ANAHEIM — As part of a scaled-down expansion of Disneyland, the Walt Disney Co. on Monday bought the nearby 502-room Pan Pacific Hotel and renamed it the Disneyland Pacific Hotel.
The Burbank company completed the purchase of the 15-story hotel from Tokyu Corp., a Japanese conglomerate that built the hotel in 1984. Although the purchase price was not revealed, Disney reportedly paid about $36 million, real estate sources said.
The Disneyland Pacific Hotel is next door to the 1,136-room Disneyland Hotel on West Street in Anaheim. The two will be a key part of Disney's expansion of its 40-year-old theme park, brokers said.
Most of the Pan Pacific Hotel's 350 employees were offered jobs with Disney, and about 50 have chosen not to remain with the new owners, Disneyland spokesman Tom Brocato said.
"For Disney, this is a stellar deal. They will make it an annex to the Disneyland Hotel. And rates will jump from $85 to $125 a night. As they expand, it will be a home run," said Donald W. Wise, an Orange County hotel broker.
Earlier this year, Disney shelved plans to construct a splashy $3-billion theme park called Westcot, which would have included 4,700 new hotel rooms, a 6-acre lagoon and amphitheater. Instead, Disney said it would still expand Disneyland, though in a vastly scaled-down version.
"This is great for the city, because Disney is a real fine hotel operator," said Anaheim Mayor Tom Daly. He predicted Disney would continue adding hotel rooms to its empire, perhaps as many as the 4,700 it had formerly planned.
"We have a continued commitment to the city of Anaheim and its well-respected hospitality industry. The acquisition of the Pan Pacific Hotel enables us to offer additional lodging choices for the guests of the Disneyland Resort," Paul Pressler, president of Disneyland, said in a statement.
Like many Japanese investors who bought at the height of the real estate market only to see property values plummet in recent years, Tokyu recently has attempted to untangle itself from its California land holdings and recently sold properties in San Diego.
In 1991, Disney attempted to purchase the hotel, but the two sides couldn't agree on a price.
The Disneyland Pacific Hotel is next door to the Disneyland monorail station. It has 4.6 acres of grounds and includes 20,000 square feet of meeting and convention space, a swimming pool, spa and recreation area.
The Disneyland Pacific will continue operating during the transition, the company said.