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  1. #1

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    Reclaimed land may not be used

    From SCMP:

    Despite the expansion of Hong Kong Disneyland, approved by lawmakers yesterday, 60 hectares of reclaimed land could be left unused until 2029.
    The 5.1 hectare extension will take the park to 27.5 hectares - less than a quarter of the 125.4 hectares set aside for Phase 1 of the park.

    And the theme park operator since 1999 has a 20-year option to buy a further 60 hectares known as Phase 2, with the possibility of extending the option for a further 10 years.

    Corporate governance activist David Webb called for the agreement to be scrapped, saying Disney was never likely to make enough money to be able to exercise the option.

    Legislator Audrey Eu Yuet-mee aired similar views saying it was "almost a crime" to have the land tied up for so long.

    On his website, Mr Webb noted that while Phase 2 was owned by the government, Hong Kong International Theme Parks - the joint venture between the government and The Walt Disney Company that runs the park - has a 20-year option to buy it at the reclamation cost of HK$2.8 billion plus inflation.

    The option can automatically be extended for five years and conditionally for a further five if park attendance is more than 8 million but less than 10 million, meaning it could have priority until 2029.

    "One can only assume, in the absence of published accounts, that the park generates just enough cash to cover its operating expenses but not to finance any expansion," Mr Webb wrote.

    "Given the looming competition from Shanghai Disneyland ... it seems unlikely that Hong Kong Disneyland would ever be able to justify, on financial grounds, exercising the option to purchase and build out Phase 2. So we face the prospect of watching 60 hectares of public land sit empty for 20 years, or be subject to low-rent, short-term projects like golf driving ranges."

    At the Legislative Council's finance committee, Civic Party leader Ms Eu stressed how valuable land was in Hong Kong. "To find land for schools and hospitals is already a painful search."

    Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan said Disneyland still had first right of refusal over the land, but was in the process of discussing whether it could be used for other purposes on a short-term lease.

    Afterwards, Ms Eu said the government still did not seem to know what to do with the land in Phase 2.

    "It's almost a crime to have that land tied up," she said. "So far, it's all just promises up in the air, and the government has not been good at keeping promises."
    Source: Hong Kong News Headlines | Hong Kong's premier newspaper online | SCMP.com

  2. #2

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    Re: Reclaimed land may not be used

    Quote Originally Posted by hkdlfan View Post
    unless the attendance is going to be increased to over 8 million per year or even as high as 10 million per year, it is likely they are going to delay the opening of a 2nd Gate further for x number of years.

    but this is like a vicious circle. if you don't build enough quality attractions, there wouldn't be enough attendance....
    Last edited by HongKongDisneyland; 07-17-2009 at 05:51 AM.

  3. #3

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    Re: Reclaimed land may not be used

    The problem is if you give up the land, you could end up with a situation like Disneyland here in CA. Trying to get land later to expand after it has been developed will cost even more.





  4. #4

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    Re: Reclaimed land may not be used

    Quote Originally Posted by HongKongDisneyland View Post
    but this is like a vicious circle. if you don't build enough quality attractions, there wouldn't be enough attendance....
    Yup...the Catch 22 situation for this troubled resort. The price the resort pays for leaving itself beholden to local politics...and also a legacy of Eisner's budget-park philosophy. They are going to be adding two E-tickets over the next 6 years...and only one of those (Mystic Manor) would be sufficiently new or remarkable to make a significant impact. What they needed was a Western River Expedition instead of the Grizzly Mine Coaster, and some other big ride like Star Tours 2...all within the same 6 year period. Then they would reach the 8 - 10 million figure. With the current expansion plans...I think 8 million would be at the high end of what they might expect to achieve. Even with a park as successful as the original Disneyland when it opened in 1955, Walt had the foresight to add three major attractions by 1959. That's what HKDL needed but didn't get.
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  5. #5

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    Re: Reclaimed land may not be used

    i wish Walt were still alive

  6. #6

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    Re: Reclaimed land may not be used

    Quote Originally Posted by hkdlfan View Post
    i wish Walt were still alive
    If Walt was still alive he would be 107, there wouldn't be a Hong Kong Disneyland (or any international Disneyland, for that matter), and Epcot would be radically different then what it is today. But what do I care? Walt isn't someone to obsess over...

    Back on topic, I'm assuming that because of this, HKDL is going to be something that Disney would later regret building...or at least building during the Eisner era.
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    Re: Reclaimed land may not be used

    I'm not so sure they do regret it. After all, they're about to shoot themselves in the foot again with Shanghai Disneyland.

  8. #8

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    Re: Reclaimed land may not be used

    Land is at a premium in Hong Kong and we simply cannot afford to wait 20 years to then decide what to do with it. We have had some major delays on the development of the Western Cultural District, former Kai Tai Airport and the new HK govt offices. We don't want any more delays. If HKDL is not going to make use of the land in the next 20 years, then somebody will, they probably will turn a better profit, too.

  9. #9

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    Re: Reclaimed land may not be used

    Quote Originally Posted by simmer View Post
    If there wouldn't be a Hong Kong Disneyland (or any international Disneyland, for that matter).
    Disagree with that...Walt was a businessman...and just as he didn't mind building a second resort in the USA...IMO he wouldn't have hesitated to go international when the time was right. But he did care that the company which bore his name be associated with a certain high standard of quality, and wouldn't have built any budget parks.

    Back on topic...HKDL should stop worrying about a second gate. The original DL did well enough by itself for 36 years. There is so much potential with the existing park, that has not been realised so far, and won't be realised with these somewhat ho-hum new proposals.
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  10. #10

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    Re: Reclaimed land may not be used

    Quote Originally Posted by tasman View Post
    Disagree with that...Walt was a businessman...and just as he didn't mind building a second resort in the USA...IMO he wouldn't have hesitated to go international when the time was right. But he did care that the company which bore his name be associated with a certain high standard of quality, and wouldn't have built any budget parks.
    I'm sorry, I was still under the impression that he didn't want a "sequel of disneyland". I tend to get my info about Walt mixed up.
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  11. #11

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    Re: Reclaimed land may not be used

    Quote Originally Posted by simmer View Post
    I'm sorry, I was still under the impression that he didn't want a "sequel of disneyland". Walt mixed up.
    He didn't want many things. He didn't want his company to go public. He didn't want to use the xerox transfer process first used in 101 Dalmations. For all we know he might not even have wanted a Magic Kingdom park at WDW...preferring to focus on EPCOT. But nonetheless he was savvy enough to find a balance between idealism and financial prudence.
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  12. #12

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    Re: Reclaimed land may not be used

    Yes, Walt often had to compromise his vision and give in to what the public, or shareholders wanted. I think he only tossed the Magic Kingdom into WDW as a bone to get people to come. It was obvious he wasn't focused on that aspect, he was more concerned with EPCOT.

    He also was famous for saying "You can't follow pigs with pigs" referring to the success of The Three Little Pigs and the public's cry for sequels, which he didn't want. Of course, what did he end up doing? Making 2 sequels to that famous cartoon short. So, even he gave in sometimes. It's always hard to predict what he might do if he were alive, so it's probably best to just not do it.

  13. #13

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    Re: Reclaimed land may not be used

    As for HKDL's reclaimed land...this is why it's such a bad idea to get a government to partner with you. There are so many different views, and obviously it's hard to get people to agree. It's one thing when you're the sole owner, you can do pretty much what you like. However, as we've seen with the negotiations with HK, it just gets so complicated to do something simple.

    Here it's also hard because I'm sure the government is just interested in making a profit, they don't care about Disney's best interest, and why should they? If there is money to be made from the reclaimed land, they obviously have the right to try to do something about it, despite it not being in Disney's favor.

    I'm sure Shanghai will be just as much of a red-tape nightmare...only much larger!

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    Re: Reclaimed land may not be used

    Quote Originally Posted by gurgi View Post
    As for HKDL's reclaimed land...this is why it's such a bad idea to get a government to partner with you. There are so many different views, and obviously it's hard to get people to agree. It's one thing when you're the sole owner, you can do pretty much what you like. However, as we've seen with the negotiations with HK, it just gets so complicated to do something simple.

    Here it's also hard because I'm sure the government is just interested in making a profit, they don't care about Disney's best interest, and why should they? If there is money to be made from the reclaimed land, they obviously have the right to try to do something about it, despite it not being in Disney's favor.

    I'm sure Shanghai will be just as much of a red-tape nightmare...only much larger!
    Several senior HK gov officials have already indicated that either they will sell off their shares in HKDL resort either to 3rd party or recoup their initial investment by an IPO (Initial Public Offering) of its HKDL assets in Hong Kong on the HKSE (Hong Kong Stock Exchange) in the future.
    They will let Disney be the major stake holder and HKDL resort be run by a pure commercial entity rather than a joint government-private ownership. but off course it will be some years away when attendance has picked up.
    Last edited by HongKongDisneyland; 07-22-2009 at 12:55 AM.

  15. #15

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    Re: Reclaimed land may not be used

    Quote Originally Posted by gurgi View Post
    Yes, Walt often had to compromise his vision and give in to what the public, or shareholders wanted. I think he only tossed the Magic Kingdom into WDW as a bone to get people to come. It was obvious he wasn't focused on that aspect, he was more concerned with EPCOT.
    From what I've heard over the years, this is exactly right. Lure them in with a MK style park in Florida, then put the real focus on EPCOT Center.

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