Disney’s Glendale Expansion Was a Plan Long in the Works : Entertainment: The 125-acre project is in keeping with company’s aim to cut costs and centralize control, an official says.
In announcing that it will replace the dingy old industrial buildings of its theme park design business with a modern “campus,” Walt Disney Co. has made formal a plan long in the works for a 125-acre site in Glendale, company officials say.
The company, which is in the middle of a major push to cut costs, trim away “non-core” operations and refocus on growth businesses such as the Internet, has not yet committed any funds to building the project. But the disclosure opens the door for nearby property owners and government agencies to begin evaluating and commenting on the proposal.
With land scarce at its Burbank headquarters, Disney has rented space for its Imagineering group, the unit in charge of theme park design, since 1961 near the concrete-channeled Los Angeles River. Realizing it would continue to grow and wanting to control that expansion, it decided to buy the buildings, with the most notable deal the June 1997 purchase of 96 acres from Prudential Insurance Co.
Developing the property into a modern, high-tech complex would continue moves under Disney Chairman Michael Eisner to consolidate far-flung offices into more suitable quarters, where employees can interact more easily--and where Eisner, a noted micromanager, can better monitor his diverse operations.
Examples visible from the Ventura Freeway in Burbank include the feature animation building, with its signature sorcerer’s hat, and the office building going up to house employees of Disney’s ABC subsidiary, which is being consolidated from offices in New York and Century City.
“The campus in Burbank is just about built out,” said Doug Moreland, vice president for development at Walt Disney Imagineering. “This [Glendale project] is ensuring we’ll have an area to expand in the future, whatever we want to do.”
The announcement of the Glendale plan comes as Disney, whose stock price has declined sharply in recent months, is eliminating non-core assets under an Eisner directive to cut costs.
Aiming to boost the share price, Disney announced last month it would sell its Fairchild magazine unit for $650 million, and it is negotiating to sell the Angels and Mighty Ducks sports teams to Orange County high-tech billionaire Henry Nicholas for more than $400 million. Lesser moves include a decision to close its three ESPN stores.
Although a major real estate development would seem to clash with those cuts, it is actually part of a separate plan to control costs and improve the working environment for Disney’s Imagineers, its software developers, other new-media workers and related firms that could relocate nearby, Moreland said.
The project for now is purely in a planning stage, with no significant costs to be cut. Disney has yet to budget a dime for new buildings at the Glendale site, Moreland said; it is merely preparing for the expected 12-month process of hashing out plans before Glendale city officials.
“The earliest any building would be ready would be 2004 or 2005,” Moreland said.
