Apparently it is a small world, after all. Too small, that is, for the Walt Disney Co. and California multifamily developer SunCal Cos., which are at odds over SunCal's proposed construction of a 1,500-unit condo and apartment complex in Anaheim's tourist zone, a 2.2 square mile patch of the O.C. that has been off-limits to residential development since 1994.
On March 20, the Anaheim City Council voted 3-2 to reconsider those zoning restrictions during a late April council meeting (after press time). It's likely to be another round in an ongoing clash that could also see action in the courtroom and at the ballot box.
Disney—which envisions a third theme park on acreage it owns within the tourist zone—contends that residential development would put a squeeze on tourism, Anaheim's No. 1 industry. In an April 4 article in USA Today, company vice president of communications Rob Doughty said the neighborhood generated $80 million in hotel and sales taxes in 2006, and SunCal's project—along with two smaller developments proposed by Parc Anaheim and West Millennium Homes—could create a land grab detrimental to that revenue stream.
To prevent such a scenario, Disney for some time has been maneuvering to block development in the neighborhood. Most notably, the company formally objected to Anaheim councilwoman Lucille Kring voting on the proposed zoning changes when it came before the council on Feb. 13. Kring, who has interest in the construction of a wine bar in the tourist zone, was deemed not to have a conflict of interest by a state ethics agency. She cast the deciding vote in March and will be allowed to vote on the issue moving forward. Disney also sued the city of Anaheim on Feb. 26, asking for an environmental impact study on SunCal's proposal.
SunCal's planned project, which will be located directly across from Disney's yet-to-be-built theme park on property that used to be a mobile-home park, includes both affordable housing and market-rate condos. According to SunCal agent Frank Elfend, that proposal is in line with a 2005 city study that determined rezoning would not hurt the transit occupancy tax generated by visiting tourists.
“We have several different plans, including up to 1,500 units of a variety of product from podium to high-rise, but there has never been a single communication with Disney where they have suggested any compromise with us on this proposal,” Elfend says. “The fact of the matter is that Disney's idea of compromise is intimidating elected officials, suing the city, and then coming up with their own initiative to reflect their business interests.”
Critics of Disney—including Kring, fellow councilwoman Lori Galloway, and Los Angeles Times columnist Steve Lopez—have taken up affordable housing as a cause célèbre, pointing to Disney's 21,000 strong work force, many of whom earn below the O.C.'s annual per capita income of $40,380. “Maybe Disney should just lock them all on the premises at night and let them sleep in the Haunted Mansion or the Swiss Family Robinson tree-house,” Lopez wrote in a March 4 Times editorial.
In the media, Disney claims that it is not affordable housing, but housing of any kind, that the company objects to in the tourist zone. The company is collecting signatures to put an initiative on the Feb. 5, 2008, presidential primary ballot that would require a city referendum on any change to boundaries or zoning within the tourist zone. Doughty tells USA Today that the referendum, combined with lobbying the city council and leveraging the courts, “shows how important we think this is.”
“If Disney wants to go ahead with a referendum, we will coalesce the community [in favor of new zoning],” counters Elfend. “We are in it for the long run. Otherwise, there's no reason to have city government. Disney can make all of our decisions, and anyone who wants to do anything in the city of Anaheim should just go see them.”
For an update on the April 24 Anaheim City Council vote and further news on development within the Anaheim tourist zone, point your browser to www.multifamilyexecutive.com.