Disney’s plans to grow its theme parks in Anaheim, by investing at least $1.9 billion in its properties for more lands, hotels and entertainment, goes to the City Council on Tuesday, April 16, for approval.
Disney wants to build new immersive experiences in Anaheim, as it is around the world, with attractions that heighten the integration between rides and hotels, dining and shopping – all still within the property’s current footprint. Company officials say the ability to do that hinges on the project passing, which creates the flexibility for decades of development.
It’s one of the most consequential votes for the current councilmembers, with their support poised to bring in millions more visitors a year to Anaheim and help maintain the city as one of the top travel destinations in the country.
The project, called DisneylandForward, is a 40-year agreement that would guide where and how development can occur. By leveraging the expanse of its asphalt parking lots, Disney CEO Bob Iger has said the company could increase the size of Disneyland by 50%, despite assumptions of it being “landlocked.”
“We’re pleased to have reached an exciting milestone as our ambitious DisneylandForward initiative goes before the Anaheim City Council for final approval later this month,” Iger recently told investors. “We’re thrilled about many potential new stories that our guests could experience at Walt’s original theme park.”
The land-use elements of the project already got support from the city’s Planning Commission at a March meeting.
But part of the deal the councilmembers will be looking at Tuesday is more than $100 million in community benefits for Anaheim – money meant to support the city’s goals on issues such as housing and green space.
Read more about what’s being considered Tuesday: How will DisneylandForward affect the Anaheim resort district?
Most of the money is for infrastructure improvements, such as sewers and roads, around the resort area and buying some streets from the city. But, Disney would also give Anaheim $30 million for affordable housing and $8 million for parks, which the city would decide how to use.
Disney would be required to invest $1.9 billion into the resort within 10 years, and if it doesn’t invest at least $2.5 billion, it would be required in to kick in another $5 million for the city’s benefit.
That community benefits agreement has been questioned by some residents, who argue the city should try to get more money to help address the needs of the housing crisis. During a council workshop in January, Councilmember Natalie Rubalcava said she wanted more from Disney, floating the idea of the company funding a few million dollars worth of affordable housing a year in perpetuity.
Locals are also asking councilmembers to say no to selling Magic Way, an 1,150-foot street on the west side of the resort, because they use it to get to the 5 Freeway.
Disney began public discussions about DisneylandForward three years ago and company officials emphasize they have done extensive outreach to craft plans that are agreeable to residents and business owners nearby.
The changes to the resort would be transformative, much like the 1990s deal that brought Disney California Adventure, Downtown Disney and the Mickey & Friends parking garage. Development won’t focus solely on adding new lands and attractions. More hotels, restaurants and shopping options would be integrated throughout.
“DisneylandForward is very much about setting up the rulebook, for lack of a better term, that’s going to guide development for a very long period of time,” said Joe Haupt, a consultant for Disney.
Is the city getting enough?
One question that will loom large during Tuesday’s meeting is whether DisneylandForward is a fair deal for all.
Since the 1990s deal between the city and Disney, there has been a lot of attention in hindsight on what went right and wrong.
The Mickey & Friends parking garage, which the city financed with bonds in the 1990s to build and leases to Disney for $1 a year, is still being paid for using hotel taxes. It has drawn many complaints over the years for being a subsidy for the company. DisneylandForward, which is amending the 1990s development agreement, doesn’t ask for public investment.
The current state of large developments in California tends to give cities the opportunity to get concessions. The community benefits proposed for Anaheim in the now scuttled deal to sell Angel Stadium were closely scrutinized.
Mike Lyster, a spokesperson for the city, said the community benefits agreement for DisneylandForward would be a milestone for the city.
“What we did was we set out to share what the priorities are, really set by our City Council. And those are affordable housing, parks, improving streets and roads, and also just investment, because we know investment will drive more revenue for us,” Lyster said. “It wasn’t an exact negotiation on this amount or that amount. We shared what our priorities were and Disney came back with what they feel is their best offer.”
On Wednesday, the city hosted a final open house for residents to ask city staff questions and study planning graphics blown up onto presentation boards. More than 100 residents poured in.
David Flores said he wanted to learn more about the project and voice his troubles with Disneyland visitors taking up street parking in his neighborhood a few hundred feet from the parks.
Flores said the money from Disney in the community benefits agreement shouldn’t be a part of the deal.
“To me, that’s like you scratch my back, I’ll scratch your back,” said Flores, who felt the project should be evaluated on its own merits without the money from Disney to the city. That should be done separately, he said.
Duane Roberts, a local activist who publishes the Anaheim Investigator blog, argues the $30 million Disney is offering for affordable housing is far from enough. If Disney is willing to back a 1,400-unit affordable housing development near Walt Disney World in Florida, the company needs to do more for Anaheim, Roberts said.
“There is no doubt Anaheim has benefited from the cozy relationship it has had with The Walt Disney Company,” Roberts said. “But like Florida, Disney needs to make a greater commitment to affordable housing here.”
A spokesperson for Disney in a statement said the affordable housing issue is not one a single project or company can solve alone.
“Our $30 million commitment is the first and largest commitment to affordable housing for a non-residential project in Anaheim’s history, which we believe can be leveraged, sustained and redeployed throughout the life of the development agreement,” the statement said. “Successful models across the country show every dollar of private investment can yield $7 of additional investment so our $30 million commitment could generate $210 million. We are proud of our $30 million commitment, which was the result of more than a year of discussions with city staff, and we are confident will make a meaningful impact.”
Grant Henninger, a former Anaheim planning commissioner and affordable housing consultant, said his assumption is the city can leverage the $30 million for affordable housing five to 10 times over, in line with Disney’s estimate.
The city estimates that the money can be leveraged to build around 500 units of affordable housing with grant support. How many housing units can be built depends if the city focuses on smaller or larger units, but “somewhere in the 500 to 1,000 range is perfectly reasonable,” Henninger said.
Rena Langley, Walt Disney World’s senior vice president for communications, in a letter released Thursday said the company is donating land in Florida for the affordable housing project and doesn’t expect the value to exceed the value of what Disney has offered Anaheim.
Frances Noteboom, a resident who’s been engaged with Disney on the project, said she felt her neighborhood near the parks got good guarantees that mitigate the project’s impact.
“We wanted a sound wall. We wanted a setback, and we got both of those things,” Noteboom said. “We feel we did well.”
Also at odds for some residents is Disney buying Magic Way from Anaheim. Disney would pay $40 million for it and sections of two other roads, along with the city agreeing to cancel some planned roadway expansions.
But locals say Magic Way is their quickest path to the freeway and losing access to the street would snarl traffic.
As part of the development agreement proposed, Magic Way would remain as is until the city pays off resort bonds, which could happen as soon as the end of the decade. Once Disney acquires the street, it would remain open to emergency vehicles and pedestrians.
Cynthia Ward, a resident who keeps tabs on City Hall, said she and others are asking city officials to delay the vote on the overall project to work through issues, especially related to the streets. A petition has appeared online and a dozen or so gathered in opposition at the open house discussing the project.
“If Magic Way is central to everything else, they’re not going to do anything for several years,” Ward said. “So why can’t they wait … to fix this?
“I don’t understand why they can’t share the road with the public,” Ward said. “It doesn’t make any sense.”
What would be built?
While the community benefits part of the DisneylandForward proposal are defined, what isn’t is what exactly the entertainment company would build.
DisneylandForward gives them the flexibility to determine how to develop millions of square feet of theme park, hotel and entertainment space. The company so far hasn’t committed to anything, instead choosing to tease several ideas.
An “Avatar”-themed land has been propped most often as a “possibility” by Disney executives, with concept artwork shared this month showing guests on a boat attraction. Iger has said it’s Disney’s intention to bring the world of Pandora to Anaheim.
Disney officials have said they want to build more immersive attractions, such as having a hotel integrated with its themed attraction. Haupt said a good example of this is the upcoming Fantasy Springs-themed area at Tokyo DisneySea.
“That’s the kind of thing they’re talking about, where you’re in this highly immersive environment and the lines between where does my hotel, theme park all begin and end is all blurred,” Haupt said. “It’s all one complete experience.”
Leisure Business Advisors managing director John Gerner, a theme park consultant who has worked with Disney in the past, said the level of investment by Disney is roughly equivalent in spending to adding half a Six Flags Magic Mountain every year.
“With this level of investment, you would likely get a substantial increase in attendance,” Gerner said.
Anaheim’s economy and city budget are driven largely by visitors, whose spending accounts for around half of the general fund. The city estimates it will get $236 million from hotel taxes for its current budget cycle.
Disney has stated its goal for the project is to support “the ongoing transformation of the Anaheim resort into a multi-day destination resort for use by Southern California metropolitan area residents, as well as visitors from around the world.” That goes along with the industry trend of getting more visitors to stay on-site at hotels because they will spend more money versus locals, Gerner said.
“Disney has this conflicting situation where it truly is more profitable for them to go after more tourists,” Gerner said. “Although on the other hand, they don’t want to be insensitive to locals while they are doing it.”
Disney, in an online Q&A about DisneylandForward, said the large Toy Story parking lot on Harbor Boulevard “could be the perfect location to cater to local residents” and others with restaurants, shopping hotels, live music and ticketed shows and experiences modeled after Disney Springs in Walt Disney World.
Clearer however are the infrastructure changes. A new 17,600-space parking garage – one of the world’s largest – would be built on the east side of the resort and connect to the theme parks with a pedestrian bridge over Harbor Boulevard. Two more pedestrian bridges could be built over Disneyland Drive, seemingly to connect the current theme parks with new developments on the west side. And one over Katella Avenue.
The city will work later this year on making intersection improvements on Ball Road at Walnut Street and Disneyland Drive, but Lyster said the street capacity is already sufficient to accommodate guests getting off the freeway and into the parking garages.
The City Council will hold a public hearing on DisneylandForward on Tuesday, with the meeting set to begin at 5 p.m.
Residents who live close to the resort will have up to 10 minutes to speak during public comment; all others will have three.
City staff are recommending the council approve the project, which will need to be voted on at two meetings to be fully adopted.
“We are putting our best foot forward,” Haupt said,” to grow business and grow Anaheim.”
