Disney Won’t Decide on Resort for a Year at Least : Development: Latest delay on massive Anaheim project first aimed for 1993 start reinforces fears of its demise.
The Walt Disney Co. said Thursday that it will be at least another year, perhaps longer, before it decides whether to commit to build a $3-billion theme park and resort next to Disneyland.
Although never promising to build it, Disney first proposed the resort in 1990 and suggested construction could begin as early as 1993, if substantial public funding supported the project. Since then, government officials at all levels have scrambled to offer hundreds of millions of dollars in freeway and public works improvements.
Though delays have been announced several times before, the latest renewed speculation that what could be one of Southern California’s biggest construction projects--promising 28,000 permanent jobs and millions in tax revenue--is languishing.
“It’s not going to happen this year,” said Doug Moreland, the director of development for the Disneyland Resort project. “We have to see how this all comes together.”
The proposed resort would include more than 5,000 hotel rooms, a large shopping district, an amphitheater and a new internationally themed amusement park, called Westcot.
Jeffrey Logsdon, an entertainment industry analyst for the Seidler Cos. brokerage in Los Angeles, said the Disney project “just doesn’t pencil out financially. . . . I think the park will get built when it’s right for Disney. It’s not there yet.”
State Trade Secretary Julie Meier Wright called word of the delay “a disappointment.” Gov. Pete Wilson has taken a special interest in the project, pledging $50 million in public works to support the resort.
The postponement comes as Disney is grappling with the financial strains of Euro Disney, is waging its own civil war over plans for a historically themed Disney’s America park in suburban Virginia and planning to build a fourth theme park at its Florida resort.
If the Disneyland Resort had stayed on schedule, the opening would have occurred as soon as 1998, according to the city and Disney’s official joint plan for the project.
Now, “the timetable might be more in line with an opening in 2005,” said Ned Snavely, general manager of the Anaheim Marriott hotel and a major supporter of the project.
Until recently, Disney and city officials had said the project might get a go-ahead or rejection from Disney Chairman Michael Eisner as early as September.
But Disney officials Thursday said the entertainment giant will not decide until the funding for all of the public portion of the project--up to $1 billion in public works and other improvements--is in place.
Disney has demanded massive public financing of about a third of the total cost of the project--including two huge parking garages for more than 30,000 cars--as a condition of its participation.
As recently as May 28, a House subcommittee had snatched back some of the $28 million it had allocated for local transportation projects, including the Disney parking garage. The combined cost of the garages is about $450 million, all of it coming from state, federal, county and city agencies.
Stan Oftelie--chief executive of the Orange County Transportation Authority, which is underwriting some of the public works costs--said Thursday that he was sorry to hear of the delay and that the appropriations bill with the garage money is still moving ahead.
Besides the funding issues, a Disney decision is awaiting the completion of a nine-month environmental review of one of the parking structures.
Meanwhile, Anaheim officials--who have pinned much of the city’s economic future on the development of the Disneyland Resort--announced Thursday that they are moving ahead with their $200 million to $300 million in improvements to streets, sewers and other public infrastructure regardless of Disney’s ultimate verdict on the expansion.
Millions more are being spent by the state to build off-ramps on the Santa Ana Freeway in anticipation that Disney will eventually go ahead with the project. Officials explained that with a local freeway-widening project underway, Caltrans simply can’t wait any longer for Disney to make its decision.
Moreland defended the public spending to support the project, saying that many of these improvements need to be made to the aging area anyway.
“When you start a process like this you never know how long it’s going to take,” Moreland said, but “we’re still committed to trying to put a second (theme park) there.”
Anaheim City Manager James D. Ruth said Disney officials told him several weeks ago that they would be postponing a commitment because of the delay in congressional approval for the parking garage. Those funds will probably not be allocated until next year.
“We realize that they hoped to get that money sooner, but we have to live with that,” Ruth said. “This is a high-risk investment for them and they want to make sure they have everything in line beforehand. It would be nice if it could happen quicker.”
Ruth said city officials are unconcerned that Disney seems to be backing away from the project.
“Maybe if the federal government sees that the city is moving forward they’ll realize that we’re not playing games here,” Ruth said of the city’s plans to go ahead with a major renewal of the 550 acres around Disneyland.
Supporters of the project were exasperated at the news.
“Both sides need to come up with a decision. It’s in the ridiculous stage now,” said Ed Arnold, co-chair of a Disneyland Resort support group and a KTLA-TV sportscaster.
But analyst Logsdon said his talks with Disney officials have convinced him that the resort project can’t throw off the 15% to 20% return on investment that Disney expects from a project. At most, he said the new resort could generate 10%, and it could be as low as 5%.
With attendance at Disneyland off about 10% this year, he said, Disney would rather wait.
* ANAHEIM WON’T WAIT: City vows to transform park area into a lush “gateway.” B1
