Anaheim Commits to Big Disney Expansion

The historic partnership between the Walt Disney Co. and Anaheim, begun when Disneyland opened 41 years ago, was again sealed Tuesday with the City Council’s vote to spend millions of dollars to make possible a new $1.4-billion Disney theme park.

The council’s final 5-0 vote commits the city to paying up to $546 million in public funds for improvements related to the Disney project and to a major expansion of the Anaheim Convention Center across the street. It follows months of intense negotiations and culminates more than six years of twists and turns, which began when Disney announced that it was considering building a second theme park in Anaheim.

Mayor Tom Daly called the vote a “big step into the future. I can’t wait for the project to begin so we can enjoy the benefits as soon as possible.”

Paul Pressler, president of Disneyland Resort, expressed both excitement and relief that the company has all of the clearances it needs to begin construction either late this year or in early 1997.

“Anaheim Boulevard and Main Street U.S.A. are linked to each other,” Pressler said.

The planned Disney development supersedes the splashy $3-billion resort the company proposed for the same site in 1991 but abandoned last year as too ambitious. This summer, the company unveiled its plan for a smaller attraction. It includes a new 55-acre theme park called Disney’s California Adventure, a 750-room luxury hotel and a 200,000-square-foot shopping, dining and entertainment complex called Disneyland Center.

In all, $450 million of city money will be invested in improvements to the city’s tourism area. This includes street improvements, landscaping, utilities and a $90-million parking garage to be used mostly by visitors to the new theme park and, on a limited basis, by convention center visitors. The other $96 million will come from existing state, federal and regional transportation funds.

The city plans to issue $395 million in bonds to finance much of the work. Increased revenue from hotel and sales taxes from tourists and property tax revenue generated within the Disneyland Resort area is expected to pay off the bonds. In case of a shortfall in revenue, Disney has guaranteed the bond debt, agreeing to step in and pay investors if the city can’t.

Anaheim officials insist that the project will not be a burden on city taxpayers and in the end will strengthen the city economically.

Anaheim’s tourism area now contributes nearly $11 million a year in tax revenue to city programs. The expansion, coupled with other projects, could boost that by $6.1 million a year, according to a report released by the city last month.

For image-conscious Disney, gaining the council’s unanimous approval for the expansion was considered crucial.

City and Disney officials were criticized last spring when the city agreed to pay 30% of a $100-million renovation of Anaheim Stadium as a condition of Disney’s purchasing controlling interest in the California Angels baseball team. The critics said Anaheim was not guaranteed a way of recouping its investment. The agreement bitterly divided the City Council and was narrowly approved 3 to 2.

Although Councilmen Bob Zemel and Tom Tait voted against the baseball deal, both sided with their colleagues Tuesday in an unusual display of solidarity.

“I believe this deal is better than the last one,” Zemel said. “This time, there is a revenue stream for the city, and it is a true partnership. This transaction is good for Anaheim taxpayers.”

The plan always appeared to have the blessing of at least a majority of the council and received minimal public opposition. Hundreds of Disney faithful have attended rallies and filled public meetings to show support.

Tuesday was no different as more than 30 pro-Disney speakers lined up to extol the positive aspects of the deal.

Most of them were members of Westcot 2000, a group formed in the early 1990s to support the Disney expansion. Stan Pawlowski, co-chairman of the group, said Disney and Anaheim are “like love and marriage and a horse and carriage. After 41 years, you can’t have one without the other.”

Former Anaheim Mayor Jack C. Dutton, 86, was among those who urged approval.

“I’ve walked in the shoes of each of you up there,” he told the council. “It’s really time to quit talking and start pouring concrete and hammering nails.”

But not everyone was pleased.

A group of parents from the Anaheim City School District said they were concerned with the impact that new jobs from the development will have on schools.

“We want the city to remember that as they sign this agreement with Disney, it’s going to impact our school district,” said Maureen Christensen. “They’re going to send more children to our schools when they bring in more jobs and affordable housing.”

Still, Tuesday’s smooth passage dramatically differed from the boisterous hearings for the original, $3-billion project, which residents, school districts and a neighboring city filed lawsuits to stop.

Although Disney and city officials were celebrating Tuesday, a statewide anti-tax initiative on the November ballot threatens their carefully crafted plan.

The initiative, sponsored by the Howard Jarvis Taxpayers Assn., would require approval by voters, retroactively, of all new taxes and tax increases implemented after January 1995. This would include the 2% increase in the hotel bed tax passed last year for the Anaheim Convention Center expansion and tourism area improvements.

The city has placed a measure of its own on the November ballot, asking voters to retroactively ratify the bed tax increase.

Times correspondent Bonnie Hayes contributed to this report.