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It’s a Smaller World, After All : Disney looks ready to downsize its theme park expansion

The Walt Disney Co.'s proposed cutback in its $3-billion expansion of Disneyland might have been worse. The decision could have been not to proceed at all.

In a bow to economic reality, sources say the company now proposes to build only 1,800 hotel rooms in the initial phase of the project, rather than the originally planned 4,600 rooms. The fact that Disney is still moving forward with plans for a new theme park, amphitheater, hotels and other improvements is a hopeful sign. The project, announced so enthusiastically four years ago but sidetracked by the recession, seemed to have been on hold or even headed for the scrapheap.

However, Disney still has not committed to its planned resort, where most visitors would spend several days. The project is important for the construction jobs that would result and the shot in the arm the tourist industry would gain. It is significant for Anaheim because of tax revenues.

Anaheim officials sounded properly cautious in evaluating the cut in the number of hotel rooms. The city counted on the bed tax from 4,600 rooms to help pay for improvements in Disneyland-area public infrastructure, which has frayed around the edges. A far smaller number of rooms would mean far less revenue, and Disney must be ready to accept a scaling down of the public investment it demanded from the city before going forward.

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The company has had a notable summer movie success with “The Lion King,” but the news on the theme park front has been glum. The Euro Disneyland theme park, outside Paris, has lost more than $1 billion, in part because the company built too many hotel rooms, officials said. A proposed $650-million theme park known as Disney’s America has drawn heavy criticism because of its proximity to the Civil War battlefield of Manassas, Va.

If the company finds in the end that it must chose one new project or another, one solution might be to retreat gracefully from Virginia and invest the money in Anaheim, where Disney enjoys the benefits of a long track record and broader support. How about that idea?


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