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Correction to This Article
The article incorrectly said that the project's distance from the District is eight miles. National Harbor is about a mile from the District line.
Disney Buys Land for Future Resort Hotel at National Harbor

By Thomas Heath
Washington Post Staff Writer
Tuesday, May 19, 2009

Walt Disney Co. has bought a 15-acre parcel at Prince George's County's sprawling National Harbor development, a shot in the arm for a project that opened with big ambitions a year ago, only to run headfirst into one of the sharpest economic declines in decades.

Disney plans to build a 500-room hotel resort on the parcel, providing another anchor for a 300-acre venture that seeks to rival the District as a conference and convention destination. National Harbor already includes six hotels; more than a dozen restaurants; and a giant conference center run by Gaylord Entertainment, owner of the Grand Ole Opry in Nashville.

Business, though, has been slowed by the recession, and many of the 400 residences at National Harbor have not been sold. A Disney spokesman said the company will almost certainly go ahead with the project despite the economic climate, but the company did not provide a timetable.

"The addition of Disney as a partner to the National Harbor mix validates and fulfills the shared vision that we will be a world-class waterfront destination resort," said Milton V. Peterson, chairman of Peterson Cos., who has staked hundreds of millions of dollars on the harbor venture. "It's an extraordinary compliment in this economy."

Disney's move to Prince George's comes more than a decade after the company pulled out of a project to build a history-themed park, called Disney's America, on 3,000 acres of rolling farmland near the Manassas battlefield. Disney scrapped the project after months of opposition from politicians and citizens' groups

Peterson has been wooing Disney in the years since then. He even hosted Walt Disney president and chief executive Robert A. Iger on a visit to the site.

"I have been working on this Disney project with Milt for four years," said Prince George's County Executive Jack B. Johnson (D). "Milt has been working on it for 10. There were times when it looked like it wouldn't happen, but the perseverance paid off."

Tourism brings nearly $10 billion annually to the Washington region, though summer convention bookings and hotel reservations in the District are off about 5 percent from last year. District tourism officials projected a 2 percent decline in tourism this year.

With its thousands of hotel rooms and huge public spaces, National Harbor has been a subject of speculation on whether it complements or cannibalizes the Walter E. Washington Convention Center and other conference centers in downtown Washington. Plans for a large new hotel at the convention center, considered a requisite for boosting business there, remain on the drawing board.

But, eight miles south of the District on the Potomac River, National Harbor has been a relatively bright spot, one of the few projects to go forward. It is anchored by the Gaylord National Resort & Convention Center, which spots an 18-story glass hall, 2,000 hotel rooms and 470,000 square feet of meeting space, making it the largest center of its kind on the East Coast.

One hospitality source, who spoke on condition of anonymity because the source is not an official spokesman, said about 60 percent of the convention business at the Gaylord center has been new to the region. The rest is groups that had previously booked events in Washington.

"Yeah, sure, we're in a downturn right now," said Colin Reed, chairman and chief executive of Gaylord Entertainment. "But three years from now, life will be a lot different."

Although Disney is best known for its animated films and theme parks, the entertainment conglomerate also includes ABC, ESPN, live-action films and cruise ships.

Disney's resorts unit is buying the National Harbor parcel for $11 million. The company also has an 800-plus room resort under construction on the island of Oahu in Hawaii. That resort is due to open in 2011; will cost about $800 million; and will include a spa, saltwater snorkeling, a replica volcano and wedding facilities, according to reports.

Disney would not disclose the exact size and construction date for its National Harbor plan, "but it will be a project of significant scale and put a recognizable Disney footprint in the Washington area," said Jay Rasulo, chairman of Walt Disney Parks and Resorts. Rasulo added that the project is not an attempt to build another Disney's America.

"The National Harbor resort is a completely different kind of project," Rasulo said. "It's specifically zoned for hotel, residential and other commercial development. This project is a hotel resort. It is not by any stretch of the imagination a theme-park project and never will be. We have no intention of building a large-scale theme park in the Washington area."

The new project might dovetail with Adventures by Disney, which offers guided tours that include a mid-Atlantic tour through Philadelphia, Williamsburg and Washington. The D.C. leg of the tour includes a guided bike ride around the National Mall and private tours of the Lincoln Memorial, the White House and Arlington National Cemetery, and a lunch trip to Mount Vernon.

"This is what we think about as a fun-filled new destination for local visitors, which can also serve as a base camp from which others can explore the increasingly inspirational stories from our nation's capital," Rasulo said.

The property Disney has bought sits on a rise at the top of a tree-lined promenade named American Way, which is fashioned after the main street in Barcelona, called Las Ramblas. The Disney site overlooks the National Harbor complex and the Potomac and faces north toward the District. Visitors can see the Washington Monument in the distance.

Rasulo said Disney has to weigh "lots of factors in the coming months and the coming years" before deciding when to break ground.

"We wouldn't be buying this property if we didn't think this was a great location for a Disney resort hotel," Rasulo said.

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