Disney Plans Third Park in Anaheim

The Walt Disney Co., aiming to create the premier family resort in the West, disclosed plans Friday to build a third theme park complex in Anaheim as part of its massive Disneyland expansion.

Company officials said the new complex could include a water park and an amusement park that would have versions of popular rides from Disney venues in Paris, Tokyo and Florida. A theme for the new park and other details are still being formulated, but parts of the new attraction could open as early as 2003.

Disney’s latest plans come as its second Anaheim park, California Adventure, prepares to open in February, shortly after the debut of the Downtown Disney retail and entertainment area and a luxury hotel, all adjacent to Disneyland.

A third park next to the 45-year-old Disneyland could rival in cost the $1.4 billion that Disney is spending for California Adventure. It also reflects the company’s continued focus on theme parks. Including California Adventure and a new attraction being planned for Hong Kong, this would be Disney’s 11th major theme park.

Theme parks have been hugely profitable for Disney, which last year made 42% of its operating profit from its park division, even though it accounts for just 26% of company sales.

Aiming for Longer Stays by Tourists

In Anaheim, Disney has long wanted to create an urban resort--a vacation destination that could draw the multiple-day stays that Florida’s Disney World does--and better compete against the multitude of attractions in Southern California, from Hollywood to Sea World in San Diego.

Although the Burbank entertainment colossus is not formally committing to build the third park, the efforts outlined Friday represent a significant step forward. It already has purchased the 52.5-acre Fujishige family strawberry field and has long said it would probably be the site of a third theme park.

Thomas Staggs, Disney’s chief financial officer, said the formal decision to build the park will depend on whether the economics of the project make sense for the company’s shareholders. Analysts generally reacted favorably to Disney’s announcement. But its stock fell $1.19 Friday, to $37.44 a share.

Disney said Friday that it was beginning an environmental review process with the city that could take nine months if all goes smoothly, as Disney expects. And it created a Web site, https://www.thirdthemepark.com, to explain its vision.

Together with land it already is using as a staff parking lot, Disney will have a 78-acre site for the new project, just south of its existing complex on Harbor Boulevard.

Disney’s latest plans, economists say, could help spur economic growth for the area, revive other Anaheim attractions and give competitors a shot at luring more vacationers to their parks.

“This only strengthens California as a major tourist destination. As more activity is completed in Southern California, we can collectively gain a larger share of the U.S. family tourism market,” said Bill Haviluk, who heads the international theme park operations of Lego Co.

Disney’s pull is so great that even competitors say they benefit more from the new visitors pulled into the area than they suffer from loss of patrons to Disney.

“As Disney keeps on building and building in Southern California, that only helps Knott’s Berry Farm,” said Richard Kinzel, chief executive of Cedar Fair LP, parent company of the Buena Park operation. “All we need to do is get a day out of all the people Disney is bringing to the area and we will be very pleased.”

Looking to Florida Parks as an Example

Disney’s model for its entire resort is Disney World in central Florida, where it has four theme parks, three water parks and 20,000 hotel rooms. But in Anaheim, the company faces not only stiffer competition, but also limits on space.

Disney’s goal is to entice visitors to spend days on end at its hotels, eating at its restaurants and shopping in its retail zones. But if it is to increase stays from the current average of 1.5 days to the nearly five-day stay typical in Florida, it must add attractions, officials said at a briefing with The Times.

“You have to have generators that draw visitors to the area,” said Douglas Moreland, a senior vice president with Disney’s Imagineering research and design unit.

The new project would mean that Disney visitors would have to pay at least three admissions to see everything in Anaheim. If the new project includes a separately gated water park--observers have speculated recently that such a park is the probable first phase of the new development--there could be four separate admissions.

For Disney, the challenge in Anaheim has long been how to change a “sea of asphalt” with aging, tacky motels and souvenir shops to “a world-class destination resort,” Disneyland spokesman Bill Ross said.

Anaheim spent $546 million on improvements to the area, including expanding its convention center by 40% and building a $90-million, 10,000-car parking garage for Disney. But lenders have been slow to fund additional attractions and hotels in the area, disappointing city officials who had hoped for new revenue sources.

The new Disney proposal could help make up the difference.

“We’re very excited, very supportive” of the new Disney park, said Anaheim City Manager James D. Ruth. “The new theme park should help stimulate development in the area.”

Disney and city officials said no street improvements, sewer or utility work will be needed to enable Disney to build, though the city will need to rezone the strawberry field from hotel to theme park use.

Long-range plans for the expansion involve a second huge garage that would house 9,000 cars on the site of the former Grand Hotel. Moreland said Disney would not ask the city to pay for that garage.

Disney previously has started and halted efforts to build theme parks, depending on economic and political conditions. It scrapped a plan, for instance, to build an American history-themed park on the East Coast after objections from community activists and historians who said it would be too close to a Civil War battlefield.

Disney also scrapped an earlier $3-billion project to build an Anaheim version of its Epcot Center in Orlando because Chief Executive Michael Eisner wasn’t comfortable with the financial projections. California Adventure, which replaced the “Westcot” project, will cost the company about half as much.

Staggs, the chief financial officer, also said Disney would weigh the community’s response in moving ahead with the third park.

Some Say Disney Should Wait

Not everyone was enthusiastic about the prospect of a third Disney park.

“It seems a little foolhardy to me,” said Steve White, a member of Anaheim Homeowners Maintaining Their Environment, a group that opposed California Adventure.

He said the city should wait to make sure that California Adventure opens smoothly and that repayment is assured on $510 million in improvement bonds before it begins approving another park.

“I thought they would wait to get some reaction to their second gate” before starting the process toward a third attraction, Shelton said. “I presume we would be supportive of whatever they are doing. I can’t imagine they would do anything that’s horrible for the area.”

The current addition at Disneyland includes not only the $1.09-billion second park, but also the Downtown Disney retail and entertainment mall, expected to cost $159 million and the Grand Californian, a $186-million luxury hotel.

Disney is creating similar complexes of hotels, restaurants and shops at all its parks.

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Times staff writer Leslie Earnest and Times correspondent Judy Silber contributed to this report.

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Mickey’s Expanding Empire

In hopes of developing a full-fledged urban resort, Disney took the first step Friday toward building a third amusement park in Anaheim. A “best of” theme park drawing from Disney attractions around the world would be built by 2010 on a 78-acre strawberry field.

Source: Disneyland

Graphics reporting by BRADY MacDONALD / Los Angeles Times