Disney will inject HK$3.5 billion to fund the expansion, said Hong Kong’s Secretary for Commerce and Economic Development Rita Lau at a press briefing in the city today. Three themed attractions will be added in the park and construction will take five years, said Hong Kong Chief Executive Donald Tsang. The government won’t put any more money, he said.

“The executive council believes this is a good agreement,” Lau said. “The uniqueness of the attractions itself will help draw in new visitors.”

Disney and Hong Kong’s government have been in negotiations for the past two years over a plan to enlarge the park, which opened in September 2005. Tensions emerged when Hong Kong Disneyland said in March it halted creative and design work on the expansion project, leading to 30 job cuts. The government at the time said the cuts weren’t conducive to talks.

Govt Stake

Hong Kong’s government will maintain at least HK$1 billion of loans in the theme park, Lau said. The city will remain the project’s majority shareholder, though its stake will fall to 52 percent from 57 percent with Disney’s investment, she said.

Over the past three years, Hong Kong Disneyland has contributed a 0.2-percent-a-year gain to the city’s gross domestic product, said Helen Chan, a government economist.

Visitor numbers to the park totaled about 14 million in the first three years of operation, or between 4.5 million and 4.6 million a year, Chan said. The government, a decade earlier, had projected visitor numbers of between 4.2 million and 5.6 million a year, she said.

“This is indeed below what we had expected,” Chan said.

The expansion will create 3,000 jobs and an additional 600 long-term positions when the park opens, Tsang said today.

The Hong Kong government had invested $418 million in the park for its 57 percent stake and spent another $1.8 billion on landfill, roads, sewers and a rail line. Disney invested $320 million for the remaining stake.

Source: Bloomberg.com