Anaheim to Proceed With $172-Million Revitalization : Redevelopment: Even though Disney has scaled back plans for a resort, the overhaul is necessary to draw tourism and convention business, officials say.

The decaying area around Disneyland and the Anaheim Convention Center will still receive a major face lift despite the Walt Disney Co.’s decision this week to scale back plans for a $3-billion resort next to its theme park, city officials said.

The overhaul of the city’s infrastructure was said to be vital to Disney’s proposal to build a world-class resort with thousands of new hotel rooms, a 5,000-seat amphitheater and a new theme park dubbed Westcot. The company shelved those plans in favor of a less ambitious project or one that would be built incrementally.

But the city’s revitalization plan--which has a $172-million price tag--is still viewed as being critical for Anaheim to continue drawing tourist and convention center business.

“The plan is absolutely essential to everyone in the area,” said Ned Snavely, general manager of the Anaheim Marriott hotel. “We will have a better looking area no matter what Disney does.”

The city’s so-called Anaheim Resort plan is intended to eliminate urban blight around Disneyland over a five-year period by adding lush landscaping, burying overhead cables, widening streets and removing neon signs.

At the same time, the city is proposing to spend about $60 million to expand and renovate the Anaheim Convention Center, a city-owned facility across the street from Disneyland.

The Anaheim Resort district includes Disneyland, the Anaheim Convention Center and most of the area’s high-rise hotels. The triangular area is bounded by Orangewood Avenue, Walnut Street, Haster Street and the Santa Ana Freeway.

The City Council may be asked as early as Tuesday to approve the hiring of one of the country’s top six accounting firms to study the economic effect of expanding the facility, which is one of the largest of its kind in the nation.

Anaheim Deputy City Manager Tom Wood said that regardless of the kind of project Disney builds, there is broad consensus that the infrastructure overhaul and the Convention Center expansion are needed.

“We have two very successful businesses: the Convention Center and Disneyland,” Wood said. “These things need to be done to support these economic engines. The program is designed to do exactly that.”

Both projects are funded in part by a recent increase in the city’s hotel bed tax, which was raised 2 percentage points--to 15%--by the City Council last fall. The increase, which gives Anaheim the third-highest rate in the nation, goes into effect in July and will bring in an additional $5 million annually.

That money, combined with 1% of the bed tax already dedicated to Convention Center improvements, and an annual $1.6 million from the Convention Center’s budget, will bring the total renovation budget to $9.1 million a year. The city would use the money to finance loans that would pay for revitalization efforts and expansion, officials said.

Anaheim is also expecting to receive about $108.9 million from county, state and federal sources for various transportation and utility projects. City officials have said repeatedly that no general fund money will be used for the projects, nor will taxes or fees be increased.

City officials said Thursday that they do not expect the Orange County bankruptcy to affect their plans because Anaheim has maintained its high bond rating throughout the crisis and borrowed money would not be needed for at least a few years.

Despite the steep hotel bed tax, which has climbed 63% since 1983, the city’s plans have the support of most in the local tourism industry.

“We are desperate to see the refurbishment and the Convention Center expansion go forward and will continue to do everything we can to market tourism in the county,” said Bob Simpson, director of the Anaheim Area Hotel-Motel Assn. He previously served as a city councilman and as city manager.

Elaine Cali, spokeswoman for the Anaheim and Orange County Visitor and Convention Bureau, said: “This is a step forward, and one that the city has to take to remain competitive in the tourism industry. It’s needed now more than ever, especially in light of Disney’s announcement.”

But some impatient motel operators, stung by the bed tax increase, said they are eager to see some results, especially in the wake of Disney’s decision to downsize.

“They haven’t done anything yet,” said Jane Arnold, manager of Desert Palm Suites, which is across from the Convention Center and on the outskirts of Disneyland. “If we have to see an increase in bed tax, then we want to see improvements.”

Another motel operator, who asked not to be identified, said: “I think for guests to have to pay more than 13% is extremely high. The operators have no say in these increases.”

Not everyone is in favor of the revitalization effort. Some groups question whether such a major and expensive overhaul should still take place now that Disney has reduced the magnitude of its project.

“We want things cleaned up, but now that Disney has downsized the project, it should be reconsidered,” said Steve White, vice president of Homeowners Maintaining Their Environment.

“Why are we making that kind of investment for something that’s not going to be done?” White asked. “It’s time for the council to take another look at the project, especially in light of the county’s bankruptcy.”

White’s group, the city of Garden Grove, the Anaheim Union High School District and the Anaheim City School District all have lawsuits pending that seek to block the revitalization plan.

The lawsuits charge that the city’s environmental impact reports do not comply with state guidelines and will overburden schools and street capacity, diminish nearby property values and erode air quality.