By Eric Engelbert
The Regal Edwards Is Gone. 447 Apartments Are Coming to Anaheim Hills Festival.
The Regal Edwards Anaheim Hills movie theater at the Festival shopping center closed in 2022 and has sat empty on the west end of the center ever since. In March 2026, the Anaheim City Council voted 4-3 to let Aliso Viejo-based Shea Properties tear it down and build a 447-unit apartment complex in its place. The vote came after months of public hearings, a sharp fight over wildfire evacuation safety, and a union labor agreement that held up the final vote for weeks. The project is approved. The debate about what it means for this part of Anaheim is still very much alive. Browse current homes for sale in Anaheim Hills.
Where It Is and What Is Already There
The Anaheim Hills Festival Shopping Center sits at 8020 East Santa Ana Canyon Road at Weir Canyon Road, close to the 91 Freeway in the eastern part of Anaheim. The center is a community-oriented retail strip anchored by 24-Hour Fitness, Wood Ranch, Target, Hobby Lobby, and Tutor Time. None of those tenants are being displaced. The 447-unit project is going on the roughly 62,000-square-foot footprint at the western end of the center where the Regal Edwards theater operated until 2022, when it closed along with hundreds of other Regal locations during the company's financial restructuring.
The area around the Festival center is a well-established residential community. Anaheim Hills is a hillside neighborhood in the eastern end of the city, separated from central Anaheim by the hills and canyons of the Santa Ana Mountains foothills. It has a different character from downtown Anaheim or the resort district. Homes here tend to be larger, lots tend to be wider, and the sense of neighborhood identity is strong. The hills also sit in terrain the California Department of Forestry and Fire Prevention has designated a very high fire hazard severity zone, which became the center of this project's public fight.
What Is Being Built
The approved project is a four-story apartment building wrapping a 954-space parking structure. The building's amenity package includes swimming pools, a fitness center, club rooms, and a dog park. The developer is also committing to a bluff park that will be open to the public, not just residents, which is the kind of community-facing amenity that often helps win over neighborhoods that might otherwise oppose a project of this size.
The existing shopping center tenants remain in place. Shea Properties is only developing the former theater site. The 954-space garage is a significant parking commitment for a 447-unit project and reflects the reality that Anaheim Hills is a car-dependent area with no realistic transit alternative. The design wraps the residential building around the parking structure rather than placing the garage as a standalone structure, which is standard practice for this type of urban infill apartment product.
The project has its own website at thefutureoffestival.com where Shea Properties has been sharing updates on the development. No groundbreaking timeline has been publicly announced as of mid-2026.
The Wildfire Fight: What Residents Said and What the Vote Came Down To
The community opposition to this project was organized, persistent, and focused on a single issue: wildfire evacuation times. The hills east of Anaheim have burned multiple times. Residents who lived through the 2017 Canyon Fire described evacuation conditions at the City Council meeting, including commutes that stretched from 15 minutes to three hours as traffic backed up on the limited road network. The core concern was that adding 447 households to the area would make future evacuations slower and more dangerous.
An evacuation travel time analysis completed by the consulting firm Dudek concluded that in a worst-case wildfire scenario, the project would increase evacuation times by 14 minutes compared to current conditions without the operating cinema. That would push evacuation time for the Deer Canyon Park area above three hours in that scenario. City staff called the impact insignificant. The council majority agreed with staff. The mayor and two other council members did not.
Mayor Ashleigh Aitken, Councilwoman Kristen Maahs, and Councilwoman Natalie Meeks voted no. Aitken said the wildfire safety measures in the development agreement were "untested and aspirational." She was not opposed to the housing in principle but said she was not comfortable with the safety commitments being sufficient to protect residents in a real emergency.
The council majority argued that Anaheim Hills has received only about 9% of the new homes built in Anaheim between 2000 and 2025, while the central parts of the city absorbed about 76%. Councilwoman Natalie Rubalcava described the Festival project as an infill project in an established shopping center, meaningfully different from the Deer Canyon proposal the council rejected in 2024, which would have put an entirely new residential community into a canyon. Anaheim Fire Chief Pat Russell agreed those two projects were not comparable in terms of risk.
The wildfire concern is legitimate and not resolved by this approval. It is worth knowing if you are considering renting or buying nearby.
What Shea Properties Agreed to Pay for Safety
As part of the development agreement, Shea Properties agreed to the following public safety commitments:
$100,000 to Anaheim Fire and Rescue to fund wildfire mitigation efforts. $100,000 to the Anaheim Police Department to support wildfire evacuation training. Camera and Emergency Vehicle Preemption systems installed at four intersections on Santa Ana Canyon Road to improve emergency vehicle response times in the area.
The developer will also pay $2.4 million in park and recreation impact fees and $1.8 million in transportation impact fees as standard conditions of approval. The union labor piece took longer: Shea Properties reached an agreement with the Western States Regional Council of Carpenters at the end of February 2026, which cleared the final procedural hurdle before the vote.
Affordable Housing: What Is and Is Not in This Project
The project includes 45 apartments set aside for moderate-income households, which is 10% of the 447 total. Moderate-income in Orange County means households earning between 80 and 120 percent of the area median income. There are no low-income or very-low-income units in this project.
Notably, the developer is not required to pay the city's affordable housing in-lieu fee because the project application was filed before Anaheim adopted its affordable housing mandate in 2024. Projects that applied before the ordinance took effect are not subject to it. The 45 moderate-income units represent the affordable commitment that was negotiated as part of the entitlement process.
Who Is Behind the Project
Shea Properties Management Co. is an Aliso Viejo-based real estate development and management firm with a long track record in Southern California. The company is part of the Shea family of companies, which also includes Shea Homes, one of the larger for-sale homebuilders in California. Shea Properties focuses on commercial and multifamily development, and has been active in the Orange County retail-to-residential conversion trend.
The underlying property owner is OTR, which is part of the State Teachers Retirement System of Ohio, a large pension fund with significant real estate holdings across the country. Institutional pension fund ownership of suburban retail centers is common, and many of these properties have been exploring residential development as a way to generate returns from underperforming retail square footage.
Shea Properties hired former Anaheim Mayor Curt Pringle and his lobbying firm to advocate for the project beginning in 2023, per city lobbyist disclosure records. Pringle's involvement is worth noting because he has represented numerous development projects before the Anaheim City Council over the years and has deep relationships in the city's political and development community.
Anaheim Hills Has Done Very Little Housing. The City Needs It to Change.
The context for why this project got approved despite real community opposition comes down to a simple geographic imbalance. Anaheim is required to plan for 17,453 new homes by 2029 under the state's 6th-cycle Regional Housing Needs Assessment. That is the largest allocation of any city in Orange County. The city has been working through its housing element to identify where those homes can go.
As of the council vote, about 76% of new homes built in Anaheim between 2000 and 2025 were concentrated in Districts 3, 4, and 5, the central and western parts of the city. District 6, which covers the Anaheim Hills area in the eastern end, accounted for only about 9% of new homes over that same 25-year period. The council majority's argument was that spreading housing more evenly across the city is both a planning obligation and a fairness issue. The hills have had the benefit of low density and high home values while the rest of the city has absorbed the bulk of new development and its associated pressures.
Whether you agree with that framing or not, it is the argument that carried the 4-3 vote, and it is likely to carry similar votes in the future as Anaheim works toward its state-mandated housing numbers. You can see how Anaheim compares to other OC cities on the OC New Developments page.
What This Means for Renters and Buyers in Anaheim Hills
For renters looking in Anaheim Hills: The Festival project will eventually add 447 apartments to a neighborhood that currently has very few rental options. If you work in eastern Anaheim, in the canyon, or in communities along the 91 Freeway corridor, this project places you in a hillside community with shopping and dining at your doorstep. Pricing has not been announced. Based on the area and the project's quality level, rents will likely come in at the higher end of the Anaheim market when the project opens. The 45 moderate-income units will be priced below market rate and will likely be in high demand when leasing begins. No groundbreaking date has been announced as of mid-2026. Browse current Anaheim listings.
For homeowners in Anaheim Hills: A 447-unit apartment project in your neighborhood is a legitimate concern on multiple fronts: traffic on Santa Ana Canyon Road, evacuation route capacity, and the character of the area all change with significant new density. The wildfire concerns raised during the approval process were not resolved, they were overruled. The infrastructure improvements Shea Properties committed to help, but 14 minutes added to a worst-case evacuation is a real number, not a hypothetical. If you own in the hills, it is worth factoring a longer-term construction period and the downstream infrastructure questions into how you think about your property.
For investors watching Anaheim Hills: This is the first significant multifamily approval in the hills in years. If the project delivers and leases well, it will demonstrate that rental demand in this part of Anaheim is real, which will make it easier to entitle similar projects on other underperforming retail sites in the area. The institutional ownership of the Festival center means decisions about the rest of the center will be driven by return calculations, not community sentiment. Watch the remaining retail pads.
A 4-3 Vote That Anaheim Hills Will Be Talking About for Years
The Anaheim Hills Festival project cleared its biggest hurdle in March 2026, but the concerns that generated a 4-3 vote and months of packed council meetings do not go away once the approval is issued. The wildfire risk in this part of Anaheim is real. The housing need is also real. Both things are true, and how the city manages both as this project moves toward construction will be worth watching. I will update this post when a groundbreaking timeline is announced or when leasing information becomes available. If you want to talk through what this development means for real estate you own or are considering buying in the Anaheim Hills area, reach out directly.
