Hong Kong Finance Secretary John Tsang, left, and Walt Disney Parks & Resorts chairman Jay Rasulo pal it up for the camerasWord emerged late last week that officials from the Hong Kong government would be visiting the Disney lot in Burbank on Friday for more negotiations concerning Hong Kong Disneyland’s long-delayed expansion plans. Apparently the meeting went well – well enough for the Hong Kong goverment to post an announcement on their website trumpeting the “substantial progress” made during negotiations. They also issued a press release to that effect. Rita Lau, the Secretary for Commerce & Economic Development, chimed in as well; Lau said, “As far as I know, there were breakthroughs on a number of important issues. I am sure there will be solid plans very soon.”
After recent rumors that the design concepts for the expansion had been approved, all that remained was the slight sticking point of who would pay for them. At issue was control of the park; Disney, realizing how under-built the park is, has long sought to inject capital into the resort to fund expansion. The Hong Kong government, however, is the majority shareholder in the park and did not want to surrender that controlling interest.
Negotiations have dragged on for years, stalemating recently when Disney laid off the Imagineering staff they had assigned to design the expansion. The situation seems near a resolution, however, according to the Hong Kong Financial Secretary, John Tsang. After Friday’s meeting in Burbank, Tsang released a statement saying, “I am happy to note that substantial progress has been made in the negotiations. Whilst a number of issues remain to be sorted out, both sides are committed to bringing the discussions to a successful conclusion in the near future.”
Dow Jones has also reported that a deal is at hand; the current proposal calls for Disney to finance the expansion, while the Hong Kong government will keep their controlling stake in the venture by converting earlier loans to the project into equity. The Hong Kong Economic Times has reported that a likely option would see Disney investing HK$7 billion (roughly $900 million) in the park, reducing the government’s stake from 54% to 51%. Construction would begin as soon as the agreement was signed.
So, yay.
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