They're coming for you, Mickey. Motley Fool Stock Advisor pick Disney (NYSE:DIS) announced a pair of Walt Disney World expansion projects that will find the family entertainment giant milking a little more out of its land by turning to third-party developers.
Four Seasons (NYSE:FS) will build a hotel and a championship golf course where Disney presently operates a pair of golf courses. The hotel should open in 2010, at the northeast edge of the Disney resort. On the other side of the resort, Disney has plans to bring outside developers to build a massive lodging and entertainment complex. It will feature 4,500 timeshare and hotel units, along with 300,000 to 500,000 square feet devoted to a retail and entertainment district. In other words, that would be enough room to house another Downtown Disney West Side with a smallish Pleasure Island to spare.
Disney knows it doesn't need 43 square miles in Florida to realize all its homegrown dreams. It sold off a 47-acre tract just north of its property last year to residential real estate developer Centex (NYSE:CTX). A slightly larger parcel just south of the resort went to a developer bent on building vacation homes and condos. Plot all four moves on a map and you've got Disney freeing up real estate on all four sides.
As someone who owns a vacation villa just west of Disney World, I welcome the development. I'll miss the five-minute back-road drive to the Animal Kingdom parking lot, but I've always wondered why Disney neglected the west side of its property. This changes that.
The move may seem ironic. Disney announced "blue sky" concepts last month that would find the Mickey Mouse company potentially operating urban entertainment centers, stand-alone attractions, and themed resorts in major markets all over the world. And here we find Disney -- in its own backyard -- handing over the keys to third-party dreamers.
Hypocrisy? Retreat? Neither, really. It's the right financial move. Let developers bear the brunt of capital outlays for projects that will only enrich Disney by bringing a wider pool of tourists to its doorstep.
Four Seasons is a classy partner that will bring an entirely different clientele on site. The timeshare developers on the west? Don't cringe. Disney has joined other upscale hoteliers like Hilton (NYSE:HLT) and Marriott (NYSE:MAR) to upgrade and legitimize the vacation interval business.
Disney's It's a Small World attraction doesn't exactly have it right when it comes to Disney World. It's a pretty big world. And as it turns out, there is apparently enough to go around.
A look at some other recent theme park development deals:
- Disney did sell off some land last year.
- There's a new Nickelodeon theme park coming to Minnesota.
- The Wiggles and Thomas the Tank Engine are coming to Six Flags.
Disney is an active recommendation for Motley Fool Stock Advisor newsletter service subscribers.
Longtime Fool contributor Rick Munarriz enjoys taking his family to amusement parks of all sizes, all over the country. If they build it, he'll find a way to get there. He owns shares in Disney, and his nearby townhouse is at Villas at Island Club. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
