Originally Posted By Dr Hans Reinhardt Unless Disney bought it and branded it as Disney (which would require a huge capital investment) I don't see how it could be significantly more profitable than it is now. Even though the property is close to DLR it is completely disconnected from the foot traffic in and around Harbor Blvd. It's location between the rumored future development notwithstanding, I can't see any real strong reason why Disney would be interested in obtaining GW.
Originally Posted By gadzuux Capital - schmapital. They dropped $4 billion on marvel, $7.4 billion for pixar, and an additional $1.2 billion on DCA improvements. Acquiring AGW would be pocket change for them. They have the heft to create access from the Harbor Blvd entrance to the parks, and drop a couple of hotel towers in this highly desireable location. Whip snap boom - they've got guaranteed foot traffic for the mall, direct access to their two outer parking lots, and - longer term - a corridor between the current resort and the fabled "third gate". AGW - and the land it occupies - is worth more to disney than to anybody else. And it's available to them - already developed - at fire sale prices. The hotel plots alone are perfect for disney, and only make it easier for them to add a pedestrian walkway ABOVE Harbor Blvd that funnels pedestrians directly to the hotels and the retail corridor, and then beyond to the outer parking lots. They could probably get the city and state to chip in on the costs too.
Originally Posted By Dr Hans Reinhardt “ They dropped $4 billion on marvel, $7.4 billion for pixar, and an additional $1.2 billion on DCA improvements. Acquiring AGW would be pocket change for them.” Everybody knows that Disney has tons of money. The difference between Pixar, DCA improvements, and Marvel is that all those projects are expected to yield far more than what has been invested over the long term. So far GW is a flop and apparently shows no prospects for financial growth for its investors. Therefore, the question is how much capital and how long would it take for GW to succeed under Disney’s requirements for ROA. My guess is that the cost of investing in GW to make it marketable as a Disney project would outweigh any potential returns. I think the real potential is in the hotel development since Anaheim really does have a short supply of nice hotel properties. “Whip snap boom - they've got guaranteed foot traffic for the mall, direct access to their two outer parking lots, and - longer term - a corridor between the current resort and the fabled "third gate".” A lot of pro Disney/AGW arguments hinge on this no longer being proposed “third gate”. Even if Disney were to open a third gate in Anaheim it would be decades from now, if ever. So far Disney hasn’t demonstrated that Southern California can really sustain a third Disney theme park (in addition to all the other parks in the region). In my opinion the market is over saturated. In any case, assuming that a third gate isn’t even on the horizon, the investment of hundreds of millions in GW by Disney based on this remote possibility seems a bit absurd. To your point about foot traffic gadzuux: at least one hotel and maybe a few residences should have been part of AGW from the start. Of course with the housing market in the toilet maybe it was better for the developers that they avoided that risk. Certainly the hotels would have done well and they would have given the place some guaranteed foot traffic. As it is now with the fate of AGW in limbo I wouldn’t be surprised if the hotels are never built. To be honest I would have loved for Disney to have purchased the land BEFORE it got developed. Disney had an option to purchase it around the time they were gobbling up land for the DLR expansion and passed. Now it seems like it’s too late, but you never know.
Originally Posted By Dabob2 Land in Anaheim ain't growing on trees, as it were. I see GW as not particularly valuable as a mall, but as land, provided they really get it at fire sale prices. I think the best use, besides hotels, might be a waterpark. That could serve to extend out of town stays yet another day (and fill those hotel rooms) at a fraction of the price of a third theme park (while still holding out that possibility for the strawberry field in the future), and if it was a heavily themed waterpark, could draw a good number of locals also.
Originally Posted By Dr Hans Reinhardt A water park would be nice, however southern California isn't a year-round swimming location. Knowing Disney's greed and with land being in short supply I can't see management building a water park in Anaheim.
Originally Posted By TP2000 I would think Disney could own GardenWalk, but not need to brand it as DISNEY's GardenWalk. Just use Disney's property management muscle to get some hotels and stores in that vacant hulk, and let it establish itself as the economy recovers through the decade. Worst case scenario is that some cheeseball developer buys it and installs a 99 Cent Store, a Payday Check Cashing stand, and a Norm's coffee shop in there and it turns into a very different vibe and feel.
Originally Posted By Sport Goofy << Just use Disney's property management muscle to get some hotels and stores in that vacant hulk, and let it establish itself as the economy recovers through the decade. >> Disney's property management muscle? How many vacant storefronts have their been at Downtown Disney this year? Your premise also assumes that the economy is going to improve. People need to realize that we're in for a long period of economic malaise.
Originally Posted By Dr Hans Reinhardt Really? I work in the corporate special events industry and we've experienced a marked improvement in bookings since January. I'm not exaggerating when I say that the difference between this year's first quarter and last year's is like night and day. BTW, most of those vacancies at DTD were due to certain retailers either going business. What's notable is that Disney seemed to have no problem filling those locations with new tenants. I do think that Disney has the muscle to draw tenants - at DTD. There'll be nothing Disney can do if they buy GW and leave it as is. The problem with the place, besides having no foot traffic, is that there is absolutely no draw. As a mall AGW is a dud pure and simple.
Originally Posted By TP2000 Actually, Downtown Disney Anaheim is an excellent example of Disney's property management strenght, and how Disney can fill space at lightening speed (for the retail world) with viable and valuable replacements. Illuminations, Starabilias, Libby Lu, and Dept. 56 all folded on a national scale after their weak corporate parents were caught in the 2008-09 credit crunch. They closed every single store they had in America quite suddenly, not just their Anaheim DTD locations. That's a scenario that every mall manager is terrified of; corporate parents going belly up and abandoning stores with just a few weeks notice. But Disney got replacements into those DTD spaces within months, even doing temporary locations at first to get the space filled for Christmas before the permanent stores could be built. Ridemakerz, Kitson Kids, and two uniquely Disney stores have filled those spaces now, and the replacements are doing well traffic-wise. And they are a great fit demographically for DTD, perhaps even better than the original stores. (Illuminations? Dept. 56? What mall didn't have one of those shlocky places?) GardenWalk has seen a dozen stores close in recent months, with nothing replacing them but butcher paper covering the windows.
Originally Posted By Dabob2 "A water park would be nice, however southern California isn't a year-round swimming location. Knowing Disney's greed and with land being in short supply I can't see management building a water park in Anaheim." It is nearly so. And other waterparks have proven successful there. Theme it well enough and you give people a reason to stay another day and think of DLR as a multi-day destination to a greater degree, at a fraction of the price of a third theme park. And because it's a different "animal" than a theme park, you'd probably get a decent number of single day tickets. It's probably just academic at this point, but that's what I'd strongly consider doing with it, anyway. If I were king of DL and stuff.
Originally Posted By Sport Goofy << Ridemakerz, Kitson Kids, and two uniquely Disney stores have filled those spaces now >> If Disney has to shell out money to fill 50% of its vacancies with more variations of the World of Disney store that is already ubiquitous throughout DL, then that's not a very strong position to be in. I suspect those "uniquely Disney" stores are losing money hand over fist. They don't have the option of filling GardenWalk up with a bunch of World of Disney variations.
Originally Posted By gadzuux But if guests were given the option of walking back to their cars - through AGW along the way - with wide pedestrian lanes rising up and over Harbor and then continuing along a raised walkway through the 2nd storey of this open air mall, away from city sidewalks, cars and busses - that's the very definition of guaranteed foot traffic. And it can be schlocky outlets like Bubba Gumps and Fuddruckers. Disney doesn't have to maintain the same level of prestige over here. I think they could not only make it work, they could make handsome profits with this. Get the hotels up quick - with the overhead ramps - and the rest will fall nicely into place. To more effectively create a sense of place for bringing guests to this raised level, have the hotel lobbies up on the 2nd floor, and continue the passage through to the 2nd floor of AGW, with the wide access to keep the flow of people who are just heading back to the cars on the upper deck and the larger anchor tenants below on the lower 'street' level. It's all too perfect, which is why it'll never happen.
Originally Posted By fkurucz >>How's that for a reasonable argument? << If the price is right. At $210 million, probably not.
Originally Posted By fkurucz >>Really? I work in the corporate special events industry and we've experienced a marked improvement in bookings since January.<< But does Joe 6 Pack have any money?
Originally Posted By Dr Hans Reinhardt "If Disney has to shell out money to fill 50% of its vacancies with more variations of the World of Disney store that is already ubiquitous throughout DL, then that's not a very strong position to be in" Are you saying that Disney has to spend money to get tenants? If so I imagine that cost is minimal in comparison to the rent + percentage of sales that they likely slap their renters with. gadzuux, your ideas make perfect sense, but the problem is that everything you outline requires a large capital expenditure. Given the track record of AGW so far I don't see why Disney would dump more money in the place. It just seems like a huge financial risk and doesn't particularly enhance the operations that Disney currently has in Anaheim. Maybe I'm wrong... I just don't see it working. "But does Joe 6 Pack have any money?' Not yet, but the economy is clearly rebounding. Joe 6 Pack will have his day and hopefully it will be sooner rather than later. Usually one thing leads to the other you know...
Originally Posted By Sport Goofy << Are you saying that Disney has to spend money to get tenants? >> I'm saying that if Disney has to occupy storefronts with its own versions of World of Disney just to fill shopspace, it's spending money on overhead and inventory and losing money on rent.
