Talks over theme park's financing break down
BEIJING — Disney has put the long-delayed expansion of its Hong Kong theme park on ice after talks with the city government on a cash injection collapsed.
Talks between Disney and the park’s majority owner, the Hong Kong government, became bogged down over financing the second phase of the first Disneyland on Chinese soil.
“After two years of Disney investment in creative and design work and extensive negotiations with our partner, the Hong Kong government, we have not yet reached a final agreement to expand HKDL,” Disney said in a statement. “The uncertainty of the outcome requires us to immediately suspend all creative and design work on the project.”
Disney signed a framework deal with the local government in Shanghai to kick off a project there, and said in January it intended to submit a proper plan for the park, which sparked fears that the company’s focus was moving towards the mainland. Visitor numbers at Hong Kong Disneyland, the world’s smallest, failed to reach initial expectations since it opened in 2005 and tourism to the territory has been hit by a slowdown in the number of tourists from the key China market.
Disney has been working frantically to boost the number of attractions at the $3 billion venue.
Disney also said it would fire 30 Hong Kong-based Imagineers that had helped conceptualize and plan the expansion.
Last October, Hong Kong Disneyland moved its hefty commercial loans to its U.S. parent company, as it tried to shore up its finances ahead of a possible expansion deal.