tentatively estimate the cost at up to $60 million.

Hotel and convention center officials, concerned that Anaheim is losing tourist and convention center dollars to cities like San Francisco, San Diego and Las Vegas, applauded the council’s decisions Tuesday night.

“We are no longer the crown jewel of California when it comes to convention center business,” said Charles W. Ahlers, president of the Area Visitor and Convention Bureau. “The convention center is in need of help.”

However, city officials warned that if work estimates are higher than $60 million, some funding from the resort area improvements may be redirected to the convention center. The resort area improvements would be still performed, but delayed, said city officials.

The council approved the resort plan on Sept. 20, culminating seven years of planning.

The area contributes $7 million to $10 million annually in net revenue to the city. Officials estimate that those figures would rise by as much as 60% when the refurbishments are done, which could occur by 2010.

“This is an ambitious program. It is not without risks,” Deputy City Manager Tom Wood said in a report to the City Council. “But this is even more true of doing nothing.”

Revitalizing Anaheim Nearly $64 million is still needed for a $172.5-million urban renewal program around Disneyland. Funds still outstanding would go to six programs. Amounts in millions of dollars: Program: Right of way Amount needed: $27.7 *

Program: Landscaping Amount needed: $12.5 *

Program: Storm drains Amount needed: $11.4 *

Program: Transportation (intersections) Amount needed: $6.7 *

Program: Waste water / sewer Amount needed: $4.6 *

Program: Fire / paramedics / police Amount needed: $0.9 Source: Anahem city manager’s office