Developer gives up on condo project near Disneyland
Disneyland may bill itself as “the happiest place on Earth,” but a nearby mall development that hoped to profit from the popularity of the Anaheim theme park has reason to be grumpy.
A block away from the park on Disney Way, a time-share condominium developer is giving up on its hope of building residential units on top of the garage at the Anaheim GardenWalk outdoor mall. Its development rights are now being auctioned to the highest bidder.
The winner will have the option to build as many as 400 units on top of GardenWalk’s parking structure, auctioneer Philip Powers said Wednesday.
The rights were previously listed for sale at $37 million and current bids are in the range of $22 million to $25 million, said Powers, managing director of investment bank Carlton Advisory Services Inc., which is conducting the sale through its online auction site Carlton Exchange.
Bidders include hotel owners, time-share developers and investors who may want to simply hang on to the development rights for resale later, he said.
The mall itself, which is separately owned, is in the foreclosure process. It’s set to be auctioned April 8.
GardenWalk opened in mid-2008, just before the economy began to stall. It took more than a decade to finish construction, in part because of objections from Walt Disney Co.
City officials embraced the proposed project in the mid-1990s as part of an ambitious plan to improve the neighborhood around Disneyland and the Anaheim Convention Center. The blocks surrounding the theme park had grown into a hodgepodge of motels, diners and other businesses that turned tacky with age.
But Disney, which was planning its own retail center, fought to block construction of GardenWalk. Disney lawyers filed hundreds of pages of objections.
Disney later withdrew its opposition when developers agreed to limit signs, increase parking and change traffic routes. But the project stalled again -- in part because of an economic downturn after the Sept. 11, 2001, attacks -- and the demolished site sat as an empty fenced lot.
In 2005, a new set of developers took over, paying $30 million for the land and starting construction a short time later.
Powers declined to say who was selling the rooftop development rights, but Florida developer Westgate Resorts claims ownership on its website.
The owner spent $19 million, mostly on structural upgrades to the garage, Powers said. “All the buyer has to do is pull permits to get started,” Powers said.
Meanwhile, the existing mall is in the foreclosure process with its lender, Citigroup Global Markets Realty Corp., said Bill Stone of Excel Realty, developer and manager of GardenWalk. The mall, valued at $325 million when it was new, is only 65% occupied, he said, but talks are underway with prospective tenants.
Occupants include a CinemaFusion multiplex theater, Roy’s Hawaiian Fusion Cuisine, P.F. Chang’s China Bistro, Ann Taylor Loft, Hollister and Harley-Davidson of Anaheim.
Excel hopes to negotiate a settlement with Citigroup that would leave it in control of GardenWalk, Stone said. “We would still like to hang on to it.”
