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Disney looks home for renewal

The company moves to transform Anaheim's Resort District in the image of the popular Walt Disney World. But critics remain skeptical.

October 18, 2007|Dave McKibben, Andrew Blankstein and Christopher Goffard | Times Staff Writers

Since California Adventure made its debut six years ago, billed as Disneyland's hipper, edgier younger sibling, the entertainment colossus founded by Walt Disney has wandered far from the Orange County city where he launched his first park in 1955.

Now, with Disney executives planning a massive retooling of the struggling California Adventure, the company is showing a renewed push to transform Anaheim's Resort District -- as much as possible -- in the image of the spectacularly successful Walt Disney World.

Rather than a one- or two-day stop for guests, Disney hopes to keep visitors at its Anaheim attractions for longer stretches.

"They see a hub here they didn't realize they had," suggested Al Lutz, who owns and edits the popular fan website Miceage.

While the California Adventure makeover is the clearest sign yet that Disney is looking homeward, there have been recent signals the company was reinvesting in Anaheim.

Last month, Disney announced it was adding 50 time-share units to the Grand Californian Hotel & Spa and broke ground on a 250-room expansion.

There are also plans to bring its popular cruise line to the West Coast and capture big-spending consumers with boutique hotels. And there is continued speculation about a long-awaited third park on what is 53 acres of strawberry fields and parking lots.

The California Adventure remodel comes at a time when tourism is booming in Orange County, with a reported 45 million visitors last year -- a six-year high -- and a record $8 billion in visitor spending.

"This will be kind of a second renaissance for the area," said Elaine Cali, a spokeswoman for the Anaheim/Orange County Visitor and Convention Bureau. "The first came when they built California Adventure, Downtown Disney and expanded the Convention Center."

At the same time, Disney and Anaheim city leaders have been locked in a stormy yearlong dispute over a proposal to build condominiums and low-cost apartments near the parks.

The battle has fueled a lawsuit, competing ballot initiatives and regular protests at council meetings -- odd behavior in a city that had a cozy relationship with Disney.

Disney has found itself face-to-face with union and religious leaders who have demanded that the entertainment giant do more to provide affordable housing for its low-wage earners. It seems certain to be a campaign issue in next year's city elections.

Long criticized for its shortage of children's rides and its failure to connect emotionally with visitors, California Adventure has seen disappointing attendance since its 2001 opening.

At a news conference Wednesday, Disney executives confirmed plans to overhaul, and perhaps rename, the struggling park in the image of the Los Angeles that Walt Disney experienced when he arrived in the 1920s, complete with a Main Street and a replica of the Carthay Circle Theatre where "Snow White and the Seven Dwarfs" premiered.

Disney executives refused to say how much the overhaul -- which is expected to begin in late 2008 and run until 2012 -- would cost, though sources put the figure at roughly $1 billion.

Asked whether the new plans represented an acknowledgment that California Adventure was a flop, parks and resorts Chairman Jay Rasulo replied: "I don't consider that on any level to be a failure." He portrayed the overhaul as an "incremental investment" rather than as a top-to-bottom reimagining of the park.

Disney observers say the resounding success of Disneyland's 50th anniversary spurred the company to reinvest in Anaheim.

"It woke them up to the fact that this park has always consistently performed," Lutz said. With Disney's focus on Orlando, Fla., and on overseas parks, he said, "They forgot about Anaheim." But now, "they see this is as such a rich market that they haven't even begun to tap."

Though California Adventure has fallen short of expectations, David Miller, an analyst with Sanders Morris Harris, said the park's poor performance has not affected the company stock price, mainly because Walt Disney World in Florida accounts for about 80% of the company's theme park operating income.

If Disney's plans to remake California Adventure prove successful, industry observers say, it could spur the company to revamp a struggling companion park to the Disney park in Paris, to add a second park in Hong Kong or to launch the long-rumored third park in Anaheim.

"I think Disney sees an opportunity to make Anaheim a stronger overall product," said Ray Braun, senior vice president of Economics Research Associates, a real estate development consulting company.

Still, some remain uncertain about the depth of Disney's commitment to the area. Anaheim Councilman Bob Hernandez said he was not certain that Disney would follow through on its big plans for California Adventure.

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