Continued: Cedar Fair announces Geauga Lake will be water park only
Interesting concept-- we'll bring tons of traffic through your town, create tons of garbage, thousands of gallons of human waste that gets dumped into your town's system, pave over acres of ground so the rain gets diverted into town. We'll have noise, bright lights, the occasional fireworks display, and if you have a problem with any of that f*** you, you're not our target market.
P.S. Give us a variance so we can build a coaster higher than your zoning allows.
I was being facetious about the development of public parks and libraries, at first. But there are cases where financially strapped cities are considering or already have sold off parks or other former public areas to developers in order to bring some money into the coffers. (google Antietam Lake, Reading PA for example)
Maybe the market will tell us when we finally have too many condos and boutiques. The problem is, we usually don't know until we already built a lot more than we need, or can actually support. Sort of like builidng nearly a million houses more than we actually need right now.
But... since we're talking ROI and stuff. What is the ROI for this site? How much money does this site and the podcast make? Surely not as much as a website selling real estate for example? So isn't it all just a waste of bandwidth?
Are you suggesting they not pay taxes?
thecoasterguy said:
If they are spending millions on taxes every year, than that is more money down the drain.
No, it made sense to buy it for more revenue. Sadly, they thought it was all Six Flags screwing up and not the loss of SeaWorld. Why would they buy it to close it when clearly Six Flags was doing a pretty good job of tanking it on their own? Your logic makes no sense.
Yes, Cedar Point and GL are an hour and a half away from each other, but unless they were intending to do this from the beginning, it truly only did make sense for them to buy the property to shut it down, which they then should have done immediately.
And there were no coaster wars. The general public is generally stupid and doesn't know the difference in a global context, and the two big record breakers at Cedar Point were in development long before the Six Flogging of Geauga Lake.
Jeff - Editor - CoasterBuzz.com - My Blog
Jeff said:
Are you suggesting they not pay taxes?
Jeff, your logic here is confusing me. I don't mean that in a nasty way, but I guess I'm just confused right now. Please just confirm this is what you mean for me...
From what I have heard from you believe:
- Cedar Fair bought GL at a far undervalued market value
- Cedar Fair did everything right to try to grow the property
- While Cedar Fair underestimated the ability for the park to be a theme park, it doesn't matter because the value of the land and assets is still so much
For the record, of course I'm not suggesting that they not pay taxes -- but when (I believe?) you keep stating that the park was such a great value for the sale price that they are going to get, you seem to not be taking into account these expenses like taxes that Cedar Fair should have been looked into before they bought the land for that price.
I still maintain that Six Flags would not have sold for a grossly undervalued price if they felt they could have removed the rides themselves and sold them to other parks. I guess this raises another question from me as to your theory -- if Six Flags really did give Cedar Fair a huge discount on the property, why? Six Flags at the time had far more parks where they could have relocated the rides to, and Six Flags like Cedar Fair has no desire to keep underperforming properties open. And, while I definitely think that Six Flags was mismanaged badly during that period, I doubt that they would have been so mismanaged as to sell the park for pennies on the dollar, as it seems you are stating.
Again, please correct what you feel is wrong of this or explain it so I understand. Otherwise, it just doesn't seem like that much of a value to me.
No, it made sense to buy it for more revenue. Sadly, they thought it was all Six Flags screwing up and not the loss of SeaWorld. Why would they buy it to close it when clearly Six Flags was doing a pretty good job of tanking it on their own? Your logic makes no sense.
My logic makes no sense? I guess I see it as Cedar Fair's logic makes no sense. We've established earlier in this thread that theme parks draw from a larger surrounding area. CP is 1.5 hours away from GL, hardly a world away, and easily within drawing distance for potential CP visitors.
I guess that the second part of this is what I don't understand. You state "Why would they buy it to close it." My question is that if they thought that Six Flags was tanking it all on their own and that there was no decision to make it a competing or complementary park to CP, why would they have bought it to begin with unless it was to close it (which then should have happened immediately)?
It doesn't make sense to me that Cedar Fair was going to try to make GL into a small, enjoyable regional park if they knew they would be paying through the nose on the taxes of the area, and if they felt that by adding a huge ride to GL, it would be competing against CP.
I know that you have had conversations with some of the people from the company on this, so maybe you can shed light on what their original intents were with the land -- again, especially if it wasn't to make it complement Cedar Point or compete with it?
And there were no coaster wars. The general public is generally stupid and doesn't know the difference in a global context, and the two big record breakers at Cedar Point were in development long before the Six Flogging of Geauga Lake.
I also don't understand what you are saying here. While there may not have been any global context to the "coaster wars", what I meant by that is that in the Cleveland market especially, there was a LOT added in a very short time. In 2000, you had Millennium Force at Cedar Point, and three major coasters (Villain, S:UE and Batman) added to Six Flags Ohio at the time. In 2001, Six Flags got X-Flight. In 2002, Cedar Point got Wicked Twister. That is six major coasters in three years across the two parks.
How I look at it, the four that Six Flags added was clearly to try to compete with the quantity of rides at Cedar Point. Do you see this differently? The two that Cedar Point added, while I'm certain that MF was in the works for years, was Wicked Twister really planned that far in advance? And with WT being so similar to S:UE, it seems very conceivable to me that WT was built as a bigger, better, not worth going to Six Flags for, version of the ride.
It seems like a war for customers to me. I can't think of two other parks that are in nearby markets that have added near the same amount of rides in the same period. It wasn't chain-wide, and it wasn't something that either company flaunted, but it seems pretty obvious to me. Do you see it differently?
Coasterkid200 said:
^ Steel Venom 8.5 millionThunderHawk 10 million
plus some flats, and other attractions.
CF would not have spent $10m on a coaster for MiA nor would it have spent $8.5m on an Impulse. The potential ROI is not there.
At $30 admission plus $40 percap that's 142,858 new admissions MiA would need to pay for a $10m coaster--and that assumes ZERO operating costs and that the $40 percap is pure profit. MiA draws 550,000 total, so a $10m coaster would need to increase MiA's attendance by 7% and HOLD that level for 4 years just to pay for the thing--again assuming no operating costs and that the $40 percap is pure profit.
Looking at it another way, CF removed X-Flight because it gave "only" 300,000 rides (out of an attendance of 700,000) at GL. MiA would, presumably have to boost it's attendance to 700,000 (27%) to get Thunderhawk's count up to "only" 300,000.
No way CF would have spent $10m on a coaster for MiA.
As to Steel Venom, $8.5m at $70/guest means 121,429 new guests--again assuming no operating costs and that the $40 percap is pure profit--just to pay for it. Anyone think an impulse is that popular?
CF would never have bought either--the ROI numbers don't make sense. (Remember, for a 5% ROI a $10m coaster needs to generate $500,000 PER YEAR in profit--7143 guests PER YEAR at $70--in addition to operating costs and just paying for the damn thing.)
This Isn't A Hospital--It's An Insane Asylum!
MiA draws 550,000
Yea what in 2004. In 2006 they were at 650,000 and I heard that they hit 700,000 this year.
Timbers crew 08
Coasterkid200 said:
MiA draws 550,000Yea what in 2004. In 2006 they were at 650,000 and I heard that they hit 700,000 this year.
The park has been growing by over 10% a year and Kinzel hasn't been trumpeting it on conference calls or 10-K's?.
So, if they add another 50,000 this year they have $3.5m more (assuming $30 admission and $40 percap). Assuming they want a 7% ROI on a $10m coaster and the coaster has NO operating costs they would pay for the coaster in just over 4 years.
Or, they could not add a coaster and continue their 10%/year growth and pocket ALL the $3.5m.
I still can't get over a park growing at 10% a year for 4 years in Michigan's distressed economy. Those people should be running CP! Does DK know about this?
This Isn't A Hospital--It's An Insane Asylum!
You've got to be kidding. Do you honestly think they had no idea what the taxes were on the property? Do you think they arrived at the 1.1 million annual attendance target just out of thin air, or because given all of their projected expenses and revenue, that was the sweet spot?
thecoasterguy said:
...you seem to not be taking into account these expenses like taxes that Cedar Fair should have been looked into before they bought the land for that price.
These people aren't idiots. It's not the first park they ever acquired. As I've said countless times, their mistakes had nothing to do with cap ex or marketing or any of the typical things you'd expect. The biggest issue was not understanding the dynamic between Geauga Lake and SeaWorld.
I don't know or care why Six Flags undersold the park. Frankly it doesn't matter because that's the world we live in. It's not 2004. That area has changed dramatically since then.
Well it would make more sense to you if you'd stop and realize that they thought they could generate the attendance and revenue to pay the property taxes, pay off the financing and generate contribution profit to the company. See previous comments. They didn't just buy the thing on a whim and hope for the best.
My question is that if they thought that Six Flags was tanking it all on their own and that there was no decision to make it a competing or complementary park to CP, why would they have bought it to begin with unless it was to close it (which then should have happened immediately)?It doesn't make sense to me that Cedar Fair was going to try to make GL into a small, enjoyable regional park if they knew they would be paying through the nose on the taxes of the area, and if they felt that by adding a huge ride to GL, it would be competing against CP.
I've said it over and over, and so have others. Cedar Point was not bleeding customers to Six Flags. None of their decisions were made in response to anything Six Flags did in Geauga County. The first piece of Millennium Force arrived in December 1998. Dragster was prototyped as Xcelerator at Knott's in 2002, with R&D likely starting two years before that. Sure, they may have bought an Impulse because they liked the concept, but it sure wasn't for competition's sake. Again, they weren't bleeding customers to Six Flags.
While there may not have been any global context to the "coaster wars", what I meant by that is that in the Cleveland market especially, there was a LOT added in a very short time... How I look at it, the four that Six Flags added was clearly to try to compete with the quantity of rides at Cedar Point.
Jeff - Editor - CoasterBuzz.com - My Blog
Now you're just being ignorant. Which part of Muskegon's economic environment is like Cleveland? If you can't appreciate that they are two completely different worlds, then there's no point in trying to convince you of anything. This is not RCT.
Captain Hawkeye said:
I still can't get over a park growing at 10% a year for 4 years in Michigan's distressed economy. Those people should be running CP! Does DK know about this?
Jeff - Editor - CoasterBuzz.com - My Blog
Time to play some RCT. Thanks Jeff.
Captain Hawkeye said:
Coasterkid200 said:
MiA draws 550,000Yea what in 2004. In 2006 they were at 650,000 and I heard that they hit 700,000 this year.
The park has been growing by over 10% a year and Kinzel hasn't been trumpeting it on conference calls or 10-K's?.
So, if they add another 50,000 this year they have $3.5m more (assuming $30 admission and $40 percap). Assuming they want a 7% ROI on a $10m coaster and the coaster has NO operating costs they would pay for the coaster in just over 4 years.
Or, they could not add a coaster and continue their 10%/year growth and pocket ALL the $3.5m.
I still can't get over a park growing at 10% a year for 4 years in Michigan's distressed economy. Those people should be running CP! Does DK know about this?
CF has adopted a total attendance, not a per park attendance reporting format. But in the 2006 Annual report states MiA was having "strong results", 2005 "set a new season attendance record". It is rather common for parks to keep their financials close to the vest. Also MiA is pulling from the southeastern Chicago market, that is probably a factor in it acquisition.
The SLC didn't cost the park $10 Million, but it is still a $10 Million dollar attraction. It's like buying a $2000 TV on sale for $1500, it still is a $2000 TV, you just paid less for it. (It's probably an accounting regulation about the value of the asset, not the cost of that asset or it's good PR). Anyway MiA last coaster was in 1999, I bet they have saved their pennies over the last 8-9 years. *** Edited 10/5/2007 12:44:35 AM UTC by otterkpr***
Adding a coaster in a park that's already growing at 10% per year sounds pretty unnecessary to me. The improvement in attendance would be the same with or without a "new" coaster but the coaster will be a giant added cost. Its also an opportunity to take credit for the growing park, how nice.
Isn't this all besides the point anyway? Captain Hawkeye brought up a good point which was ignored for an argument about an imaginary statistic, for which no authority exists.
I don't think it's particularly necessary to add a coaster to Michigan's Adventure either, but they might as well do it while the going is cheap.
Michigan's Adventure has been expanding its water park and infrastructure. Amazing what a little paint and a Coasters restaurant can do for the place. I was there last year and it was like a different world pre-Cedar Fair. They've got the right pricing and marketing mix that fits in that market. Muskegon and Grand Rapids, two relatively small towns, have a nice little park there and it works because there's not another one anywhere even remotely near by. What else is there to do in that part of the state other than hang out on those magnificent beaches?
I love it how now you guys are praising the company for handling MiA with great success, yet talk out of the other side of your mouth and accuse them of not knowing what they're doing given Geauga Lake's failure. They might both be amusement parks, but they couldn't possibly be in more different environments.
Jeff - Editor - CoasterBuzz.com - My Blog
Zima said:
How could a park that has added no new coasters in 8 years be increasing its attendance at 10% per year?Adding a coaster in a park that's already growing at 10% per year sounds pretty unnecessary to me. The improvement in attendance would be the same with or without a "new" coaster but the coaster will be a giant added cost. Its also an opportunity to take credit for the growing park, how nice.
Isn't this all besides the point anyway?
Getting placed on the map by CF. They promote it with CP, they have had a discount coupon in the CP getaway guide since they bought the park. The first time I visited was because it was $20 to get in with the coupon and I was why not, I like CP, this park could be fun and I have been back every year since and have told family and friends and they like the park as well.
They are capacity building, if more people come, they need more things to do and the longer a guest stay at a park the more money they end up spending.
No, The point is MiA is a park that is growing while GL was dieing. I never went to GL because I never heard good things about it. People on here and else where on the internet always had negatives to say about the park, no matter who owned it. *** Edited 10/5/2007 5:00:15 AM UTC by otterkpr***
otterkpr said:
People on here and else where on the internet always had negatives to say about the park, no matter who owned it.
And if you read it on the internet, lord knows it must be true.
Ray P.
On my graduation we spent one day at GL and the next at Cedar Point and a LOT of kids did the same thing. What I still don't get is this:
While I have more knowledge than many about the amusement industry having worked both full time and part time with several parks...I don't claim to be an expert. Yet, as soon as Six Flags announced they were going to build all those attractions in one year I knew immediately it was a bad idea. If I did, why didn't they? The only answer I can come up with is EGO and ego ain't a good reason to do anything.
Rob, if this was a one game series I'd be feeling pretty good about the Indians this morning. But, I don't let my ego get in the way of common sense.
Good point about Funtime knowing what the park was. Up until the Six Flags days, I was under the impression the park's ownership and management had a pretty good grasp on what would continue to keep the park successful. The removal of Corkscrew and the installation of the Boomerang and SLC weren't very creative moves but they seemed to provide the loyal patrons with rides that they generally liked. Slow growth- not an explosion- should have been the plan. If Superman, Batman, Villain and X-Flight were added at a steady pace between 2000 and 2007 (and Six Flags knew a thing or two about customer service), we might not be having this conversation right now.
Jeff - Editor - CoasterBuzz.com - My Blog
I think that Hershey and Dorney are good examples of competition improving things. The parks are an hour away from each other- clearly in competition with one another as they draw from a common market. Each park is constantly doing something and I don't think that would be the case if one existed and the other didn't. Of course there's Knoebels, but as always, that's a completely different situation.
And, while all that was going on Sea World got into the act and Busch Gardens has made some moves.
It's true that competition built that place up. I can't even begin to list all the things that competition brought to Orlando, it'd take too long.
Closed topic.
