As Anaheim Gets Redevelopment Boost, Long Beach Sees Delays
2000 was a watershed year for Anaheim and Long Beach.
During the late 1990s, Anaheim struggled to attract more visitors during the city’s massive remake. Meanwhile, Long Beach, with a revitalized downtown and harbor, was the Southland’s redevelopment darling.
Bolstered by a strong economy, aggressive marketing and new downtown restaurants and entertainment venues, visitors flocked to Long Beach, which saw its hotel occupancy grow from 48% in 1993 to 71% in 1999.
At the same time, Anaheim had a tough time bringing people to a city where construction of everything from roads to Walt Disney Co.’s new theme park held center stage for three years. Anaheim’s hotel occupancy, at 67% in 1993, rose only to 69% in 1999.
Starting last year, though, the picture changed.
“In tourism, people are always looking at what’s new, and that’s (now) Anaheim,” said Jack Kyser, chief economist for the Los Angeles Economic Development Council. “Long Beach will probably struggle more to attract visitors this year.”
Anaheim,which once verged on losing Disney’s expansion to Long Beach,is a city whose star is shining, while Long Beach has lost some of its luster in the face of financial setbacks and lawsuits that have delayed the completion of its waterfront redevelopment and neighboring projects.
Anaheim reached the light at the end of its construction tunnel with the completion of a $4 billion renovation, becoming the Southland’s poster child for public-private redevelopment projects. And with the end of detours, noise and dust, the city’s hotel occupancy jumped to 73% at the end of 2000, on par with that of Long Beach.
The Anaheim Convention Center now is one of the 10 largest in the nation and the second-largest in the West after Las Vegas. And the convention business is booming, with 1.1 million attendees projected for this year. The last time Anaheim exceeded the 1 million mark was in 1994.
New and remodeled hotels such as the Grand Californian, Extended Stay America, Anabella Resort and Portofino Inn & Suites have popped up, with several more scheduled to open this year. Disney’s California Adventure, though not drawing overflow crowds in its early weeks, is garnering positive reviews. Downtown Disney, a retail and entertainment district, is jumping. Officials at some of the city’s larger hotels say their rooms are full.
The new resort area “ensures the economic viability of the city,” Anaheim assistant city manager Tom Wood told attendees at a recent tourism conference.
And Anaheim,with its own utility company,has at least a slight edge over Long Beach and other rivals in the ongoing struggle for electric power.
In Long Beach, the $100 million Queensway Bay retail and entertainment development ran into trouble last year when prospective anchor, Newport Beach-based Edwards Theatres Circuit Inc., dropped out of the picture after filing for bankruptcy protection. Because other leases were contingent on a movie theater, the Edwards move left Beachwood, Ohio-based Developers Diversified Realty Corp.,the project’s developer,in a bind for tenants.
After earlier threatening to fire Developers Diversified, last month the Long Beach City Council granted the developer a 15-month extension to complete the project, with the opening now expected around mid-2002.
The project also generated talk of an audit of the city’s tidelands management by the state Lands Commission, headed by Los Angeles mayoral candidate and state Controller Kathleen Connell. And residents, in response to a recent request for comments on Queensway Bay, have roundly criticized Developers Diversified’s reliance on theaters and restaurants, with some calling it a “very expensive and risky venture.”
Meanwhile, the proposed 1,000-foot-long Carnival Cruise Line dock that would move the line’s operations from the Port of Los Angeles to Long Beach hit a snag when the Surfrider Foundation filed environmental challenges to the project. If the cruise line’s plans go forward, the cruise ships would bring about 500,000 annual passengers to Long Beach.
Delays on the waterfront have created uncertainty for proposed hotels in the area. Though downtown Long Beach boasts 5,000 hotel rooms within walking distance of its convention center, plans for six more hotels had been announced for the area. Only one,a $30 million, 176-room boutique D’Orsay hotel,had secured financing, but that backing recently was withdrawn. Another $50 million, 430-room hotel proposed for the corner of Pine Avenue and Ocean Boulevard is reportedly on hold.
And the $100 million-plus Aquarium of the Pacific, which drew 1.1 million visitors last year, has struggled, at least in part because of the delays. Aquarium of the Pacific chief operating officer Tammie Brailsford said last year’s attendance was “just ahead of projections” and said it is “on track” for 1.5 million visitors this year.
To counteract financial problems, the aquarium is working to increase attendance, conducting a fundraising campaign, seeking sponsorships and refinancing its debt to take advantage of lowered interest rates.
“Queensway Bay will be a great partnership when it happens (but) we never built it into our projections,” Brailsford said.
Politics, too, have beleaguered the city. At the Long Beach Convention Center there have been tussles over whether the city or convention center operator Spectator Management should keep the tips from banquets (neither side is apparently willing to let the servers keep them). And a dispute between the city and visitors bureau over whether the bureau overestimated hotel bookings is now being reviewed by the Los Angeles District Attorney’s Office. Last month, five employees of the Visitors Bureau hired an employment law attorney, though the reasons for the action were unclear.
But Long Beach is far from throwing in the towel.
Its convention business still is brisk, boosting the city’s hotel occupancy to 74% at year’s end. And Pine Avenue, the heart of the city’s downtown, is hot. Meeting planners say they like the variety of activities within walking distance of the convention center. Convention & Visitors Bureau officials say they are in “aggressive pursuit of the corporate market.”
“We compete with others on meetings,” President Linda Howell DiMario recently told an industry group, “but it’s healthy competition.”
The city also has turned more attention to the sports market, where it has made a pitch for the 2004 U.S. Olympic Team Trials for Swimming.
But the weakening economy and California’s ongoing power woes have dulled earlier, somewhat euphoric predictions for the region.
“I’m more cautious now in my projections (for 2001),” Kyser said. “Some of the bloom is off the tourism rose.”
A recent survey by the Travel Industry Association, a tourism trade group, projected less tourism growth on the West Coast than for other parts of the U.S. this year. Kyser said at least some of that weakness can be traced to a fear of power outages. And he pointed to California’s heavy reliance on intrastate travel as worrisome for Southern California, given job cuts by big technology companies such as Cisco Systems Inc. and Hewlett Packard Co., as well as the demise of dot-coms.
“Those folks might not be as likely to go on vacation,” Kyser said. n
