Disneyland pitches a big payday for Anaheim

May 17, 2023, 10:37 PM · Disneyland Resort leaders continued their pitch today for more planning flexibility with a presentation at the Grand Californian to more than 300 local business and community leaders.

It's the latest in a series of community meetings about the resort's DisneylandForward proposal, which would replace the 20-plus-year-old rules that govern where Disney can build what on its Anaheim property.

The City of Anaheim is preparing an environmental impact report on the proposal, which would allow Disney to build attractions on space currently reserved for use as parking lots. DisneylandForward also would allow Disney to mix theme park and hotel development, building new rooms inside its parks, which is not allowed under the current rules.

DisneylandForward would not expand the number of hotel rooms and acreage of theme park attractions that Disney is allowed to develop. Disneyland already is permitted to develop more hotels and attractions that it has been able to fit into its current land use plan.

But if Disneyland were to be able to develop its full number of permitted hotel rooms and attraction space, that would generate a massive economic boom for the City of Anaheim, according to an economic impact report commissioned by Disneyland and presented during the OC Forum lunch meeting today.

Dr. Anil Puri of Cal State Fullerton said that the Woods Center for Economic Analysis and Forecasting's report estimated that a full build-out of Disneyland permitted entitlements would result in the addition of 28,352 ongoing jobs in the city. For context, Disneyland Resort President Ken Potrock today announced that the resort now employs more than 34,000 cast members - more than it did before the pandemic closed the resort in March 2020.

Puri also said that the report forecast that the Disneyland Resort building all of its permitted entitlements would result in $244 million annually in additional Anaheim Resort Area tax revenue, which is more than a 100% increase over pre-pandemic tax income from the resort area.

Puri's report also said that each billion dollars that Disneyland spends on new attractions at the resort generates an additional $253 million in economic output annually for Anaheim.

Disneyland officials said in a press briefing following this afternoon's presentation that they see DisneylandForward as an agreement between the resort and the city that will guide Disneyland's development for the next 30-40 years.

The presentation of a draft environmental impact report will be the next big step for DisneylandForward, followed by a public comment period before the proposal goes to Anaheim's planning commission and ultimately its city council for approval. Disneyland officials said that they hope to get to that sometime in 2024.

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Replies (6)

May 18, 2023 at 9:38 AM

The calculations performed for projection analyses like these always distort reality to appear more attractive than they are. Look at any new stadium, concert venue, or entertainment development proposal and you see loads of exaggerations and unrealistic estimates. However, governments are increasingly buying these projections and then wondering why the economic impact never materializes as promised.

Let's put a realistic filter on some of these bogus numbers...

1. Disneyland currently employs 34,000 CMs, but building out all of their "entitlements" would create another 28,352 "ongoing" jobs (I assume some of these would be construction/development jobs on top of standard operational CMs)???? Even conservatively, we're talking about another 25,000 full time operational CMs if Disneyland expands to it fullest potential based on current allocations. Are we really supposed to believe that Disneyland can grow nearly 75% building on parking lots, expanding current hotel footprints, and optimizing all available space? Whenever a property like Disneyland expands, it is going to create staffing efficiencies that will slowly decrease the ratio of employees to utilized square feet. Does Disney really think that Anaheim is going to buy this phony "back of a napkin" calculation that suggests the company will increase its employee to land utilization ratio???

2. Disney claims that they generate $253 million of economic impact annually for every $1 billion spent. I would really like to see the support for that, because they should have some pretty solid recent data to justify these numbers. Disney completed Galaxy's Edge in 2019, which reportedly cost a bit over $1 billion in California. So does this mean that Galaxy's Edge ALONE has realized over $1 billion of economic impact for the City of Anaheim since its inception (or at least that would have been the expectation if not for pandemic shutdowns)??? I highly doubt that, because while Disney has claimed solid financial performance for its Parks and Experiences division over the past couple of years, there's absolutely no way 75% of the increased revenue generated over the past 4 years is solely based on Disneyland's Galaxy's Edge. This statement is complete and utter shenanigans. New attractions generate new revenue and sometimes new streams of revenue, but to say that Disney can reliably offset the cost of an attraction or development in just 4 years is hogwash.

There are clear motivations to fluff the numbers here and to dramatically overstate the impact of allowing Disney to develop their property to the fullest, but they don't need to use such ridiculous projections and estimates to sell themselves to an entity that is always going to roll their eyes and look for ulterior motives at expansion plans. It's almost like Disney thinks they're pitching to idiots, not a entity that has been closely scrutinizing their business for nearly 70 years.

May 18, 2023 at 1:59 PM

Sure, but even if they're overstating the positive economic benefits by 100%, it's still going to be a big boon to Anaheim, and what's the downside? As I understand it, the plan is to build on land they already own, so why not? Sounds to me like they're just trying to overcome some unnecessary, draconian limitations that were placed on them long ago.

The area around Disneyland is pretty scuzzy. If growing Disneyland helped improve the area more generally, even at a fraction of what Disney is proposing, that would be good thing.

May 18, 2023 at 3:23 PM

The employment numbers in the report were for total number of jobs created in the Anaheim community resulting from direct investment by Disney and indirect benefits of increased visitation to the city. They did not include construction jobs, which were in another section of the report. (TL;DR - lots of those, too. But they are by nature temporary.)

Also, even if Disneyland gets DF approved, it still likely won't be able to build out all of its entitled hotel rooms and attraction space. So the likely fiscal and economic benefit to Anaheim will almost certainly be less than this forecast. But I do not doubt that they would be substantial.

May 18, 2023 at 4:02 PM

Disney seems like its in a full court press mode. Moving to get the Central Florida Tourism Oversight District's lawsuit thrown out, pitching DisneylandForward concept and pulling up stakes in Lake Nona.

The more they hammer away the more Governor DeSantis has to devote time in response.

Pass the popcorn.

May 18, 2023 at 4:04 PM

My wife Punky just had to help me up off the floor because I actually agree with something posted by thecolonel.

Extra points for using the word "scuzzy".

May 19, 2023 at 1:52 PM

I never understood Anaheim's deal when it came to Disney. Its not like the resort is next to some pristine ecological reserve. Its in the middle of suburbs surrounded by highways. Just let them build whatever the hell they want and enjoy the extra tax benefits and economic revenue that comes with it!

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