Six Flags wants out of New Orleans, offers the city a deal

Posted | Contributed by Jason Hammond

The company that owns Six Flags New Orleans does not want to re-open the flood-ravaged eastern New Orleans theme park, and has sent a proposal to the city that would allow the amusement company to walk away from its 75-year lease, according to documents. Six Flags Inc. has offered to pay the city $10 million to cover rent to the city, give the city 66 acres of land the company owns adjacent to the park, and give the city 20 percent of its insurance proceeds above $75 million. The amusement parkhas been closed since Hurricane Katrina.

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It's not like Six Flags can't find $20m to pay off HUD right now. They just don't want to if they can get away with $10m.

You have no customers, you have no employees, you have very few operating rides (if any), but yet people are upset about Six Flags pulling out? The writing has been on the wall with this one right after the city flooded. I firmly believed that the pre-Snyder organization would've done the same thing. One look at the pictures from the park said that there was no way that they would recover. What if it were to happen again? It's one thing with a park in Pennsylvania which can recover because the water does eventually recede, but all the rides and buildings have been sitting in God-knows-what for a long time.*** This post was edited by Intamin Fan 7/2/2006 1:10:05 PM ***

Well, the first indication that SFNO wasn't going to reopen under SF should have been when they moved Terry Prather (SFNO's GM to SFA)... I mean, if they were planning on reopening SFNO by 2007 or so, one would THINK that they would let the GM keep his job at the park and just spend the 2006 season helping out at another park. By ousting the old GM at SFA and replacing her with Prather, it seemed more like they were sending him to SFA for the long run.. not to just return to SFNO a year or two later... then again, at the start of the season, it looked like 2006 would be the last year for SFA and that's hardly a long term commitment, so who knows...

Prather came from Fiesta not long before that, didnt he? The guy just likes to move around...

I would like to say that it looks like Dixie Landing will now be the main park for the New Orleans market. It is much smaller than SFNO but if they ever decides to add a large compact wooden twister on that vacant piece of land just NE of the park it would help fill the void. They just got a drop tower although I like to see it replaced with a Maurer Soehne Xtended Power Tower but it is a little early for that. Right now I think they need an airtime woodie first and I hope they are willing to look into it. I just emailed them with my suggestion. One concern is the half dozen houses across the street from the vacant land and whether or not they can build there.*** This post was edited by Pink Floyd Fanatic 7/2/2006 6:52:18 PM ***

I don't know why Six Flags bought the park in the first place. It never did well before they owned it, and there was all kinds of drama over whether or not they could build a water park, if I recall correctly.

Fierce, Prather was the Former GM of the Jazzland park and just kept his position when SF took over.

Jeff, They could have built the waterpark at anytime and from what we are hearing that was the plan to build one and resize the park smaller if they would not have incurred problems meeting interest payments which is prompting Sf to liquidate parks. If SFNO would have not been damaged I am sure it would have been 7 parks instead of 6. The locals really knew the park in its pre Katrina state was doing poorly, what upset them was the fact that SF purposely killed a surburban waterpark project knowing that if SFNO failed there would be another venue locally. Now left with BB/DL which is booming and not a bad park, actually pretty awesome. The man that runs the park from what I hear takes a lot of suggestions and runs with them , that is why I believe the park is moving up. The city is in Bad shape financially not unlike SF but like a lot of people say Business is Business. I hope there comes a settlement which is mutually beneficial for both parties, but as of right now I believe the city holds the best poker hand if it is played right.

^ Jeff: "I don't know why Six Flags bought the park in the first place."

FP, earlier: "Pretty amazing that a small fry park like Dixie Landin is now the biggest player for 300 miles."

The South was a rapidly-growing area, and the lack of competition created a real opportunity for the park. SF mismanagement was present, from what I understand from those who actually *visited* (LOCAL is just as important as corporate, if not moreso, IMO). Then Katrina came...

They claim the city wasn't properly supporting the park. But I think this is all just an excuse. The park did make money, not tons, but it did pull in a profit. Anyone who says the park was losing money just isn't looking at the information that's out there.

Six Flags could have easily continued the success of 2003 by installing a small ride or marketing something as new besides changing the ride film of the simulator ride. The park did very well for its size in 2003 and even Six Flags noted that the park exceeded expectations. There was a strong start in 2004 and the crowds were there! However, proper Six Flags management was completely absent in 2004. Very often on crowded weekends with festivities going on (concerts or whatever), lines would be around two hours because idiots thought they could sell a few extra cokes by making the lines long by running only one train (this is straight from the employee's mouth who had the ability to call in for an extra train). It started off really well and attendance kept up pretty much all the way through August. July 4th weekend of 2004 was much more successful than 2003, and some of the Christian concerts drew record crowds for the yearly event.

By August it was clear people were getting fed up by the abysmal operations of the park. That was a really slow month and it never picked up, even during their highly hyped Fright Fest event, which was actually well-executed. Six Flags pulled the worst stunt yet at this point. Signs were up for a new attraction. But in 2005 all we found were two rides removed and the operating schedule cut to pieces. How is that going to improve attendance? People saw past the whole "green space" bs. They're just using the whole performance deal as an additional excuse.

However, I cannot disagree with their intent to leave New Orleans. But they played a really nasty trick on the city. City officials were very excited that one of the larger employers in the New Orleans East and tourist attractions in the region said they were intent on rebuilding and I quote from the Six Flags site, "we're committed to working with the city in support of the recovery efforts." I bet the city is speechless at this time. It looks even worse when they want to take all the insurance money and run (and profit) while all the city is left with is debt.

*** This post was edited by Cameraman 7/2/2006 10:52:20 PM ***

Why are you guys bashing this company before reading the article?

"The payments on the loan are $2.4 million a year until 2017. Under the terms of the deal struck with the city out of Jazzland’s bankruptcy, the city pays $1 million a year toward the debt and Six Flags pays $1.4 million. HUD says the city is current on its payments. Six Flags says it has continued to pay rent since the storm"

thats from the article.

Meaning the money and assets that the company would be giving the city would be more then enough to cover their share.

Their is 20.4 million left on the loan and the park would be giving the city half of that 20 million and the land and some money from the insurance.

BAsically that would cover their half of the loan.

why bash the company when they are paying the city the agreed amount ?

Agreed that Dixie Landin' is a reasonably nice, if modest park. I had a pretty good time last I visited the place, better than my visit to SFNO that trip, just wish they'd build a wooden coaster already. They don't have a vast expanse of woods surrounding them like Holiday World, but surely they could find a way. Seems their waterpark provides the bulk of their business but things have definitely picked up for Baton Rouge with all the new residents.

I still remember someone (maybe Jeff?) saying why would anyone go to New Orleans for an amusment park that simulates the French Quarter when the real thing is right there? I mean if I want to go visit the French Quarter at an amusement park, I'll just go to SFGAm:)

Mr. Praether has been in mgmt positions for 17 years including Jazzland and Sea World San Antonio. Fierce Pancake, I think that's where you got him confused with Fiesta.

Bio Here:
http://www.sixflags.com/parks/america/pdf/Terry%20release.pdf

Their is 20.4 million left on the loan and the park would be giving the city half of that 20 million and the land and some money from the insurance.

First off . I agree SF will be paying off their portion of the loan, that is a given. The 66 acres of swampland they graciously are willing to give the city would have to be cleared and filled and I don't know how much it is worth but granted it is not really worth much for housing and if it was ever used by six flags or the city it would probably cost more to mold it into a usable property than it is worth stand alone. As for as the insurance money, read the statement Giving the city 20% over the $75 mil they are asking..They won't even get close to that amount , so the 20% is a big $ 0. I don't know if six flags can actually walk away with any rides due to the lease agreement. The insurance money was purchased for repairs to the rides if their were any and if SF wants to walk away from the park then the insurance monies can go to SF. I not unlike everyone on this board purchase insurance and I am quite sure all policies follow the same guidlines , given that if SF collected from the insurance company and did not repair the park, New Orleans will now own a park that is uninsurable due to lack of bringing the park to pre storm condition. then if a insurance policy is applied for it will cover the park in its present condition, that would be foolish on the city's part , Kind of like you and me buying a insurance policy on a destroyed Home, and another problem would be who would write it. If SF wants out of the market then the park insurance monies need to stay with the rides, I didn't purchase a insurance policy to make money, I purchased it to recover any losses I might incur, which is not what SF is trying to accomplish .

The city definitely didn't require them to carry 66.66% coverage with the usage of the policy to recover a corporate debt load in mind. Six Flags obviously sees this as a quick way to get some money from their parks not unlike how they see dumping six other parks as a quick way to pay off the debt. This is probably small in comparison, but I believe they are also collecting business interruption money in addition to leasing out the parking lot to FEMA.

And Six Flags wanting out of SFNO comes as a surprise to... who? Anyone? Anyone?

Knowing the financial situation of SF, I wrote this park off as "dead" the day Katrina hit.

On a lighter note:

I just went to Dixie Landin´s website to check them out. They must have a very creative p.r.-writer or a good sense of humor. Here are the very creative marketing claims for their Boomerang:

14 Stories tall

Built in Germany