The Anaheim GardenWalk, the long-struggling mixed-use retail, hotel and entertainment center in the shadows of Disneyland, is not expected to be fully completed—if ever—until at least the early 2030s.
In February, the Anaheim City Council unanimously voted to extend development timelines for Prospera Hotels and Westgate Resorts’ previously planned hotels.
Both companies told the city that they are dealing with financial and other setbacks that have delayed the original hotel projects at the GardenWalk.
With the new extension, city officials said that Westgate Resorts must begin construction of a 399-unit timeshare or hotel by October 2028 and complete the resort by October 2030.
At the same time, Prospera Hotels and its partner, Clementine Real Estate, working under the name GardenWalk Hotel II, must begin construction of a hotel on the northeast corner of GardenWalk by November 2030 and finish by May 2033.
Economic Reality
The city council’s decision highlights the broader economic challenges commercial real estate developers have faced over the past couple of years.
Even projects in top locations like Anaheim’s Resort District next to Disneyland Resort, which attracts more than 20 million visitors a year, are being slowed by higher borrowing costs, changing construction prices and funding challenges in today’s uncertain market.
“The current tariff wars have caused significant increases in the cost of key construction materials such as steel, aluminum, and other raw materials,” wrote Prospera Hotels’ CEO Ajesh Patel to the city. “These cost escalations have materially affected our construction budgets.”
Patel also cited the current state of construction financing, lack of international tourism and national fiscal and economic policies, as well as the 2024 death of Bill O’Connell Sr., a key hotel owner and developer. O’Connell, who started at Best Western in the early days of Disneyland, spent 50 years in Anaheim’s hospitality industry.
Patel did not return a Business Journal’s request for comment.
Encouraging Developers
City officials told the Business Journal that they understand the current market realities and “urge and encourage” the developers to continue working on the projects.
“We continue to urge and encourage the development,” said Mike Lyster. “We’re not there yet, but the ultimate outcome in a situation where you don’t see a development is that the agreement could be dissolved.”
GardenWalk’s History
Anaheim GardenWalk opened in 2008 as a retail, dining and entertainment center in the heart of Anaheim’s Resort District. STC Management owns the center, having bought it in 2018 for $80 million, and manages its retail operations.
The 20-acre, 430,000-square-foot center at 321 W. Katella Ave. sits between Katella Ave. and Disney Way. Unlike the successful Downtown Disney shopping center, GardenWalk has struggled for years with low foot traffic, empty retail spaces and frequent ownership changes.
The two-story lifestyle center is 96% leased, according to CoStar, with tenants such as the Angry Bird Cafe, House of Blues, Bowlero and an AMC Theatre.
Stalled Projects
Under its original development agreement in 1999, the city envisioned GardenWalk as a mixed-use center that could complement Downtown Disney.
The vision included a 3,200-space parking garage, a lively retail and entertainment area and three hotels with up to 1,266 rooms, including 400 vacation ownership units.
Some parts of the project are finished, such as the 466-room JW Marriott Anaheim Resort, a luxury hotel, by Prospera Hotel and Clementine Real Estate, which opened in 2020.
However, other phases have repeatedly missed construction deadlines.
Westgate was scheduled to begin construction of a 399-unit timeshare above the GardenWalk parking garage last April. Prospera was also supposed to begin construction last fall.
“Despite our current commitment to Hotel No. 2 and our strong belief in its long-term benefit to the Anaheim Resort area, a series of unforeseen challenges have made it impossible for Hotel No. 2 to meet the current deadlines.” Patel wrote. “As such, we will not meet our construction milestones.”
City officials must review the project each year to ensure developers are making real progress.
In both 2023 and 2025, the council found that the remaining hotel projects were not meeting their deadlines, so they decided to reset the schedule.
In letters to the city, Prospera and Westgate explained the reasons for the delays. Westgate officials said they had secured an architect and a hotel brand but had lost a development partner due to factors beyond its control.
“We previously partnered with a developer to make these rooms a reality, securing an architect and hotel flag, and working with the city’s Planning and Building Department, only to have the deal eventually end due to circumstances outside of our control,” wrote Bryon Smith, VP of real estate development at Westgate.
Smith said they are now trying to attract investors or buyers for the approved project, citing that the development agreement provides certainty, which can help attract funding.
City staff said that extending the timelines keeps those approvals in place and avoids a more complicated reapproval process, which could cause even more delays.
The new schedule moves development past the 2028 Summer Olympics, when Southern California is expected to see more tourists. Less than three miles away, the Honda Center will be the site of the indoor volleyball competition.
Despite the delays, Anaheim Mayor Ashleigh Aitken and other city officials said they are confident the projects will eventually move forward, pointing to the long-term strength of the city’s tourism economy.
