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Disney World Plans Back on Track : Impasse Ends on Building of Hotel-Convention Center

January 29, 1988|KATHRYN HARRIS | Times Staff Writer

A two-year impasse in the construction of a huge hotel and convention center complex at Walt Disney World in Florida ended Thursday with the announcement that most of the original developers, led by Tishman Realty & Construction, will proceed with a project.

The announcement came 48 hours after the companies agreed to settle a lawsuit filed by Tishman and 14 partners in February, 1986, accusing Disney of violating an agreement not to offer special privileges to another hotel operator and seeking more than $1 billion in damages.

Although Disney made no mention of the lawsuit in its prepared release, company executives confirmed the settlement. "The lawsuit itself was immaterial," said Disney General Counsel Joseph Shapiro. "We didn't think settlement of the lawsuit deserved mention in the press release."

The convention complex originally was billed as a $265-million project scheduled to open this year on a 68-acre tract at Lake Buena Vista. Tishman and Disney executives said Thursday that a new site has been selected between Epcot Center and a new studio tour attraction currently under construction.

"Now we are right next to Epcot; we feel that it's a much better site, and this was part of the settlement," said Richard M. Kielar, a first vice president of Tishman Realty & Construction. The project, designed by architect Michael Graves, is scheduled to be completed in 1990.

Disney Chairman Michael D. Eisner said: "No consideration was paid in settlement of the lawsuit. The lawsuit were dismissed, and we went on and made a deal."

The new convention and resort hotel complex is expected to cost $375 million, with 2,270 guest rooms in the two-hotel complex, or 17 fewer rooms than initially envisioned.

Didn't Joint Lawsuit

Under the original proposal, Sheraton Corp. would have operated the larger hotel while Holiday Inns operated a 12-story Crowne Plaza hotel. Holiday Inns is no longer part of the project. In its stead, Westin Hotels & Resorts will open a 760-room hotel in 1989.

Holiday Inns never joined the lawsuit against Disney, Tishman and Disney executives noted. "I just think they felt they didn't want to wait until we were ready to move on this," said Tishman's Kielar, in explanation of Holiday Inns' withdrawal.

Westin has been operating as a subsidiary of Allegis Corp., the parent company of United Airlines, but Allegis agreed last fall to sell the 62-hotel chain to Aoki Corp. of Japan and the Robert M. Bass Group of Ft. Worth.

Aoki, a Japanese construction firm, is a partner in the hotel project. Robert Bass was once a significant Disney shareholder but no longer owns any Disney stock as an individual, according to Eisner, who said he has never discussed the Westin project with Bass.

As with the earlier project, Disney will have no role in financing the hotel complex, Eisner said. In explaining the companies' previous differences, Eisner noted that the earlier project was begun under previous management at Disney.

In the Tishman lawsuit, the construction company had contended that Disney had promised not to allow any other hotel firm to operate a convention hotel inside the park for 10 years after the Sheraton complex opened but then considered granting Marriott Corp. the right to operate a central hotel reservation system and a possible joint venture with Marriott to build moderate-priced hotels.

On Thursday, Eisner said: "We have complicated arrangements that came out of this deal. There is not total exclusivity in the area of hotel operation; there are some . . . (prohibitions against building) a convention facility of this size for some period of time."

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