Garden Grove Riverwalk Plan Dries Up

By LESLIE EARNEST and CHRIS CEBALLOS

Jan. 5, 2000 12 AM PT

SPECIAL TO THE TIMES

A planned music-themed entertainment complex that was supposed to help transform Garden Grove into a tourist magnet has been shelved because the developer could not line up tenants or funding for the $400-million project, the city said Tuesday.

The apparent demise of Music City Riverwalk might signal that parts of the county are “over-retailed,” said Matthew Fertal, Garden Grove’s community development director. The proposed 53-acre project was one of several entertainment and shopping centers expected to sprout in the heart of Orange County.

“I think there was financing available for the project, contingent on them being able to secure a sufficient amount of tenants,” Fertal said. “They weren’t able to do that.”

The city had twice extended its deadline for the developer to present a financing and tenant package, but when the developer asked for a third extension, the city refused.

“This developer has had this project for 3 1/2 years and it hasn’t come to fruition,” Garden Grove Mayor Bruce Broadwater said. “It’s pretty much over with. But it’s not the end of the world.”

Riverwalk’s collapse is a blow to the city, which had hoped the project would attract up to 10 million tourists and bring in as much as $3 million in taxes annually. But it was not a surprise.

City officials had sensed it would be tough to bring the project to fruition after Disney announced plans for Downtown Disney, a shopping and entertainment center that will link Disneyland and the new California Adventure theme park; Pointe Anaheim proposed a shopping and entertainment center across the street from Disneyland, and the Block at Orange opened in November 1998, Fertal said. The Block already is planning a significant expansion.

“They started becoming what Riverwalk was intended to be for this area--the restaurant, entertainment and theater experience for the tourists to visit,” he said. “We began to see a squeeze for the same tenants.”

Architectural Firm Holds Out Hope

The developer, OHI Inc. could not be reached for comment on Tuesday. But the Leo A. Daly architectural firm, which has been working on Riverwalk, said it still hopes the project will survive.

“I’m not sure how it’s going to turn out,” said Ken Rogerson, a vice president at the firm. “It could very well still happen, but maybe in a different form.”

And Fertal said the city has not completely slammed the door on Riverwalk. “We would have to see what they can produce to keep the project alive,” he said.

Riverwalk would have featured an artificial 30-foot-wide river lined with restaurants, themed entertainment venues and specialty shops. The project also called for a 20-screen movie theater, a 500-room hotel and other attractions.

About $60 million was needed to buy out the homes and businesses that would have had to be razed to build Riverwalk along Harbor Boulevard, between Chapman Avenue and Garden Grove Boulevard.

Former Garden Grove City Councilman Robert F. Dinsen was opposed to the Riverwalk project from the start.

“I didn’t think it would do what they anticipated,” Dinsen said. “It just doesn’t stand to reason that a $400-million project--mostly a spinoff to Disneyland--would generate enough income to make a return on that kind of investment.”

“I mean, what did they have?” he asked. “A circular canal with different kinds of music around it where people would stroll and buy things that they couldn’t find anywhere else. Where are they going to get [retailers] to offer something that nobody else can?”

Other major projects being planned for the area include the Sportstown Entertainment Complex in Anaheim next to Edison International Field. The centerpiece of that project would be the four-story Gotcha Glacier, an indoor snowboarding and surfing complex.

The bulk of the private financing for Glacier project has not yet been finalized, nor have tenants been announced. But Brad Kinney, chief executive of Glacier of Anaheim LLC, said Tuesday that financing “is well on the way” and 86% of the tenants for the project’s first phase have signed leases or letters of intent. He declined to name any of the tenants. Construction should begin by March, he said.

Pointe Anaheim Gets Ducks in a Row

Pointe Anaheim does not yet have its financing in place, nor has it announced its tenants, said Jason Grange, a spokesman for that project. But Pointe Anaheim hopes to have its financing lined up by the end of summer, he said.

Some retail experts and city officials Tuesday continued to express optimism about the Glacier and Pointe Anaheim.

Anaheim Deputy City Manager Tom Wood said the demise of the Riverwalk project does not bode ill for other large entertainment and retail projects pending in Anaheim, including Point Anaheim and Gotcha Glacier.

“It’s the old mantra, ‘Location, location, location.’ The closer you are [to Disneyland] the better chance you have of success,” Wood said. “So I think they’re different situations.”

Wood said he could not comment specifically on the status of Pointe Anaheim, but said the developer was actively pursuing clients as of the week before Christmas.

While Riverwalk was a major project for Garden Grove, city officials stress it can be replaced with another successful undertaking. The city still expects the former Riverwalk parcel will be redeveloped and that the homes, hotels and businesses along that strip will be replaced, Fertal said.

“I think, ultimately, that’s not the highest and best use for that property,” he said.

Council members recall the E-Street movie theater project planned for Harbor Boulevard and Chapman Avenue, which fell through in 1997. Six hotels are now built or being developed at that intersection and are expected to yield as much as $8 million in taxes annually for Garden Grove. And the city is currently talking to developers about the possibility of building two or three more hotels in that area, Fertal said. The development is being driven by the Disney expansion.

“Harbor Boulevard is the southern gate to Disneyland, even if they don’t want to admit that,” Broadwater said. “But it’s definitely the place to be. A lot is happening along that avenue and a lot will happen along that avenue.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Riverwalk Takes Hike

While Music City Riverwalk has been shelved, other retail and entertainment projects are still proposed for the heart of Orange County. Downtown Disney, which will link Disneyland to the new California Adventure theme park, is now under construction. The developers of Pointe Anaheim and Gotcha Glacier say their projects are still moving forward.

DOWNTOWN DISNEY

Location: West Street, Anaheim, on the Disneyland grounds

Square feet: 300,000

Est. cost: Undisclosed

Developer: Walt Disney Imagineering

Tenants: House of Blues, AMC Theatres 12-screen plus other retail and entertainment tenants

Opens: 2001

SPORTSTOWN

Location: Southeast corner, Katella Avenue and State College Boulevard, Anaheim

Square feet: Approx. 620,000

Est. cost: About $140 million

Developer: City of Angels and Glacier of Anaheim LLC