Disney Weighs Options to Build Separate Anaheim Attractions

October 15, 1987|MARY ANN GALANTE | Times Staff Writer

There may come a time when kids who grow up with the Magic Kingdom can graduate to the Magic Shopping Mall.

The Walt Disney Co. is considering developing an "international festival marketplace" or perhaps a "studio tour" attraction--among other options--on almost 70 acres adjacent to Disneyland in Anaheim.

And even if Disney's pending deal to participate in a $152-million acquisition of the Wrather Corp. falls through, the Burbank-based company seems destined to get into the Southern California hotel business, by assuming control of the Disneyland Hotel.

Disney and Hong Kong-based Industrial Equity (Pacific) Ltd. agreed in late September to jointly buy Wrather, which owns the Disneyland Hotel and operates the Queen Mary and Spruce Goose tourist attractions in Long Beach. The deal is expected to close by early January.

According to papers filed recently with the Securities and Exchange Commission, if the two firms are unable to agree on a joint business plan by early next year, Disney has the option of buying Industrial Equity's 50% interest in Wrather or selling its 50% interest to Industrial Equity.

If Disney sells its interest to Industrial Equity, it would be entitled to take out, for $2 million, a 10-year option to buy 26 acres of Wrather-owned land southwest of Disneyland and south of the Disneyland Hotel. In addition, Disney would receive a 25-year management contract to operate the Disneyland Hotel.

Disney has long been interested in running the hotel, located immediately west of the Anaheim amusement park. In fact, Disney negotiated as recently as 1980 to buy the 1,174-room facility. At Walt Disney World in Florida, the company owns and operates three hotels.

With Walt Disney World and the popular Epcot theme park in Orlando, Fla., set amid acres of restaurants, hotels and shops, Disney is "encouraging people to stay longer in Florida," said an industry source who asked not to be named. "And I imagine they would like to encourage people to stay longer in Anaheim."

To do that, the company has long been studying plans to add a second, separately gated park on a 40-acre strawberry field that the company owns west of the 80-acre Disneyland complex.

The 40-acre parcel is just north of the Disneyland Hotel. When added to Wrather's mostly vacant tract south of the hotel, Disney would have almost 70 acres available for development.

But with the Wrather deal, Disney won't stay in the strawberry business for long.

Erwin Okun, vice president of corporate communications for Disney, said Wednesday: "We have no firm plans. There's no project I can say is definite."

Okun acknowledged, however, that an earlier option to build a smaller-scale facility, similar to Epcot, has been scrapped. But an international-style marketplace with a Disney entertainment emphasis is one possibility, and an elaborate studio-tour attraction is another, he said.

Either project could parallel Disney's existing plan to build an elaborate theme park, shopping mall and "Hollywood Fantasy Hotel" at a 40-acre redevelopment site in downtown Burbank, industry sources said.

A festival marketplace, for instance, would likely combine a merchandise complex offering food, shopping and entertainment--similar to San Francisco's Ghirardelli Square or Boston's Faneuil Hall, one amusement park expert said.

Meanwhile, with the Wrather deal about to close, Disney is expected soon to start offering tie-in packages to attract Disneyland visitors to the Queen Mary and Spruce Goose, industry sources said Wednesday.

Disney is expected to proceed with Wrather's plans to add a 350-room hotel next to the Queen Mary and Spruce Goose by 1988. Wrather has also proposed building dozens of specialty shops, four office buildings and a large exhibition hall, all within 15 years.

"We're going to certainly be looking at doing something," said Richard Nanula, Disney's manager of acquisitions and strategic planning in Burbank.

He emphasized that no decision has been made by Disney about what it will do in Long Beach, although its plans could involve construction.

Just 1.2 million visitors pass through turnstiles at the Queen Mary and Spruce Goose annually, which is considered a disappointing attendance figure, so Disney almost certainly will try to attract some of the 12 million guests who flock to Disneyland every year.

Both the Spruce Goose and Queen Mary are one-visit attractions that draw a limited, older audience, industry observers said.

"Disney clearly can jack up attendance right away because it has a lot of ability to cross-promote," said one source. "They'll obviously spruce up the goose . . . and do cooperative promotional things."

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