In a conference room on the seventh floor of Anaheim’s City Hall, the future of Orange County’s $4.84 billion tourism industry and much of the county’s identity are being debated.
In a typical session, three representatives from Walt Disney Co. and a like number of city officials pore over the minute details of the entertainment giant’s proposed $2.75 billion expansion plan. From what elements will be part of the proposed world’s fair-style park complex to precisely where palm trees along Harbor Boulevard would be planted, each piece of the intricate project is being fitted.
“It’s taking longer than expected,” said Doug Moreland, Disney’s project manager. “It’s more complicated, there are more issues-it’s going to take the rest of this year to work out.”
Under terms of the formal development being crafted by the city and Disney, the company would not have to start sawing and hammering on the expansion until early 1997, thus pushing its opening into the next millennium.
Time, though, is on Disney’s side, and Moreland and his team are running uphill on the increasingly complex decision on the project, hoping to extract enough financial support from the city, state and federal government to make the plan work economically for the company.
And new economic and political uncertainties have arisen-a possible Orange County intercontinental airport, a change in the governor’s office and resolution of some of Disney’s internal problems.
Still preoccupied with getting its Euro Disneyland into the profit column, Disney officials acknowledged late last year that the Disneyland expansion probably would be smaller than originally planned, at least initially, and be built over a longer time.
“We are all finding out it is more difficult than we thought,” said Anaheim City Manager Jim Ruth, saying both sides remain enthusiastic about the project “whether it takes on some other form or size.”
After Disney and the city reached tentative agreement on the plan earlier this year, Ruth, Moreland and their lieutenants were left to work out the details.
And there are thousands of details. A smaller park with fewer hotel rooms than originally planned would mean a reduced tax stream to pay for road and utility improvements needed to support the expansion. More state and federal funds are being sought for those improvements.
Originally, construction was to have begun this year but that was in the euphoric days before the billion-dollar loss at Euro Disneyland. Disney wanted the formal agreement with the city to allow it up to five years to begin construction; the city wanted work to begin as soon as the agreement was completed.
A compromise was reached-two years. “Westcot will happen in some fashion, but plans could be fluid for years,” said Michael Meyer, managing partner of the Newport Beach office of the accounting firm Kenneth Leventhal & Co.
That gives Disney time to stabilize Euro Disneyland, reach a decision on its proposed U.S. history theme park near Washington and get a better gauge on Southern California’s tourism prospects in the post-recession-riot- earthquake-wildfire era.
No need for Disney to rush a Disneyland expansion, experts say. “They don’t have to go at breakneck speed,” said Edward Froelich, an entertainment-industry analyst at the brokerage firm Pershing & Co., based in Jersey City, N.J.
Thicker than rush-hour freeway traffic, the factors Disney and the city face in deciding what and when to add to Disneyland grow more complicated daily.
The arithmetic alone is staggering. As originally proposed, Disney would build a $2 billion, world’s fair- type park-dubbed Westcot Center-adjacent to Disneyland. The project would include hotels, shops, restaurants and an amphitheater.
The city, state and federal governments would help finance the $750 million in road and utility improvements Disney and the city say are needed for the project.
A study commissioned by Disney three years ago projected that the expansion would generate 27,900 new jobs, $2.3 billion in new economic activity annually and $9 million every year in new taxes to the county.
That was at full buildout, originally projected for 2005. Since those heady early planning days, much has changed, however. Some of the new factors now influencing the Disney decision in Anaheim:
– The El Toro debate. An intercontinental airport at the closing Marine Corps air station would give a Disneyland expansion a dramatic boost by greatly enhancing Orange County as an alternative to Los Angeles International Airport. Voters will decide El Toro’s future in the November election.
An intercontinental airport and an expanded Disney complex in Anaheim would whisk Orange County into the elite ranks of destination resorts such as Orlando, Fla., and Las Vegas.
– The governor’s race. Gov. Pete Wilson is viewed as strongly pro-business, personally making a trip to greet Lego Group officials when they decided to build a $100 million theme park in Carlsbad.
By contrast, Democratic challenger Kathleen Brown is much less of a known quantity on business. Repeated calls to her headquarters seeking her views on the public-private partnership sought by Disney were not returned.
– Disney’s uncertain management hierarchy. The decision-making process now is clouded.
With his precise, lawyerly manner, Disney President Frank Wells was the perfect counterbalance to the sometimes-creative exuberance of Chairman and Chief Executive Michael Eisner. Wells’ death earlier this year in a helicopter accident and Eisner’s heart-bypass surgery in July have raised questions about the decision-making process at the company’s Burbank headquarters. Ultimately, Westcot will be Eisner’s call, but after listening to whose advice?
– Crushing pressure to be new every year. Disney said its Indiana Jones Adventure set to open in January will cost about $100 million; the company spent a like amount on Toontown, which opened last year.
“Theme-park development has become an arms race,” said Rick Bastrup, president of Anaheim-based R&R Amusement Designs Inc. “It gets more challenging all the time.”
