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Hong Kong Disneyland 2nd Gate Not Happening

gavin

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Not a big shock since the Hong Kong Government have been telling Disney for years that they need to s**t or get off the pot with regards to the plot of land reserved for the second gate, but they've made a decision not to renew Disney's option on the land.

I'll copy and paste a bits from a couple of local news articles below, but, basically, Disney have been allowed for years to "hold" the land without buying it (leaving it vacant) in order to use it for a second gate. Rather than commit to anything, they've been pushing back the deadlines of when they'll actually do something with the land, and the government have decided not to let them do that anymore. Part of the land is currently being used as quarantine facilities, and that seems set to be expanded for the short-term future. Long-term, they've actually got very limited options since they signed an agreement with Disney that whatever happens with the land, it can't be used for housing, hotels, retail etc., and has to not encroach on the aesthetics of the area.

I'm kind of hoping that this might give Disney a kick up the arse, but whether they'll be willing to part with US$361 million in the current climate seems doubtful, and it sounds like it might already be too late.

Hong Kong Disneyland’s option to purchase a potential expansion site next to the park will not be extended, with government sources saying the land is to be used as a

Covid-19 quarantine facility for at least a few years before a long-term purpose is determined.


While the Walt Disney Company said it was “extremely disappointed” in the decision, sources said the company had been unable to commit to using the site in the near future. The option was due to expire on Thursday.

The 60-hectare plot in Penny’s Bay on Lantau Island – the size of three Victoria Parks – was at one point eyed as a space where tens of thousands of temporary homes could be built for those on the waiting list for public housing.

Disney has lost out on exclusive rights to develop a parcel of land adjacent to the existing park
Citing current economic conditions, the government on Wednesday announced it had decided not to extend an option that would have allowed Hongkong International Theme Parks Limited (HKITP), a joint venture between itself and Disney, to purchase the site next to it.


“The government considers it prudent for HKITP to focus on the development and expansion of the existing resort in the coming few years, rather than geographic expansion into a [new] site,” a spokesman for the Commerce and Economic Development Bureau said in a statement.

A government source said there was no concrete plan for the land’s use yet.

Another source familiar with the decision said discussions had been ongoing between the government and Disneyland for almost a year, with the park failing to give a concrete answer as to whether it would proceed with expansion on the site any time soon.

“As we understand, Disneyland did not want to take the risk, but at the same time, it did not want to give up the privilege of buying this piece of land, so after consideration, the government decided not to extend the offer, which could have stretched for another five years,” the source said.

“The government has not decided yet, but for now it will be used for quarantine facilities for a few years. Any options could be considered, except for the building of high-rise residential buildings.”

The expiry of the deal means the park will remain the smallest Disneyland in the world for the foreseeable future.

In a statement, the theme park giant said: “Over the past 15 years, the Walt Disney Company has stayed the course on its commitment to investment in Hong Kong Disneyland Resort and the economic growth of tourism in Hong Kong, and will continue investing in the current expansion plan.

“However, we are extremely disappointed with the Hong Kong government’s decision not to extend the phase 2 land expansion option.”
The Penny’s Bay area, which is about half the size of the current Disneyland, has sat idle for years.

Under a deed signed two decades ago, the site was to be reserved for HKITP to purchase when it was ready for a phase two expansion. It would be sold at a premium fixed at HK$2.8 billion (US$361 million) – adjusted for inflation – with hopes a second park would be built.

The purchase option was to lapse after 20 years if it had not been exercised or renewed, though the government had the option of allowing HKITP to take two five-year extensions.
But the government ultimately decided not to extend that offer, according to a source, who said expansion plans within the current theme park would be unaffected.

Its attendance figures have risen and fallen over the past half decade, with 6.8 million visitors in financial year 2015, 6.1 million in 2016, 6.2 million in 2017, 6.7 million in 2018 and 6.5 million in 2019.

In January, with the option less than a year from expiring, the government said it was unable to use the area for temporary housing purposes, as its existing contract with Disney required any development to be compatible with the theme park.

Secretary for Transport and Housing Frank Chan Fan nevertheless urged Disneyland at the time to “consider its social responsibility” and give up the site.

But as the city faced a third wave of coronavirus cases, a temporary quarantine centre was constructed there in a bid to relieve pressure on overcrowded hospitals. A four-hectare site on the location has been running since July with 800 beds, a number expected to rise to 3,500 by the end of this year.

In an interview with the Post in May, health minister Professor Sophia Chan Siu-chee said that temporary quarantine facilities built on the site could become permanent.
Andrew Wan Siu-kin, a Democractic Party lawmaker who has long advocated using the site for housing, on Wednesday described the government's decision as a “late awakening” given the park’s lagging performance.

“I roughly estimated the piece of land could offer 20,000 to 40,000 units to meet the urgent housing demand in Hong Kong,” he said. “The government does not have any more excuses not to use the land for housing development.”


Tourism sector lawmaker Yiu Si-wing, meanwhile, said he did not think the theme park would have been able to use the land in the next five years given the challenges it has faced recently, despite the city's arrival figures hitting a record high of 65.1 million in 2018.

“It’s pragmatic for the government to make this move,” he said.

Yiu brushed off worries that the government’s decision would affect the appeal of Hong Kong as a tourist destination, noting the city had many other drawing cards.
“It’s better than just relying on one or two attractions,” he said.

The deed of restrictive covenant ensures the fairytale world remains visually distinct from its surroundings and that the landscape is aesthetically compatible with the attraction. The unused plot cannot be used for residential purposes, commercial facilities, hotels, other entertainment venues or theme parks. Any buildings erected must be less than 20 metres tall and only low-intensity use is permitted.

Despite the limitations, a range of facilities could still be constructed, including a park, an indoor aquarium, an arena, live theatres, government offices, restaurants or an exhibition centre, to name a few.

But ideas such as moving Ocean Park there, as previously suggested by tourism lawmaker Yiu Siu-wing, or creating residential developments as the Democratic Party earlier put forward, are not feasible under the current arrangement.

SCMP Article 1
SCMP Article 2

F**king gutting.
 

Peet

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That's going to leave the resort looking kind of lop sided as you can easily tell it's laid out to have another gate opposite the first one.
 

spicy

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Seeing as the government own 52% of the resort, aren’t they just shooting themselves in the foot here whilst pissing Disney right off in the process.

Surely there must be another parcel of land somewhere for the government to develop before this spot would even need to be considered.

As has been said it could just be an attempt to kick Disney up the arse into building the second gate but it’s hardly the time to be doing that right now.
 

cookie

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Yeah, neither Disney nor any other entity is going to throw what's going to amount to billions at a second gate anytime soon.

I get that this stuff can't be set aside forever (read that Disneyland Paris has until 2036 to submit detailed plans for a third gate or they'll lose the land earmarked for it), but not sure why this is being done now.
 
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Pokemaniac

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It's understandable that Hong Kong wants their land back if Disney isn't going to use it, but from an enthusiast perspective, it's a bit of a shame.

Four of the six Disney resorts currently have more than one gate. In every case, the first gate is the "Magic Kingdom"-style park with a main street, a castle, and the various lands lined up like petals in a flower. More or less. The second gate, in most instances, has been ... kind of spotty, by Disney standards. In Orlando, there are four parks, while the first and second are Magic Kingdom and Epcot, but the third one was Disney's Hollywood Studios, a park it didn't seem like they had any good idea for beyond "Universal is expanding to Florida and we need to challenge their market niche, so here's a movie studio-themed park as quickly and cheaply as possible". The lack of coherent planning has been patched up ever since. In California, the decision to build another gate was made in the wake of losing billions on EuroDisney, resulting in another park build quickly and planned poorly. I mean, a California-themed park in California? In Paris, they ran into another "use it or lose it" situation and had to hammer out a second gate quickly and cheaply again. Hence another Studios park they've been patching up since.

The obvious exception is Tokyo DisneySea, where the deep pockets of the Oriental Land Company secured enough funding for the Imagineers to do their craft, and the result is a beautiful and coherent park. But DisneySea stands alone. It's not that Disney hasn't been willing to spend big money on their parks, but every time they've done so recently it has either been to build a new land in an existing park ("patching up" their penny-pinching misadventures of the 90's and 2000s), or a new Magic Kingdom-style park entirely (Shanghai). Tokyo DisneySea, and to some extent Animal Kingdom, stands as the only modern example of Disney building a big, expensive, new park from the ground up without adhering to the Magic Kingdom formula or cheaping out with a Studios-style park. It's sad to see we won't get another chance in Hong Kong, as it and Shanghai really were the best candidates we'd be likely to get for many years.
 

gavin

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That's going to leave the resort looking kind of lop sided as you can easily tell it's laid out to have another gate opposite the first one.

Very much so. The whole area has very clearly been designed with a second gate on the other side of the pathway, with the entrance directly opposite the 1st park, using the fountain as the central hub.

Seeing as the government own 52% of the resort, aren’t they just shooting themselves in the foot here whilst pissing Disney right off in the process.

Surely there must be another parcel of land somewhere for the government to develop before this spot would even need to be considered.

As has been said it could just be an attempt to kick Disney up the arse into building the second gate but it’s hardly the time to be doing that right now.

It's a specific government department which was set up specifically as part owner of Disney, so while it's absolutely government-owned, there are other departments doing constant battle with it in regards to pissing away more money.

There is land elsewhere, with more being created and a whole, enormous new district in the early stages of development. The government are under constant pressure (which they ignore) to build a lot more affordable public housing, but they prefer to release land in small parcels to the highest bidder, who then build luxury apartments, hotels and shopping malls on it. They can't use the Disneyland land for housing or any other development of any note so reclaiming it is practically useless. The cynic in me is saying that they've done it to shut a bunch of people up; there have been politicians screaming for years about that land.

Yeah, neither Disney nor any other entity is going to throw what's going to amount to billions at a second gate anytime soon.

I get that this stuff can't be set aside forever (read that Disneyland Paris has until 2036 to submit detailed plans for a third gate or they'll lose the land earmarked for it), but not sure why this is being done now.

The renewal for another 5-year hold on the land just came up last week. It was either refuse it, or allow it to sit there empty for another five years.

Looking at Google Maps, there is so little space to expand the first park. This must put massive limitations on HKDL's long-term development.

There's enough land with the current boundaries of the park for a small land between Toy Story Land and the new Frozen area (or an expansion of Toy Story Land I guess) and a decent-sized land to the north east of Grizzly Gulch (rumoured to originally have been a Pirates of the Caribbean area before Shanghai got there instead). Seeing as they've barely started opening up stuff from the newest expansion (Antman last year, the new castle this year, Frozen next year, new Avengers ride in Tomorrowland in 2023/2024), I reckon it could be a good ten years before those two areas get used. I don't know how feasible it would be to use it as a park expansion, but there's also a large plot of land that is/was earmarked for a 4th hotel. I have no idea if that's still on the cards. As far as properly long-term though, they really do need that other plot of land.

It's not that Disney hasn't been willing to spend big money on their parks, but every time they've done so recently it has either been to build a new land in an existing park ("patching up" their penny-pinching misadventures of the 90's and 2000s), or a new Magic Kingdom-style park entirely (Shanghai). Tokyo DisneySea, and to some extent Animal Kingdom, stands as the only modern example of Disney building a big, expensive, new park from the ground up without adhering to the Magic Kingdom formula or cheaping out with a Studios-style park. It's sad to see we won't get another chance in Hong Kong, as it and Shanghai really were the best candidates we'd be likely to get for many years.

And the penny-pinching of the '90s and '00s is exactly why Hong Kong Disney has been playing catch up for so many years and why it's still seen by many (wrongly now, and usually by people referencing what it was like when it first opened) as the "half-day park with nothing to do". It's like they realised they got shafted and have made efforts to install original and high-quality stuff ever since. The situation is probably most similar to California Adventure. If the money would have spent in the first place they likely wouldn't be in this situation now of having to throw billions at it. Another problem with HKDL is that, unlike most of the other resorts, it's not really a huge draw in itself for international visitors, especially outside Southern China. It relies on Hong Kong itself being a massively popular tourist destination. If it had been built "properly" to begin with, it might have been seen as a destination park rather than as "something to do" for people who come here anyway.
 
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Pokemaniac

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And the penny-pinching of the '90s and '00s is exactly why Hong Kong Disney has been playing catch up for so many years and why it's still seen by many (wrongly now, and usually by people referencing what it was like when it first opened) as the "half-day park with nothing to do". It's like they realised they got shafted and have made efforts to install original and high-quality stuff ever since. The situation is probably most similar to California Adventure. If the money would have spent in the first place they likely wouldn't be in this situation now of having to throw billions at it. Another problem with HKDL is that, unlike most of the other resorts, it's not really a huge draw in itself for international visitors, especially outside Southern China. It relies on Hong Kong itself being a massively popular tourist destination. If it had been built "properly" to begin with, it might have been seen as a destination park rather than as "something to do" for people who come here anyway.
I guess this could be why they didn't want to commit to using the land at the moment - they've learned that building a proper park takes a massive amount of money and effort they can't really afford right now, or otherwise they'd just sink hundreds of millions of millions of dollar into something that would be passable at best, but not really add anything to the resort while also requiring massive investments in the future. Anything they do with the land now would also set the premise for its future development - soiling the canvas, as it were. You can't really move the main street or the Tower of Terror once it's set up, so any future plans would have to be built around their position. Might as well keep the canvas clean until they can do something proper with it, even if it means not doing anything for many years to come.

Still, it's a bit sad. Of the 12 Disney parks, all but DisneySea, Epcot, and (arguably) Animal Kingdom fall into two categories: half-baked half-day parks built on the cheap in the 1990s and fixed-up patch by patch since then, and Magic Kingdom parks. Historically, they have had both the money and the creativity to do something great and different, but for various reasons that hasn't happened so far. And now it won't happen in Hong Kong either. At least there's reasonable hope for Shanghai.
 
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