The exuberance of Disney boosters--some 90% of the population, according to one poll--has much to do with the city's otherwise black mood. Unemployment runs at a record-high 5.8%. In his budget address Tsang also announced that GDP fell 5.1% in 1998, while retail sales volume dropped 16.7%; tourism receipts declined 14% last year. The past two years have witnessed bizarre health crises--avian flu, flesh-eating bacteria in local waters--and an embarrassingly clumsy opening for the city's overhyped new airport. In a place that's been battered with so much negative news, it's very important to have some sense that things are turning around, says Peter Hills, director of the Center of Urban Planning and Environmental Management at the University of Hong Kong.
A Disney theme park could bestow much more than a psychological lift. Analysts estimate that reclaiming the land for the complex would generate some $774 million in spending. Building the facilities themselves could add another $645 million, while a surrounding network of hotels, restaurants and shops could drum up $1.3 billion. Credit Suisse First Boston predicts that during an estimated five years of construction the project could contribute 0.3% annually to the territory's GDP growth--and 0.2% after the park opens. Close to 100,000 low-skill jobs could be created, and according to a February report from DBS Securities, a local Disneyland could draw more than 6 million visitors a year. (By comparison, Disney parks in Tokyo and Paris--the only other locations outside the U.S.--drew 17 million and 12 million visitors last year, respectively.) Those customers, says Credit Suisse First Boston, could spend more than $900 million on mouse ears and Mulan dolls--equal to 4% of Hong Kong's total retail sales.
But such visions of a magically rejuvenated kingdom remain little more than fantasy at this point. After a four-day meeting in Orlando, Florida last month, Hong Kong officials only convinced Disney to begin negotiations; relations are still so fragile that authorities--who speak of the American conglomerate as a lover whose dowry they are deciding--have imposed a gag order on the talks. Analysts warn, too, that even a successful deal does not guarantee instant riches for the territory. Property giants Cheung Kong Holdings, HKR International and Sun Hung Kai Properties--who all own land around the Lantau site, a small cove named Penny's Bay--would likely enter into joint-venture agreements with Disney and see revenue only after the facility opens. The government, which reportedly owns most of the land intended for the facility itself, may well offer the parcel to Disney for free as an incentive.
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Given past practice, Disney will no doubt have a hand in that cookie jar as well. After watching outside developers profit from its mammoth complex in Orlando, the company filled its Paris Disneyland with on-site hotels and restaurants. That debacle--the European project is saddled with $2.5 billion in debt, and in 1998 eked out a profit of $40 million--reminded the company to limit its exposure in such mega-projects. In Tokyo, Disney only licenses its name and characters and acts as a consultant to the Oriental Land Company, which built the 80-hectare park in 1983 for $1.4 billion. As in Europe, the Americans take a cut of the park's revenues. They'll do the same when a new aquatic theme park--Tokyo DisneySea, currently being built by Oriental Land for $2.9 billion--is completed in 2001.
Some local leaders wonder just how much Disney will squeeze from a park in Hong Kong. Disney wouldn't have decided to locate in Hong Kong unless the government made them an offer they couldn't refuse, warns one legislator. The Americans, of course, have courted Beijing assiduously: only after Disney's movie division agreed last fall to buy the U.S. distribution rights to two mainland films--one a heavy-handed tearjerker rife with Communist propaganda--did authorities agree to release the animated blockbuster Mulan in China. But Disney chairman Michael Eisner has simultaneously played coy, insisting as recently as last October that the company had no plans to establish another park anywhere in Asia. That same month Australia reportedly rejected a plan to build a Disneyland in Queensland because the company had demanded too many concessions. Hong Kong may not have the same luxury. If Disney had come to Hong Kong three or four years ago and asked for 170 hectares of free land, they would have been met with a pretty frosty reception from the government, says Milliken. But now, the government can't afford but to negotiate.
That weakness has struck perhaps the most sour note amid the huzzahs that greeted Tsang's announcement. Although government negotiators insist they will strike a fair deal, legislators fear they may sign away hundreds of millions of dollars worth of land and infrastructure. Activists complain that the project could erode the territory's already frayed environment, destroying marine habitats off the coast of Lantau and increasing noise and pollution levels on the island. Disney may be environmentally conscious in the U.S., but Tokyo Disneyland still uses styrofoam boxes, says Plato Yip, assistant director of Hong Kong's Friends of the Earth.
Such fears may be as premature as the wild hopes shared by many Hong Kongers. Given the territory's recent experience with high-profile projects, like the airport, which were expected to solve all the city's problems overnight, a note of caution may also be welcome. Disney is important, says the University of Hong Kong's Hills. But you can't have an economy that pins all its hopes on one big project. However cute, even Mickey Mouse can't revive Hong Kong all by himself.
Reported by Hannah Beech and Isabella Ng/Hong Kong, Tim Larimer/Tokyo and Mia Turner/Beijing
Top 10 Reasons Why Disneyland Won't Save Hong Kong
10. Donald is still upset over 1997 massacre of local fowl.
9. Two words: typhoon season
8. Local officials are likely to intervene in Pirates of the Currency Market ride.
7. New mobile phones are too small for those Mickey ears.
6. Just wait until the Little Mermaid gets a whiff of the Fragrant Harbor.
5. The Swiss Family Robinson can't afford to pay the rent on their treehouse.
4. One Country, Seven Dwarfs?
3. Jealous local cartoon character Excreman is likely to raise a, er, stink.
2. After the past couple of years, the last thing anyone in Southeast Asia wants is another rollercoaster.
And the No. 1 reason:
1. Let's see how that mouse fares against Hello Kitty.