Decision Caps a Bad Year for Long Beach

Hopes that the Walt Disney Co. would rescue Long Beach from its deepening economic woes were dashed with Thursday’s announcement that the entertainment giant is abandoning plans for its second Southern California theme park on the city’s waterfront.

The news that Disney has chosen Anaheim for a resort and park was yet another in a series of economic setbacks for the state’s fifth-largest city.

“I think it’s a hell of a blow to this city,” said Councilman Les Robbins. “I don’t know what we could ever do to replace that. . . . I don’t know of any company that has the staying power of Disney.”

Local officials nonetheless tried to make the best of the city’s latest reversal, insisting that all was not lost.

“Disney’s not coming to Long Beach is certainly not the end of the city or the end of prosperity or the end of growth,” said David Hauser, a member of Long Beach’s Harbor Commission.

Mayor Ernie Kell and others took heart in Disney’s statements that it would like to continue discussing the possibility of developing a smaller scale venture on the seaside property it is leasing next to the Queen Mary.

Still, officials agreed that nothing could provide the financial shot in the arm that a $3-billion aquatic park would have given to city coffers and the cash registers of local merchants.

“I’m very disappointed,” said Jerry Simmons, general manager of the Hyatt Regency, the city’s largest hotel. “Our future would really be secure if Disney came. . . . We desperately need a boss in our economy. . . . Boy, Disney would have been a godsend.”

With an estimated 13 million visitors a year streaming to a Long Beach Disney park, the proposed complex would have pumped life into a downtown that has been sickly for decades.

While an aggressive redevelopment effort has given birth to a string of gleaming hotel and office high rises in the city’s center, owners struggle to fill them. Hotels are often 40% empty and the regional glut of commercial space has prevented the office towers from attracting the out-of-town tenants they were built for.

A moribund downtown is by no means Long Beach’s only problem. It has been a year of dreary financial tidings for this seaside city of 423,000.

The recession has eaten into its always meager sales tax income, forcing budget cuts and other tax increases. The Navy announced that in a few years it will shut down the naval station and hospital that have been local fixtures for decades. Buffums, the department store chain that got its start in Long Beach, folded last spring.

Developers of the old Pike Amusement Park site have greatly scaled back their plans for a mixed residential and commercial project across the bay from the ocean liner Queen Mary. Thousands have been laid off at the local McDonnell Douglas aircraft plant that helped put Long Beach on the map.

But Disney’s interest in developing an alternative plan for the Queen Mary site offered city officials something to cling to.

“It’s a 50-acre site on the waterfront. There are a lot of things we could do there,” Disney Development Co. Vice President David Malmuth said after the downtown Los Angeles news conference at which he and other Disney executives explained their decision in favor of Anaheim.

Malmuth and Disney Development President Peter Rummell said they did not know what could be done on the tract. “But we will continue to look for opportunities,” Rummell said. “We’re going to see if there’s something we can do with the city of Long Beach.”

Kell said, “We will work with them to see how we can make it a viable project.”

If Disney turns its back on Long Beach altogether, officials said, they will woo others to develop their valuable waterfront acreage. “That is the only open water left on the Southern California coast to develop,” said Paul Schmidt, a member of the Port Disney Citizen Advisory Committee. “Long Beach is well positioned for growth.”

Kell also cited several other projects as reasons for hope. Construction is due to begin early next year on an expansion of the Convention Center that will triple exhibition space, attracting more business to downtown. He also said he and port officials have begun discussions of establishing a cruise ship terminal that could bring hundreds of thousands of tourists a year to Long Beach. And a large movie theater complex is being built downtown.

“Disney would have just been the icing on the cake,” said Nick Edwards, president of Downtown Long Beach Associates, a downtown business group. “This city absolutely has a strong future.”

Indeed, City Auditor Bob Fronke said it was naive to think of Disney as the city’s economic savior. “Not a dollar of revenue would have come from that project for at least 10 years,” he said. “Look at what happened to the Soviet Union in 10 years, and we’re just a city. Lord only knows what could happen. . . . I don’t think anybody was expecting Disney to bail the city out by any means.”

James Knauff, director of sales for the Ramada Renaissance Hotel, even saw a bright side in Disney’s betrothal to Anaheim. “Had they elected to come to Long Beach, they would have built their own hotels and made every effort to capture the lion’s share of the hotel business with their own product. So I wasn’t staking my future on their coming.”

Over at the Port of Long Beach, the decision also came as something of a relief, although few would say so publicly. While port authorities wanted the city to benefit from the projects, they feared hordes of tourists would tie up the Long Beach Freeway and paralyze operations at the largest tonnage port on the Pacific Coast.

Schmidt said that although Disney would have been a major employer, there was the danger that its size and power would dictate city politics.

“It could have been the gorilla that ate the town,” he said.

Times staff writers Faye Fiore and David Haldane contributed to this story.