Rival on Disney Doorstep: A Resort War in Anaheim
Tree roots have cracked the empty parking lot of Melodyland Christian Center, a nearly windowless concrete complex in Anaheim that once housed a concert hall. Down the street, an elderly homeless woman wanders unsteadily outside the Anaheim Plaza Hotel, where cobwebs hang in the door of the Garden Room.
This unsightly place may someday become part of a sprawling entertainment complex that will rival Disneyland’s massive expansion, the $1.4-billion Disney’s California Adventure.
But because it is across the street from the mighty theme park, the property has become the battleground of one of the fiercest development wars in Anaheim’s history.
Using high-priced lawyers, Disney has filed 219 pages of objections to a developer’s plans to build an eye-catching shopping and entertainment zone called Pointe Anaheim. Disney-funded groups have blanketed Anaheim residents with mailings criticizing the plans. And Disney has sponsored public meetings to air its complaints and advertise the virtues of the competing entertainment mall and hotel it is building across Harbor Boulevard.
“In the 18 years I’ve been here I’ve never seen them [Disney] get so worked up over something,” said Stan Castleton, a co-owner of the nearby Anaheim Hilton and Towers and a member of the group trying to develop the new complex.
The company behind the project--Pointe Anaheim LLC, which includes developers from Southern California and Phoenix--wants to spend $450 million on the entertainment-oriented mall and hotel complex. Plans include three live theaters, a huge FAO Schwarz toy store and two or three hotels.
Before moving ahead, the developers must win city approval over the objections of Disney, which is erecting its own retail center and hotel across Harbor Boulevard. Downtown Disney, as it is called, is scheduled to open along with its second Anaheim theme park, Disney’s California Adventure, in 2001.
Disney Cites City Plan in Voicing Objection
Disney officials say Pointe Anaheim is an assault on the much-touted Resort Area Specific Plan, the city’s blueprint to replace the tacky with the tasteful. Pointe Anaheim looks more like Las Vegas, not the graceful pedestrian district envisioned by the city, Disney contends. The entertainment behemoth also has complained that the competing project would be woefully short on parking, could flood key intersections with traffic at rush hour and has signs that far exceed the 9-foot height limit for the area.
“Disney welcomes development,” said Disney real estate executive Rob Vail. “But we don’t think this is consistent with a pedestrian environment.”
Pointe Anaheim is modeled after Pointe Orlando, an entertainment mall five miles from Walt Disney World in Florida. Having hired several consultants who have worked on Disney’s expansion plans, Pointe Anaheim has blanketed itself in studies to prove it will help, not harm, the highly prized acreage. Were it not for “the Disney factor,” project manager Robert H. Shelton said, Pointe Anaheim would be under construction.
After raging for months, the debate will reach the Anaheim Planning Commission on Wednesday. The city’s staff recommends approval--but only with a list of conditions, including granting Pointe Anaheim’s developers less leeway than requested on how signs are used and eliminating a proposed left-turn lane on Harbor that would funnel traffic straight into the project.
Disney critics note that many features of Pointe Anaheim compete directly with Disney. Most entertainment malls are anchored by movie theaters, but Pointe Anaheim has three stages for live Las Vegas-style concerts and touring Broadway shows--attractions that might steal customers from a live theater in Disney’s California Adventure. (A 24-screen theater is named as an alternate project for Pointe Anaheim.)
The proposed Pointe Anaheim hotels, totaling 1,050 rooms, are a key part of the proposal. The bed tax they would generate would help Anaheim repay $500 million in bonds it issued to fund its part of the redevelopment area. Disney already has 1,638 hotel rooms of its own in Anaheim and is building a luxury hotel, the 750-room Grand Californian, inside the new park.
Pointe Anaheim also would include an extensive nightclub district known as Anaheim Alley, which would compete with a jazz club, a Latin-music club, a possible House of Blues and other venues that Disney hopes will draw tourists and locals alike.
Disney’s real agenda is to “be all of the entertainment in the Anaheim Resort,” said Jim Anderson, director of Anaheim Home Owners Maintaining Their Environment, a group of vocal critics who opposed the Disney expansion.
Anderson said Anaheim officials “could cut [Disney’s] puppet strings to City Hall” by endorsing the entry of another major entertainment complex into the Disneyland-Convention Center area.
The expansion is part of a huge bet by Disney, the city and Orange County’s $5.5-billion-a-year tourism industry. Disney hopes its new park will add more than 6 million annually to Disneyland’s attendance of over 13 million. And while most parkgoers now are day-trippers from California, revenue will soar if, as hoped, Anaheim becomes a “destination resort” for multi-day visits.
Veteran industry observers said that given its well-known name and marketing advantages, Disney simply has no need to fret about a new kid on the block.
“I absolutely do not think it’s about competition,” said Gregory Stoffel, an Irvine retail expert. “In my mind, they’re interested in making the resort area better than it is today.”
Although Pointe Anaheim will have some overlapping options, Disney holds the aces, Stoffel said.
“The types of tenants Disney would go after are different than what Pointe Anaheim is going to go after,” Stoffel added. “Disney’s going to get the cream of the crop anyway.”
Disney, the area’s largest landowner, says it simply wants what’s best for the business community: a project that keeps with guidelines laid out four years ago.
At a recent public forum, Disney executive Vail criticized such Pointe Anaheim features as WonderWorks, an “educational entertainment” attraction designed to look like a building upended by a hurricane. Showing how a proposed 75-foot toy soldier icon dwarfed a family, Vail said the garden district is no place for such overstated monuments, which “could return us to the visual clutter of the ‘60s, ‘70s and ‘80s.”
The city staff’s recommendations greatly limit Pointe Anaheim’s use of icons.
An audience of about 120 people at the Anaheim Marriott seemed generally receptive to arguments by Vail and business leaders allied with Disney. The audience included a sizable entourage from the Anaheim Assistance League charity, which has received numerous contributions from Disney.
One Assistance League worker, 37-year Anaheim resident Joanne Welty, said Pointe Anaheim “reminds me of Coney Island as a kid.”
“I don’t like gaudy,” said Welty, who used to travel to the New York amusement park while growing up in Allentown, Pa.
But Welty said no one had told her that the developers hoped to bring in FAO Schwarz, perhaps the best-known toy store in the world. “That doesn’t bother me in the least,” she said. “I like Schwarz. I bought toys there for years.”
The sign restrictions would make it more difficult for Pointe Anaheim to compete with Downtown Disney, said Shelton, Pointe Anaheim’s point man. He maintained that the Disney entertainment mall was granted exemptions from city regulations regarding signs that Pointe Anaheim is being denied. Deputy City Manager Tom Wood said Disney was granted an exemption from the sign requirements in part because its new project is farther away from the street.
Counterclaims and Lots of Direct Mail
Shelton said Disney, in calculating that Pointe Anaheim will generate too much traffic with too little parking, was working from flawed assumptions. While Disney projected that each visitor would go to just one store, nightclub, theater or restaurant, Shelton said Pointe Anaheim’s studies project that visitors will stop by several sites on a single trip--meaning fewer cars on streets and in parking spaces.
Disney and Disney-backed groups have flooded local residents with mailers opposing the development as currently proposed. Douglas E. Shively, a lifelong Anaheim resident, said he has received seven or eight mailings from a “citizens group” and two from Disney directly. “All of it’s the same,” he said.
While he thinks Pointe Anaheim is “exactly what the city needs in that resort area,” Shively now questions whether it will be built in Anaheim. “I think somebody is paying an awful lot of money to effectively doom it,” he said, “and I think that’s what will ultimately happen.”
Stan Pawlowski, co-chairman of the Preservation of the Anaheim Area Resort Committee, said his group is composed of about 300 residents and business and community leaders who are concerned about the Pointe Anaheim project, including the 300% to 400% increase in traffic they say it will bring to already clogged roads.
So far, Disney has funded the committee’s efforts, Pawlowski said.
Thinking the site would be ideal for a CityWalk-style development, Shelton and partner David Rose teamed up with the outfits that created Pointe Orlando: Western Asset Management Group, a commercial real estate development company, and Excel Legacy Corp., a real estate investment trust that is the primary financial backer.
The property includes eight connected parcels with more than 15 owners. The group reached agreements with all parties and planned to buy the land for a total of $75 million.
Shelton said that over seven months, his group, city experts and Disney met more than a dozen times, often with city workers, to hammer out their differences.
Along the way, Pointe Anaheim deleted a fun zone, a six-story teddy bear outside the toy store, a hotel designed like a steamship on Harbor Boulevard and numerous signs. Additions included more than 1,000 parking spaces and a crossing guard.
Even if the project is endorsed by the Planning Commission, it still must pass the City Council.
And if the process has been frustrating, Shelton said, he’s not sorry that he helped launch it. At least not yet.
“If it takes another five years to get there, then I will say, ‘Yeah, probably, I made a mistake.’ ”
* PARK INSPECTIONS: State regulation of theme-park safety made more likely by Assembly speaker’s support. B1
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Dueling diversions
Here’s a look at the competing retail/entertainment attractions planned in Anaheim. Pointe Anaheim has yet to win city approval, while the Disneyland expansion is under construction.
POINTE ANAHEIM
Developer: Pointe Anaheim LLC
Size: 29 acres
Opening: Late 2001/early 2002
Cost: About $450 million
Hotels: Two or three, totalling 1,050 rooms
Retail: 335,000 square feet, approx. 100 specialty stores, including national chains
Entertainment: Nightclub district, dubbed Anaheim Alley, would include a three-stage live theater complex or a 24-screen movie theater; seven to 12 restaurants.
DISNEYLAND EXPANSION
Developer: Walt Disney Co.
Size: 75 acres
Cost: $1.4 billion
Hotels: 1, Grand Californian, approx 750 rooms.
Retail: 400,000 square feet, in Craftsman-style mall, undisclosed number of specialty stores, but they include World of Disney, La Brea Bakery
Entertainment: Wine garden, “Pan-Latin” nightclub, jazz club, 12- to 14-screen cinema complex; undisclosed number of restaurants.
Source: Companies listed
