Developer Scraps Plan for Hotel Opposite Disneyland

Disneyland will have one less hotel within eyeshot of its Matterhorn.

Plans for a 400-room Red Lion Inn, which was scheduled to be built across from the Magic Kingdom’s parking lot, have been scrapped by D&D; Development Co., which has placed the property up for sale for $5.8 million.

Developers from the Brea company said financial problems related to the project--not worry over a local hotel glut--led to cancellation of the planned eight-story structure. The hotel was to be built near the corner of Harbor Boulevard and Manchester Avenue.

Meanwhile, D&D;, which has built three other mid-size hotels on Harbor Boulevard near Disneyland, has another hotel project on the drawing boards in Cypress. And Red Lion, which was to have managed--but not owned--the now-canceled hotel, is plowing ahead with construction of a 500-room hotel that it will own and operate near the San Diego Freeway in Costa Mesa.

After recent changes in both its leadership and organization, D&D; has been unable to come up with financing for the proposed hotel near Disneyland, said Bruce Doorman, president of the 11-year-old firm. Doorman said that the company will “entertain all offers” to purchase the prime four-acre site that has sat empty since Disneyland opened 30 years ago.

The acreage was formerly owned by Disney, Doorman said.

Lodging industry experts are in disagreement over the potential for a hotel on the site. Larry Kantor, a senior consultant with Pannell Kerr Forster’s Newport Beach office, said another hotel developer is likely to step in and build there. “There is plenty of room for (hotel) growth in Anaheim. And that happens to be a very strong location.”

But Joel Rothman, general manager of the nearby, 1,043-room Anaheim Marriott, said developers made a “wise” decision in not building. “There’s no way a hotel in that location would have done anything,” he said. “Disneyland can only supplement so many guest rooms.”

Red Lion Inn officials at the company’s headquarters in Vancouver, Wash., say that they were aware of D&D;’s problems in raising capital for the project. Construction, which was scheduled to begin last summer, has been long-delayed.

But Red Lion executives said they were unaware that D&D; no longer intends to build the hotel. “We’ll be very disappointed if the project doesn’t go through,” said Ray Bingham, chief financial officer of the company, which has 52 motels nationwide. “It would be an extremely successful operation.”

Meanwhile, Red Lion has completed 30% of the construction of its company-owned Costa Mesa hotel. The facility is scheduled to open in January, 1987, Bingham said.