Anaheim makes ambitious push to expand tourism beyond Disneyland

August 3, 2015

A construction worker installs sealant in one of the giant water slides at the Great Wolf Lodge in Garden Grove, Calif., on June 26, 2015.

ANAHEIM, Calif. — Known for 60 years as the home to Disneyland, Anaheim is pushing the idea that there’s more for tourists to do — and spend money on — than ride on Space Mountain and snap a selfie with Mickey Mouse.

Among the new offerings are a food mall that was converted from an abandoned orange packing house and a brewery built within an old Packard car dealership. Five hotels with more than 1,000 rooms are set to open over the next 12 months, in addition to three hotels with 470 rooms that opened last year.

The Anaheim Convention Center recently broke ground on a 200,000-square-foot expansion. A 600-room hotel with a 105,000-square-foot water park is also set to open in adjacent Garden Grove next year.

"It’s great to see it all happening at once," said Jay Burress, president of the recently renamed Visit Anaheim. The tourism organization changed its name from the Anaheim/Orange County Visitor & Convention Bureau to put the focus on Anaheim.

With taxes from hotels and Disney theme parks generating about half of the city’s $286 million general fund, Anaheim officials are banking on the prospects that tourism will continue to flourish. The city welcomed 21.7 million visitors last year, up 16 percent from the previous year. The average hotel occupancy rate in the city rose to 79 percent last year from 70 percent in 2010.

Some of Anaheim’s new developments were spurred by a strengthening national economy and the decision by Walt Disney Co. to invest $1 billion to add Cars Land to Disney California Adventure in 2012, according to Anaheim officials.

But the city also has played a role in pushing for some of the developments.

Anaheim bought 7 acres along Anaheim Boulevard about six blocks north of Disneyland and renovated decaying auto repair shops, a used-car lot and a smog check business to pave the way for the Anaheim Brewery and the Packing House food court.

The city also expanded an incentive program that refunds room taxes to developers who build new hotels that are ranked with four stars or higher.

"This is the kind of thing that secures our residents’ and the city’s financial future for the next 20 to 30 years," said Anaheim City Councilwoman Kris Murray. "We are saying, ‘Let’s keep this investment going.’"

Thanks to room taxes and other tourism-related revenue, the city’s latest budget includes a $10 million surplus to help pay for 10 additional police officers, three additional firefighters, a new fire engine and park improvements.

Carl Winston, director of the L. Robert Payne School of Hospitality and Tourism Management at San Diego State University, predicted that Disneyland is only going to grow and draw more visitors.

"They have made some very wise moves to invest their tax dollars to build the tourism infrastructure and let Disneyland be the engine that everyone hooks on to," he said.

To that end, the Anaheim City Council voted in July to ban entertainment taxes on Disneyland and Disney California Adventure for 30 years, with Disney promising to invest at least $1 billion on resort expansions by 2024.

Not all of the city’s bets have paid off.

The city’s $185 million investment in an intermodal transit hub — a whale-shaped building covered in the same advanced plastic material used in the Beijing Olympic aquatic center — has yet to attract a corporate sponsor or advertisers to pay for its annual $3.8 million operating costs.

The Anaheim Regional Transportation Intermodal Center generates only $1.6 million in tenant leases and other revenue, according to city officials. The transit hub, within walking distance of Angel Stadium and the Honda Center, was envisioned as a gateway for commuters and tourists.

Not to be left out, city and tourism officials in neighboring Garden Grove have big hopes for the Great Wolf Lodge, a Wisconsin resort operator that is building its first California all-suite hotel south of Disneyland with help from $47 million in redevelopment funds from the city of Garden Grove.

Great Wolf Lodge Southern California will feature a water park that will be almost all indoors and available only to overnight guests. Most water parks in the West are sprawling outdoor attractions.

The woodsy-themed resort is expected to draw families with children ages 2 to 12 to spend several days in the hotel while visiting Disneyland and other Southern California attractions, said project spokeswoman Susan Storey.

"I think we are going to be that nice complement to everything else around there," she said.


On Anaheim Boulevard, the city upgraded an old Packard car dealership so that Barbara Gerovac and her husband, Greg, could invest $750,000 to open the Anaheim Brewery. Umami Burger moved into the same building.

Since the brewery opened in 2011, business has increased about 20 percent each year, Gerovac said. About a quarter of the brewery’s business comes from sales to Disneyland and the Anaheim Convention Center, she said.

"What we are really seeing is the collective impact of all these businesses," she said.

Across from a small park, the city renovated a Sunkist packing warehouse that had sat empty for 30 years. The renamed Packing House is now home to 24 small businesses, including a juice bar, a sushi restaurant, a pizza place and a soul food joint.

About half of the visitors to the Packing House are locals, the rest tourists, said Grace Chung, a spokeswoman for the Packing House.

Among the tourists recently was Mark Montemayor, a pastor from Florida. He said he was most impressed by the cold-brewed coffee and raspberry truffles at Dark 180 Chocolate.

"I think if we had been there longer, we would have visited a few more times," Montemayor said.



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