‘The Anaheim Problem’ Has a Happy Ending
As exhausted Anaheim and Walt Disney Co. negotiators pushed away from a long, wooden table one day in late October 1994, the documents before them seemed headed for the shredder along with dreams of a bigger, revitalized Disneyland.
After hours of wrangling in a seventh-floor room at City Hall, a $3-billion project known as Westcot looked dead, with the city fearful it could lose money and Disney nervous it wouldn’t make enough.
Now what would Disney do to invigorate the granddaddy of theme parks? How would Southern California tourism get a needed boost after riots, floods, fires and the inexorable competition of new, more exciting destinations?
Too much was at stake for the city or Disney to walk away from each other for good. They couldn’t afford to build Westcot, but they couldn’t afford to let erode a cultural icon that defined Disney and Anaheim.
Clearly, this was worth one more shot. And, in the summer of 1995, they gave it one.
Disney Chairman Michael Eisner summoned his best and brightest to a three-day retreat in Aspen, Colo., to confront what top company executives were calling “The Anaheim Problem.”
At the end of the brainstorming summit, teams of Disney’s creative specialists pitched a series of fanciful theme park concepts to Eisner, who wore a baseball cap and whose dog sat quietly at his feet.
After passing on themes centered on sports, the oceans and even Route 66, an idea that highlighted the unique natural and pop cultural assets of the Golden State caught Eisner’s attention.
“California is it,” Eisner reportedly said after the California Adventure theme had been presented. “That’s the big idea.”
On Wednesday, Disney finally announced plans for the $1.4-billion “big idea”--a second theme park next to Disneyland to open in 2001. But even as people celebrated Disney’s California Adventure, those who were around when Westcot was first proposed had a nostalgic feeling for a project that although never was, made everything possible.
Monumental regulatory hurdles cleared under the Westcot proposal will apply to the new project, saving the city and Disney untold time, money and grief.
“Westcot paved the way,” said Deputy City Manager Tom Wood, who headed the city’s negotiations with Disney. “We wouldn’t be here without it.”
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Six years ago, in classic Disney fashion, the entertainment giant announced it was going to build a new theme park in Southern California. The only problem, the company said, was it didn’t know whether to put it next to Disneyland or in Long Beach, on the waterfront next to the Queen Mary, which it owned at the time. And, there was only enough money to build one.
Disney’s calculated indecision set up a high-stakes competition between the two cities, each trying to woo the company with financial enticements.
In the spring of 1991, the company unveiled its visions for each city. Long Beach was to be a grand ocean-themed amusement park. Anaheim’s was to have a World’s Fair and futuristic influence, based on concepts developed for the company’s Epcot Center attraction in Florida. Both proposals included luxury hotels, fine restaurants and lushly landscaped shopping districts.
After environmental squabbles arose over the Long Beach project, Anaheim was dubbed the winner on Dec. 12, 1991--nearly two years after the competition began.
Having chosen a city, Disney went about pitching its virtues. It proclaimed that the project would overhaul Anaheim’s decaying neighborhoods, bring in 28,000 jobs, boost Southern California’s sagging tourism industry and generate tens of millions of dollars of new tax revenue every year.
For a state in the throes of a nasty recession, Disney’s plans couldn’t have come at a better time.
But there was bad news as well.
The project had a $3-billion price tag--$1 billion to be paid by public agencies for massive improvements to the city’s sewers, streets and utilities. Furthermore, city residents complained about traffic congestion, pollution and noise they predicted the project would bring to their neighborhoods.
An intensive public relations campaign was launched by Disney and the city to sell everyone on the benefits of the proposal. There were pep rallies, community meetings and glossy promotional mailers sent to residents and business owners.
Despite pockets of resistance from some homeowners, by the summer of 1993 most people had embraced the project.
The governor offered $60 million in transportation money, and federal authorities approved about $17.5 million for similar purposes. The county’s transportation agency agreed to chip in an additional $36 million for a parking garage and the city intended to commit many millions more.
It seemed like Disney was getting everything it wanted.
Anaheim officials, so swept up in the spirit of revitalizing their city, announced a separate, $174-million project to give the area around Disneyland a long-needed face-lift. Garish motels and tacky pancake houses were to be bulldozed. Landscaping, sign improvements and underground utility lines would bring some dignity back to the area.
All that remained to realize this grand vision was the completion of a development agreement between the city and Disney to tie up all the loose ends and formalize who was paying for what. By the summer of 1993, city officials expected Disney to make a groundbreaking announcement within weeks.
But weeks turned into months. And months into a year.
Disney was dragging its feet. Big time.
An uneasy tension started to grow between Disney and city negotiators.
By August 1994, it was clear there were major problems. Disney talked consistently about “uncertain economics” surrounding the project; it was Disneyspeak meaning the profit margin was too low. According to industry economists, Disney won’t build so much as a bathroom unless there is at least a 20% profit margin.
To increase profits and minimize investment in Anaheim, Disney officials surprised city officials and announced that August that they were slashing by more than half the 4,600 hotel rooms they had originally planned to build.
Since the city planned to recoup its investment in Westcot with a hotel room tax on visitors, Disney’s announcement was a severe blow. Behind the scenes, city officials knew the deal was unraveling.
City folks privately started muttering derisive comments about how Disney negotiators were “sharks” who “eat their own young.”
A flurry of meetings were held to try to save the project. But a meeting in late October made it clear to everyone that nothing could be done.
“It got to the point where the city couldn’t do anymore,” recalled Anaheim City Manager James D. Ruth. “It was a tense meeting.”
The city wanted from Disney a written guarantee that it wouldn’t lose money on the project; Disney wanted more promises from the city to upgrade streets and sewer lines.
Neither would budge.
“We felt like we were trying to squeeze water from a stone,” said Kenneth P. Wong, Disney’s head negotiator on the project.
In the end, Wong, Ruth and their negotiating teams knew the Westcot project, as it was originally proposed, was dead.
“It was a real downer,” Wong said. “We knew we had to go back to the drawing board.”
Although, money was the key issue, some Disney executives also acknowledge there were other reasons for scrapping Westcot. The idea of replicating a project already built in Florida had little creative appeal for Disney’s “Imagineers,” as its creative team is called.
“I prefer not to spend six to seven years of my life on something that’s already been done,” said Martin Sklar, vice chairman of Walt Disney Imagineering and one of the creators of Epcot.
Some also believed that the Westcot plan was conceptually cumbersome. An attraction based on an array of pavilions offering glimpses of technologies of the future didn’t have broad-based appeal.
“Taking technology and looking at the future is a lot of fun, but the future is a moving target,” Sklar said. “People want to see technology that will affect their lives, and if you try to go way out, people say they’re not going to live to see that.”
So, with their concerns over the Westcot concept and the profit margins, Disney officials retreated to their headquarters in Burbank to plan for another day.
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That day came late last summer when Disney strategists and numbers crunchers decided a Disneyland addition was “worth one more look,” as one executive said. And Eisner made searching for a new theme park concept the mission of his annual retreat to Aspen.
About 50 of the company’s brightest employees from various departments were invited to the resort town in the Rocky Mountains. The session got underway one August evening with what has become a Disney tradition--Judson Green, president of Walt Disney attractions, pounding away at a piano while other executives sang along to television theme songs.
By the next morning, however, it was down to business. The group was divided into about five teams, each with a roster of sketch artists, “Imagineers” and park executives. After spending half a day picking over the bones of previous park concepts that had been abandoned, the teams were ordered to start from scratch.
Two days later, the group assembled for a buffet lunch of salads and other low-calorie dishes that have become standard Disney fare since Eisner’s heart surgery in 1994. Afterward, the teams presented their ideas to the chief executive, whose commanding presence was softened somewhat by his casual attire.
One group pitched a Route 66 concept, a trip through America as a pop cultural odyssey. Other proposals included concepts based on the history and technology of sports, the ecological wonders of the natural world, and the majesty of the oceans.
Then came a group that included Paul Pressler, president of Disneyland, and Barry Braverman, executive producer of Walt Disney Imagineering. The team suggested a new park based on the cultural and natural mystique of California. Braverman made the pitch and Eisner perked up.
“People come [to California] seeking something that is more and more elusive,” Braverman recalls Eisner saying. “If we can distill it, we have an idea.”
Others were also quick to embrace the idea.
“You come to California today and you can’t find it,” said Sklar, who joined the company 41 years ago as a Disneyland summer employee when the park opened. “You know what Hollywood Boulevard is like now, and you can’t get into most of the studios. The whole Walt Disney story of coming out from Kansas City as a 21-year-old, that’s a real California success story. All of these things add up to something larger in people’s minds than what actually exists here.”
The next question was who would be in charge of fleshing out the California Adventure idea. That was certainly on the mind of Braverman, who after making his successful pitch, took a stroll along Aspen’s main street. He looked ahead and saw Pressler, Sklar and Wong, walking side by side.
“I said, ‘I bet that they’re talking about who’s going to be on this thing,’ ” Braverman recalled. Three days later, when the team was back to work at Disney’s offices, Braverman was handed the job.
He quickly assembled a team of “Imagineers” and spent much of the next year putting together the pieces of the plan that was presented to the public Wednesday. Disney’s California Adventure includes components based on the natural beauty of Yosemite Valley, the allure of California’s beaches and the storied history of Hollywood.
Braverman’s team had periodic meetings with Eisner, who had to sign off on everything and frequently injected himself into the creative process. Eisner pushed to have a concept called “A Soldier’s Story”--a leftover from Disney’s aborted plan to build a historic theme park in Virginia--included in California Adventure, Sklar said.
The concept was to create a film or theater show tracing the contributions and heroism of the nation’s soldiers through history. “We finally convinced him that it wasn’t a California story,” Sklar said. So Eisner said he wanted Lloyd Fonville, a freelance writer who had created “A Soldier’s Story,” to have a role in the project.
As a result, Fonville was brought in to write the script for a film or theater show that will tell the stories of California’s early settlers and immigrants. The concept goes by the working name “Hands,” Sklar said, because it is meant to honor “the people who got their hands dirty building this state.”
With the new concept in place, Disney officials in December called City Hall.
“They said, ‘We have something we want you to look at,’ ” recalled Wood, the deputy city manager.
And look they did. But it was not at the concept. It was at “the bottom line,” Wood said. “We think this will work.”
Since December, the city and Disney have been at the negotiating table working on a development agreement that will lead to an anticipated groundbreaking by next year.
“It’s been a lot of hard work by a lot of great people,” said a relieved Ruth. “This is the economic engine for the future.”
But even as Ruth and Disney’s top executives celebrated the moment Wednesday. Wood and a high-level Disney negotiator huddled privately in a corner to haggle over some unspecified issue related to the project.
“It never stops,” Wood said.
Also contributing to this report was Times staff writer Greg Hernandez.
