From the press release:
Cedar Fair, L.P. (NYSE: FUN), a leader in regional amusement parks, water parks and immersive entertainment, today announced it has sold the land at its California’s Great America amusement park and plans to close the park. Cedar Fair elected to sell the land to Prologis, Inc. (NYSE: PLD), a Bay Area-based logistics real estate company, for approximately $310 million with a lease agreement. The Company will continue to operate the park for a period of up to 11 years and then will close existing park operations at the end of the lease term.
The land sale, which was marketed by CBRE, was the outcome of a strategic review initiated by Cedar Fair in 2021 to explore potential avenues to maximize the value of the Company’s extensive asset portfolio. Cedar Fair purchased the land at California’s Great America in 2019 from the City of Santa Clara after the State of California dissolved redevelopment agencies, requiring the city to cede its ownership of the property to pay off existing debt. Prior to that transaction, the Company leased the land from the City for more than 40 years.
Cedar Fair intends to use proceeds from the land sale transaction to accelerate progress on its strategic priorities of reducing debt to achieve its $2 billion target, investing in high-return projects within its portfolio such as upgrading resort properties, and reinstating a sustainable unitholder distribution. Based on the strength and pace of the recovery since reopening its parks in 2021, and due to the additional capital raised through the Great America transaction, Cedar Fair expects to reinstate quarterly unitholder distributions by the third quarter of 2022, subject to review and approval by the Cedar Fair Board of Directors.
“We chose Prologis as our partner because of their deep ties in the Bay Area and their reputation for working closely with local communities on large developments,” said Cedar Fair President and CEO Richard A. Zimmerman. “For our investors, the sale and lease agreements allow us to monetize a high-value asset in the heart of Silicon Valley at a very attractive multiple. The transaction also provides us with a substantial sum of incremental capital which we intend to use to further advance our strategic priorities and generate enhanced returns for our unitholders.”
Read more from Cedar Fair.
For reference, the park bought the land about three years ago for $150 million.
My take: It won't even last 5 years. Prologis will be more than ready to build their warehouse(s) in 3-5 and I'm betting and they won't enforce much of a penalty for CF breaking the lease early. Rides will start coming out towards the end of next season after they market a farewell celebration, and they'll probably try to milk sales and get some traction out of the waterpark for an additional year or two before the park is closed for good.
Whats with this park? Doesn’t make much money? Why do they want to get rid of it? Or they want the land for commercial development?
Heartbroken to hear of this. I grew up attending the park and found my love of roller coasters while going there. My guess is its a combination of the value of the land, along with limited growth prospects. The park is bordered on the west by office buildings, on the east by a residential neighborhood, and not far from an airport to the south. It's been well documented that Cedar Fair had to fight those office buildings pretty hard to get Gold Striker built. It wouldn't surprise me if they are selling because of the red tape from all these neighbors. It also could be that their investments in the park (gold striker & Rail Blazer) never met their expectations for ticket sales. Either way it's a real loss for entertainment and recreation in the bay area. Glad I moved away.
I'd guess it has little to do the park's performance and a lot to do with the sheer value of the land.
Yep. Just like Wildwater Kingdom in 2016 and the initial thoughts about Geauga Lake in 2007, prior to the 2008-2009 market crash. The land is insanely more valuable as anything other than what it is currently being used for. And unlike nearly every other park in their portfolio, there isn't nearly as much history or historical significance.
I wonder how long the park actually stays open. No way it's actually 11 years.
A FB post out there wants to know what where we’d like the coasters to go after the closure. My response was we’ll likely not have to wait til after the closure.
Well we know that the shiniest one is going to Michigan’s Adventure. The others who knows.
If Michigan's Adventure needed another coaster, it would already have one.
This reminds me of the whole "Jay Leno is leaving in five years and handing the show over to Conan" debacle. While I wouldn't put money on the park surviving this, so much can change in an 11 year timespan when it comes to real estate, consumer wants and needs, etc.
Heck, Geauga Lake went through three (four if you want to count the Premier and Six Flags era as two) owners in just nine years. If they actually operate the park for the full 11 years, who knows what will happen. But my money is still on closing up shop well before then. How sustainable is it to keep operating a lame duck park? Wildwater Kingdom was in a sort of similar situation, except the land deal wasn't actually a thing until they closed. They were just shopping the land around and never added any signifcant cap ex projects in nine years. I can't imagine the park will do anything but get smaller the longer it stays open.
Not sure what the warehouse market is elsewhere, but it is absolutely red hot in Dallas/Fort Worth. They are building them everywhere they can. Unless something drastic changes, I would guess the park doesn't come anywhere close to 11 more years.
Well we know that the shiniest one
This was supposed to say the ****iest one... lol.
So, Jeff, are you saying that the other parks in the chain need coasters because they can't earn profits? I live in Michigan and am disgusted with Cedar Fair owning Michigan's Adventure. I RARELY go there because they won't put anything in. Apparently, they had record attendance after the used SLC was installed. Maybe, if they actually put in a decent coaster, they could actually draw new customers rather just those super wealthy Muskegon residents.
The smaller parks only stopped needing new coasters when Cedar Fair bought the Paramount parks.
If Michigan's Adventure needed a shiny new coaster to increase their profits, or if they would see a worthy return on investment on said shiny new coaster, then they would build it.
Nobody seems to blast parks like Waldameer or Canobie for making small, modest improvements over the years.
So, Jeff, are you saying that the other parks in the chain need coasters…
Duck fast or that meme won’t clear as it flies by.
I was partially making a joke from one of our ancient memes, but it's also true. MA is probably the most profitable park in the chain on a per capita basis. I know it was back in the day. It's a water park with a few coasters to fill an afternoon. Adding to its maintenance budget with an expensive coaster is a horrible idea.
Not a huge loss. The B&Ms are quite inferior, and the RMC will get sent to Dorney, VF, or WoF (they all need a big new ride). Goldstriker is somewhat of a loss I suppose. There’s a much superior clone of this park in Illinois, after all. It’s been pretty obvious this place wouldn’t last, it’s pressed on all sides by larger developments and the stadium was probably the final nail in the coffin. The land is simply too valuable.
It’s kind of surprising that this park is worth less than the land it sits on. It’s been there almost fifty years and yet, seemingly, never really caught on. Never expanded much or built anything big. Maybe Bay Area people have always just preferred marine world?
In any case, Knott’s it was not.
"The term is 'amusement park.' An old Earth name for a place where people could go to see and do all sorts of fascinating things." -Spock, Stardate 3025
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