No News, No Problem!

Whether you’re a stockholder or an avid fan, you may have noticed that there hasn’t been a whole lot of news of “really big doings” about the Walt Disney Company lately, in either big media or the blogosphere. Not to worry. There are plenty of informed sources, all too willing to step into the breach and supply journalists everywhere with a wide variety of tantalizing tidbits of information.

Alas, the great majority of these juicy morsels—oh, heck—ALL of the information that follows is pure gossip and speculation, supplied to yours truly by a variety of the usual suspects willing to chatter about the Mouse only on “deep background” (i.e. without attribution of any kind). So, prior to my blabbing, our senior editor has insisted on the following caveat:

With the exception of the quoted material from NewsLeader.com of Springfield Missouri, NONE of the following assertions regarding possible future activities of the Walt Disney Company, or any of the other parities mentioned or involved herein, could be independently corroborated by Mr. Oberleitner—nor did any of this information originate with any of the named parties. He was just too damn lazy to write a new piece for this week’s edition! And after having missed last week’s deadline, we felt that we couldn’t go another week without a new story of some kind.—Pat Holtz, Senior Editor obe-mediaone.

Now, with the machinations of the Evil Queen of the Keyboard dispensed with, let’s get on with the dish!

Back to Branson

In case you haven’t heard, it’s once again time for the folks in southwest Missouri to get themselves worked into a lather over the possibility of a Disney theme park/resort coming soon to the entertainment heart of the Midwest. This old saw has been making the rounds since the first Bush administration. This time out there’s a new twist on the old tale.

The online edition this past weekend of the Springfield Missouri News Leader reported that a request by a Springfield company called ARM Risk for road improvements for a $1.1 billion theme park in Newton County has led to renewed speculation that Disney was quietly pursuing real estate interests in southwest Missouri.

A possible Disney connection was raised when commissioners checked the company owners. On a form called “Registration of Fictitious Name” filed with the Missouri Secretary of State's office in March for ARM Risk, three owners are listed. Corporations routinely file such forms.

The owners are Michael Hill of Wilmington, Del.; Robert Brown, who lists his address as 500 South Buena Vista St., Burbank, Calif.; and Jason Johnson, who lists his address as Corporate Office, Lake Buena Vista, Fla.

On the Internet, commissioners found that the Burbank address is corporate headquarters of the Walt Disney Co. Lake Buena Vista, Fla., is headquarters of Walt Disney World Resort.

Officials at Disney headquarters in Burbank said the company would not comment on the matter.

I have to agree with Lance Hart, webmaster of Screamscape.com, and in the words of Disney’s Baby Herman, “The whole thing stinks like yesterday's diapers.”

To quote Hart, “If Disney was involved in any way in the region, looking to build their next top secret resort project, do you think they would have dropped such obvious hints?”

It’s highly unlikely that a company that was so careful to cover its tracks, while buying up tens of thousands of acres of land in central Florida back in the ‘60s, would be so foolish as to use the address of its corporate headquarters for a dummy land development company.

Methinks, as does Hart, that someone may be out to jack up the price of real estate in southwest Missouri.

The Wildest Ride in Anaheim

Who would have thought that plans to build 1,500 housing units, 225 of them low cost, in pricey Orange County, California could cause such a stir? The dispute between the Walt Disney Company and the City of Anaheim over building just such a housing complex within the boundaries of the Anaheim Resort has made headlines all over the world.

To help understand why Disney is so seemingly intractable in this matter, and what is fanning the flames of conspiracy theory, there are three things you should know.

Click to learn more about the City of Anaheim.

First, all of this is taking place in a post-Prop 13 world. Prop 13, also known as the antitax initiative, forced local California governments to replace lost funds with other sources of revenue, predominately sales and tourist taxes, tourists being the most under represented group in the state. This increased the incentive to build vast numbers of retail complexes at the expense of developing new housing, which is how you get a median price of  $675,000 for a single-family home in Orange County.

Second, Mickey’s on the hook for millions of dollars in potential lost revenues. Anaheim floated $510 million in bonds to fund the Anaheim Resort improvements. The bonds are to be repaid with funds from the city’s hotel bed tax. The aforementioned soak the outsiders’ thing. The Disney Company agreed to make payments on the debt if the bed tax failed to generate sufficient funds, which studies indicate could be in excess of  $7 million a year if new hotels aren’t built soon.

Third, the Mouse managed to get itself into this predicament by buying into the hype it generated to sell Anaheim on plans to convert Disneyland into the Disneyland Resort (DLR). Those plans rely heavily on the DLR’s entertainment and shopping district, Downtown Disney, and not one, but two new theme parks, which were supposed to increase both the volume of overnight visitors and the number of days they stayed in Anaheim, paying bed and sales taxes.

How could Disney loose?

It’s 2007 and the Disneyland Resort’s second theme park, Disney’s California Adventure (DCA), has failed to meet even modest visitor projections, and requires extensive discounting to attract local crowds. Mention the possibility of a third Southern California theme park to anyone at either Disney’s corporate or Imagineering headquarters in Burbank and Glendale and they roll their eyes, shake their heads, and walk away sighing woefully.

The dispute over whether to allow housing inside the Resort District’s boundaries may be real, however.

The theory behind how all of this came about is like something right out of the X Files. Here goes.

Weary of being kept in the dark and treated like just another bunch of theme park geeks by Disney Parks and Resorts “powerful forces” within Anaheim city politics decided to prod the Mouse. After all, nobody in city government was in a hurry to send Mickey a $7 million bill for uncollected bed taxes if they didn’t have to.

The first attempt at getting Disney to show its hand, as the story goes, came in the fall of 2005. Word was leaked to the media that the city planed to link the Platinum Triangle—the entertainment, sports, and transportation district on the eastern edge of Interstate-5—with the Anaheim Resort by building a road right through the center of the Harbor Blvd. strawberry field, long planned to be the site of the third DLR theme park. Worse yet, for the Mouse anyway, supposedly the proposal included plans to create a corridor full of shops, restaurants, and housing “comparable to Champs Elyseé in Paris or Commonweath Avenue in Boston,” none of which would be owned by Disney.

Mickey didn’t bite, perhaps because Disney’s lawyers surmised that too many obstacles lay in The Grand Parkway’s path. True, the Supreme Court had just ruled that cities could use eminent domain to take over private lands for commercial development; however, few believed the city had any appetite for confiscating land from its largest employer and longtime benefactor.

There also were problems with the Anaheim Resort Plan adopted by the city in 1994, which bans new housing within the boundaries of the resort. The Grand Parkway plan, which at that time had no developers attached to it, would have required extensive rezoning.

Developers may not have rushed to sign up for The Grand Parkway but, like so many circling sharks, they did sense blood in the water, or least an opportunity to nibble around the edges of the Anaheim Resort.

As the grand conspiracy theory goes, when master plan and mixed-use community developer SunCal decided to move forward with a plan to build 1,500 housing units on a plot of land not owned by Disney, but within the Anaheim Resort, the same forces that had previously tried to bluff Disney into disclosing plans for its undeveloped property decided to try again. This time by “giving the appearance” of seriously considering the rezoning required by SunCal’s proposal.

It worked.

This time Mickey blinked and gave the city a look at its plans and timetable for further developing the Disneyland Resort. The story might have ended there were it not for one thing. At least two members of the Anaheim City Council believed the city needed mixed-use housing, like that proposed by SunCal, more than it needed the promise of future sales and bed taxes from as of yet unannounced resort developments.

So, as the theory goes, what started out as a high stakes game of political poker between two longtime business partners has turned into a real public relations nightmare with both sides now scrambling to find face saving ways to resolve things.

The Calm Before the Press Event

For most of 2006 and the early part of this year, there has been a steady stream of both official and unofficial news about the immediate future of the DLR’s beleaguered second theme park, Disney’s California Adventure. At the company’s 2006 annual meeting CEO Bob Iger, while refusing to go into details, spoke frankly about DCA being something of a disappointment, and at the same time he acknowledged that improving the park was a major priority for the company.

This year, Disney released artwork and descriptions for two new DCA attractions: Toy Story Mania, which is currently under construction, and Carland. Their annual report also featured artwork for a nighttime water spectacular show thought to be in the works for the park’s lagoon. And then DCA fell off the radar.

Disney's California Adventure theme park at the Disneyland Resort
Image copyrigh©t obe-mediaone

At the company’s 2007 Investors Conference, held in February at the Walt Disney World Resort in Florida, Parks and Resorts chairman Jay Rasulo openly speculated about expanding Disney’s hotel operations to cities around the country. A transcript of his presentation shows that he never mentioned DCA during his presentation. The following month in New Orleans at the company’s 2007 annual shareholders meeting—aside from noting that division’s profitability—there was barely a mention of Parks and Resorts, and Rasulo did not address shareholders.

Analysts and sources close to the company, faced with a sudden dearth of news about DCA, have begun offering their own theories as to why the Mouse has gone mum about plans for Disneyland’s former parking lot. Several have suggested that the final plan for DCA’s resurrection has cleared budgetary approval, and that the powers that be are just waiting for the right event to make the big announcement.

A contrary theory holds that some Mouse House managers are fearful that such an announcement would be an acknowledgement of failure and, therefore, might jeopardize the company’s share price. Supposedly, these folks are advising that DCA be remade slowly over the course of the next several years, rather than all at once.

Additionally, others are suggesting that in light of the challenges presented by outside developers trying to rezone the Anaheim Resort , Disney may have to switch gears and commit to some form of development on the Harbor Blvd. property before it can go forward with plans to revitalize DCA.

Virtually everyone with an opinion as to what’s going to happen next with DCA agreed on one thing: barring a messy campaign by conservatives to get Rosie O’Donnell fired from ABC’s The View, the future of the Disneyland Resort could turn out to be the Mouse’s biggest PR headache this year!

C’ya real soon!