THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, September 30, 1994 TAG: 9409300536
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY ALEC KLEIN AND MARGARET EDDS, STAFF WRITERS
DATELINE: RICHMOND LENGTH: Long : 111 lines
Relentless opposition forced the Walt Disney Co. to abandon a proposed history theme park in Haymarket, but sources said Thursday there was more to it: a multinational corporation preoccupied with high-level shake-ups, billion-dollar expansion plans and image.
Disney officials insisted they were committed to finding another site in Virginia, despite instant courting from Maryland, North Carolina and West Virginia and spontaneous outcry from Virginia lawmakers, who said they had been betrayed in approving $163 million in subsidies for Disney's $650 million project.
``The governor went to the wall for them, as did a lot of the legislators here, and they blew up the wall in a very explosive manner,'' said Del. Vincent F. Callahan Jr., R-McLean, in a floor speech in the House of Delegates. ``I was disgusted by the way Disney acted. . . . I say good riddance.''
Gov. George F. Allen, who had embraced Disney as an economic boon to Virginia, learned of the withdrawal in a hastily arranged meeting with two executives Wednesday night at the Capitol. Subdued, he blamed it on ``so much negative blasting, primarily from people outside of Virginia.''
But those familiar with the unsettled climate at Disney say other factors were at play.
``A series of things had happened in the corporation,'' said a principal player in negotiations between Disney and state officials. Disney Chairman Michael Eisner ``felt the Disney name is a sacred thing, and it was just getting beat around.''
Recently, Eisner had undergone quadruple-bypass heart surgery and faced questions about letting go the company's golden boy - Jeffrey Katzenberg, chairman of Walt Disney Studios - in a power struggle. Meanwhile, the company was reportedly bidding to acquire NBC, a network valued at between $4 billion and $6 billion.
Against this backdrop, the Virginia project, situated in the heart of Civil War sites, increasingly became a hornet's nest of lawsuits, anti-Disney marches and bad press.
``They need no more enemies,'' a former Disney producer said. ``They can't afford corporate sue-me's.'' Eisner had been under pressure from within the company to stop the public relations bloodletting and to marshall forces to buy NBC, the former executive said.
Disney officials denied there are any connections between the Virginia pullback and problems at their Burbank, Calif., headquarters. ``Totally unrelated,'' said John Dreyer, Disney's vice president of corporate communications. He dismissed the connections as the creation of ``somebody who can barely read a balance sheet.''
``Our first choice is to find a location in Virginia,'' Dreyer said. As a show of good faith, Disney gave the president of the Disney Channel the additional title of chairman of Disney's America in Virginia.
Even with this action, however, Virginia officials were stunned and concerned that they were about to lose a project that could generate thousands of jobs and nearly $2 billion in tax revenue over 30 years.
They were especially surprised because the withdrawal came just as Disney had all but sealed county and regional approval for the plan. Even more, by withdrawing from the site 35 miles west of Washington, Disney automatically lost the hard-won state subsidies approved for the Haymarket site last winter.
``We were just absolutely shocked,'' said Robert T. Skunda, state secretary of commerce and trade. While he was pleased with Disney's reassurances, ``I obviously take it with a grain of salt,'' Skunda said.
State officials said they do not intend to get involved in the land search and will wait for Disney to make the next move.
Communities across Virginia deluged the Capitol with calls Thursday offering sites for the park. Speculation has centered on Front Royal, land near Dulles International Airport and even as far south as New Kent County, south of Richmond.
Disney officials said they have yet to begin a site search, but they told state officials they were considering scaling back the size of the project to 200 to 400 acres, the amount needed for just the theme park.
In its original plans, Disney wanted 3,000 acres to build as many as 2,281 homes, 1,340 hotel rooms and 1.96 million square feet of retail and commercial space in addition to the theme park.
A revamped park plan is expected to face a chilly reception if Disney returns to the General Assembly for financial help.
``Promises were made that they'd stay, come hell or high water,'' said state Sen. Joseph Benedetti, R-Richmond. ``Whatever they do is going to have to be written in blood next time.''
``I think they broke faith with us,'' said state Sen. Charles Colgan, who represents Prince William County and led the Disney bandwagon. Colgan said a Disney official called him about the withdrawal 30 minutes after he saw the news on television. ``I felt after I talked with him that they really weren't serious about continuing. . . . I got the distinct impression, just a feeling, it's over,'' Colgan said.
Others are less certain, but more than 60 opposition groups, including historians, environmentalists and property owners, hailed Disney's departure from the bucolic setting near the Manassas National Battlefield.
The day before Disney relented, one of the leading opponents had forced the state to hand over several thousand pages of documents related to the project.
``I think there's stuff in the documents that indicates the (Allen) administration was withholding lots of information from the General Assembly and the public'' about the plan's cost and impact on traffic, said Robert T. Dennis, president of the Piedmont Environmental Council, which spent more than $1 million to fend off Disney.
``It's not totally over,'' he said. ``The PEC will be trying to make sure that something like this will never happen again.'' MEMO: Related stories on page A2.
ILLUSTRATION: Color drawing
Mickey Mouse
KEYWORDS: DISNEY AMERICA WALT DISNEY CO. by CNB