Anaheim Sells More Than $510 Million in New Bonds

Anaheim’s bid to retain its place as a prime tourism center cleared a major hurdle Tuesday as it sold more than $510 million in bonds to expand its Convention Center and finance street improvements for a new Disneyland resort.

The bonds sold at a lower interest rate than city officials and their financial advisors had forecast, meaning construction to refurbish and beautify the city’s 1,100-acre resort area will cost Anaheim $8 million less than predicted.

“People have a lot of faith in the city of Anaheim and also in the Walt Disney company, and that showed,” Anaheim Finance Director Bill Sweeney said from New York, where he supervised the bond offering.

The offering was the second-biggest so far this year. It sold out two hours after the bond market opened.

Under the unusual terms of the bond sale, Walt Disney Co. is guaranteeing a portion of the bonds and will be on the hook to pay off all the debt if its much-anticipated companion park to Disneyland, called Disney’s California Adventure, is not open by July 1, 2002.

Anaheim hopes to have related street, utility and landscaping improvements, as well as the expansion of the Convention Center, done by 2001. The construction project is expected to disrupt traffic in the city and severely affect tourism revenue while underway.