Disneyland Plans Dim as Project Chief Resigns : Theme park: Prospects that the $3-billion resort will be built seem to falter. Anaheim remains upbeat, though.

The outlook for the proposed Disneyland Resort darkened Monday as the director of the project resigned and Walt Disney Co. offered its gloomiest assessment yet of prospects for the $3-billion center.

The departure of Kerry Hunnewell, who had supervised the massive undertaking centered on a new theme park to be called Westcot, came amid heightened concern over rising costs, protracted negotiations with government officials, continuing uncertainty over the project’s viability and financial pressures stemming from the troubled Euro Disneyland venture in France.

Hunnewell’s boss, Ken Wong, said the Ivy League-educated architect was not fired and that the resignation was “a decision we came to together.” Hunnewell could not be reached for comment.

Anaheim city officials, who were warned of the impending departure, were told that the resignation should not be viewed as a sign that Disney is losing interest in a project considered critically important for California’s beleaguered economy.

“So much progress has been made that I continue to have very good feelings about the future of the project,” Mayor Tom Daly said.

Still, Hunnewell’s resignation comes at a critical time. Disney has been haggling for months with the city and state about who will bear how much of the cost for needed public works and parking facilities. City officials see the project, with its new theme park next to Disneyland and more than 5,000 new hotel rooms, as a chance to rejuvenate an aging commercial district in central Anaheim and generate millions in new tax revenue.

Despite those expectations, Disney officials are offering up somber comments about the likelihood of the project ever being built.

Wong, senior vice president for Disney Development Co. in Burbank, said Monday that the project “has taken longer to get this far than we expected.” The company will not decide whether to proceed until negotiations are complete with the city and state, which will be at least three more months, he said. Then, construction would take a decade or more.

As it stands, though, the project is considered economically unfeasible. “We still don’t have a project that pencils out. We have been pretty honest about that,” Wong said.

The company is trying to find ways to cut costs over the term of the project. Given the cost cutting, he said, “it was really a natural time for (Hunnewell) to move on.”

Although Disney Chairman Michael D. Eisner has described the city of Anaheim as cooperative, he also is warning that the company may nix the project because of its heavy investment in money-losing Euro Disneyland.

“I don’t even know if there’s going to be Westcot,” Eisner said in a recent interview with The Times. “We’re at a real crossroads. . . .

“We had a very big investment in Europe and it’s difficult to deal with. This is an equally big investment. I don’t know whether a private company can ever spend this kind of money.”

No replacement project director will be selected in the next few months, said Wong, who has been personally involved in recent negotiations with the city and state on the project’s funding.

Hunnewell is departing “at a difficult time” with negotiations ongoing, Anaheim City Manager James D. Ruth acknowledged. But he added that Disney has “a lot of people involved who have a good working knowledge of the project” and that he sees no hesitancy on the part of Disney to proceed.

Ruth said he met with Hunnewell last week to talk about his leaving. He said that Hunnewell told him he might work at a smaller firm or as a consultant.

Anaheim City Councilman Irv Pickler said he thought Hunnewell’s leaving might have resulted from “internal turmoil” within Disney, but that “I don’t think it will have any effect on the project.”

City officials praised Hunnewell’s efforts on behalf of the project.

“I thought he did an excellent job,” Pickler said. “I think they are losing a good man.”

Times staff writer Steve Emmons and correspondent Terry Spencer contributed to this report.