The Disneyland Resort won’t build a 700-room luxury hotel after all. Disneyland notified the city of Anaheim of the project’s cancellation after rejecting tax incentives that would have possibly forced the company to pay a living wage to its employees. There was also a fight over the location of the hotel with city planners.

Disney has been telegraphing this move for months, but now it’s official. Signs of life are returning to Downtown Disney site where the hotel would have been built. The Earl of Sandwich has already reopened at Downtown Disney and plans to reopen more locations are in the works. It will be interesting to see what other businesses reopen while Disney comes up with another plan for the area.

Disneyland spokesperson Lisa Haines shared a statement that said: “We’ve taken the time to review the economics of our proposed four-diamond hotel for Anaheim and have made the final decision to cancel the project. While this is disappointing for many, the conditions and agreements that stimulated this investment in Anaheim no longer exist and we must therefore adjust our long-term investment strategy.”

There are currently three hotels operated by Disney on the property. Disney at one time had an option to build two hotels in the GardenWalk complex, neither of which were built either. With all the hotels in the Anaheim/Garden Grove area, does Disney really need to add 700-luxury rooms? Only Disney’s spreadsheet wizards know the answer to that.

But if they do decide to build another hotel, I hope it’s a themed hotel, not something that looked like the concept art for this luxury vision. Disney’s construction should separate it from the competition through its storytelling in addition to the excellence in guest service.

One thing is clear, the relationship between the city of Anaheim and its largest employer and tax revenue generator is rockier than ever. So far it hasn’t begun to impact the guest experience, but if the city decides to start levying taxes on admission media and get more restrictive with its regulations, there will be a difference that guests can perceive.

Check out this article in the OC Register for more on the impact of this decision to the Anaheim area.