Disney, China inch closer
Walt Disney Co. said Friday that it would submit plans to build its first theme park in mainland China, targeting one of the largest and most prosperous markets in Asia.
The Burbank entertainment giant released a statement confirming its plans as news broke that the company was working with the Shanghai municipal government to build a $3.59-billion park to open as early as 2014. It would be Disney’s fourth theme park outside the U.S., after Paris, Tokyo and Hong Kong.
A Disney spokeswoman portrayed the development as a milestone in a lengthy review process, which ultimately must be negotiated and approved by China’s central government. But no deal is in place, and the project is yet to be approved.
“Discussions have been ongoing about the feasibility of a theme park project in China,” said Leslie Goodman, a spokeswoman for Walt Disney Parks and Resorts. “We worked on a joint application report with the Shanghai government which will be submitted to the central government for review.”
The Shanghai Securities News, which is affiliated with the state-run New China News Agency, reported earlier this week that Disney had concluded negotiations on building a theme park in Shanghai, a report the company denied. The news organization, citing an unidentified expert carrying out a feasibility study on the project, predicted an announcement would be made soon.
Kang Fuxiang, chief of Qigan village near Shanghai’s Pudong International Airport, where the park would be built, said Friday that he was told by local officials that an agreement was signed this week that included basic terms. Though the first phase would cost $3.59 billion, Kang said he understood the total project investment would exceed $5 billion.
“Of course this is great news,” he said. “We’ve been waiting for many years.”
Kang said he was told that relocation of villagers would likely begin in the first half of this year so construction could begin in the largely wooded and farm lands.
The Wall Street Journal reported Friday that Disney and the Shanghai government had signed a proposal outlining the legal and financial framework for a theme park. Disney would take a 43% equity stake in Shanghai Disneyland, while a joint-venture holding company owned by the local government would own the majority 57%, the newspaper reported. The first phase, to be built on about one square mile, would include a theme park, hotel and shopping district, costing $3.59 billion and constructed over six years on a site near the Shanghai airport, the newspaper reported.
A Disney spokeswoman refused to provide a copy of the plans or to confirm the terms.
Chinese officials and Disney have discussed ideas for a theme park at the eastern fringes of Shanghai for more than a decade.
Speculation has intensified recently, fanned by Chinese media reports that Disney and Shanghai officials had come to terms.
Some Chinese are so confident that they’ve loaded up on shares of companies with interests in this part of the Pudong district where a park would most likely be built.
The timing of the project is slightly later than expected. Village leaders in Pudong say they heard the park would open in 2012 -- two years after the Shanghai World Expo.
One theme park consultant said Shanghai, a sprawling, affluent and modern city of about 16 million people, makes sense as a site for a Disney park.
“It’s one of the largest markets in the world, if not the largest market in the world,” said James H. Higashi, a principal of Management Resources in Tustin, a consultant to the theme park industry. “It’s one of the prime markets in the world, with a growing middle class. It certainly is a target market.”
In building the 320-acre Hong Kong Disneyland that opened in 2005, the government put up $2.9 billion for the park and related infrastructure development, while Disney invested $314 million.