A federal transit agency will contribute only $17.5 million toward building a giant $223-million parking garage next to Disneyland because the seven-story structure would mostly serve the amusement park and its proposed expansion, officials said Friday.
Development of the garage has long been considered key to the Walt Disney Co.'s planned $3-billion park expansion, tying into a countywide intermodal transportation center for cars, buses and light-rail trains.
County transportation officials had expected the federal government to pay $131 million of the 12,000-space garage cost, with Disney kicking in about $20 million.
But in a letter sent last month to the Orange County Transportation Authority, federal officials objected that the garage appears to be intended "primarily for Disneyland," and they noted that only 1,000 spaces will be available to public transit users, mostly park-and-riders.
"As we have previously stated," Gordon J. Linton, administrator of the Federal Transit Administration, wrote on June 13, the agency "will not participate in the . . . costs beyond the share that would be used for mass transit."
In addition, federal officials told the local transit agency that if it still wants the $17.5 million in federal funds, it must file a second environmental assessment report that should also address alternative sites for the garage. The garage is to be built on Clementine Street, between Freedman Way and Katella Avenue. Mills said construction is scheduled to begin in three years.
The federal agency's position raises new questions about Disney's Westcot expansion andOCTA's ability to fund the controversial garage project.
Lisa Mills, chief deputy at OCTA, said Friday that she remains optimistic that the local transportation authority will eventually get all the federal money it hoped for and called the proposed parking facility "a model."
"I don't believe that we will only receive $17.5 million," Mills said. Transportation Secretary Federico Pena's "policy for transportation projects is that they provide sustaining revenues."
Mills denied that the facility is intended for Disneyland's benefit.
"The fact is, this will be a public facility owned by OCTA," said Mills. "Anyone can use this facility. Yes, a lot of the parking will be for Disneyland, but anyone can use it. The revenues will come to OCTA."
Mills said the project will not die even if the federal contribution comes up short. If that happens, "we'll just have to look at other funding options." She estimated that the structure will generate up to $9 million in parking fees annually, which will be used for local transportation projects.
U.S. transit authorities also suggested that local officials consider alternative sites for the parking garage. And with the federal government's "limited participation in the project," Linton expressed "significant concerns regarding (OCTA's) ability to finance the facility and expanded bus operations."
Local transit officials have long acknowledged that it would be difficult to complete the project without federal funding. Earlier this year, they approved $32 million in local funds for construction, contingent on the federal funding.
U.S. authorities still have to approve an environmental impact report for the garage and will not release any funding until they sign off on the document.
On Friday, transit administration spokesman Brian Cudahy in Washington confirmed that the federal agency intends to fund only the 1,000 spaces for transit use.
Linton's letter was not the first time that federal authorities had expressed concern about the cost-effectiveness of the garage and its benefit to Disney, according to documents obtained by The Times.
In a Jan. 24 letter to OCTA chief executive officer Stan Oftelie, FTA Regional Administrator Stewart F. Taylor complained that Disney appeared to be getting the better end of the deal.
"The $219-million total construction costs of the (garage), with Disney's contribution at $20 million, on the surface appears to be very disproportionate with the identified transit benefits," Taylor said.
Disney officials declined to comment Friday.
Disney pledged $20 million to the project, but Mills said the local transportation authority has not received any money from the entertainment company.
In the January letter, Taylor said that since federal officials were only willing to pay for 1,000 spaces, the local transportation agency's request for $127 million for construction of the garage amounted to a cost of $127,000 per space.
"(This) is far in excess of FTA's previous investment in parking structures," Taylor said.
FTA spokesman Cudahy added Friday that the agency "will only fund that element of the project that is mass transit in nature, and that totals to $17.5 million. . . . We are not going to fund a parking lot."
He also warned that if federal officials determine that the parking structure is designed solely to accommodate the Disney planned Westcot expansion, "then we're pulling out entirely."
Linton's June 13 letter also said that federal authorities will release the $17.5 million for the garage only after local transportation officials conduct "an examination of alternative sites" and convince the federal transit agency "that the Disney location is the preferred site."
In letters dated Jan. 24 and April 12 to Oftelie, federal transit officials suggested that the Anaheim Metrolink Station be considered as an alternative site.
"This location serves both buses and commuter and intercity rail," said one letter, while the other noted that "with 24 passenger trains a day operating over the Los Angeles/San Diego rail line and stopping at Anaheim, an evaluation of this kind should be considered."
However, Mills said the Metrolink Station is unsuitable for the transportation center.
"The Metrolink site doesn't work as well for us. The location we have near Disneyland works better," Mills said. "We have over 500 buses going through that (Disneyland-Anaheim Convention Center) area on a daily basis that would feed into the center. It is also centrally located for shuttling people between the Fullerton and Anaheim Metrolink stations."