Posted Wednesday, March 2, 2011 11:57 AM | Contributed by Jeff
Orlando-based CNL Lifestyle Properties, which owns Frontier City and White Water Bay, last month announced a management agreement with Gary Story and Kieran Burke’s newly formed limited liability company, Premier Attractions Management. The pair stayed in touch and a few years ago, after their respective noncompete agreements expired, gave serious thought to getting back in the amusement industry.
Read more from The Oklahoman.
There's great irony that Kinzel would endorse the pair that tanked Six Flags as great management. But hey, they baited him into buying Geauga Lake, and we know how that worked out.
The Kinzel quote is, by far, the best part of the article. I'm looking forward to Frontier City's four new record-breaking roller coasters next year.
As much as GL was a dump, was $125M really too much to pay for it? Just the ride hardware alone probably made up for half of that.
The soiled reputation and inability to turn the park around obviously made it a money-sink, but the actual purchase itself still seems like a steal.
Yeah, I though the price wasn't bad by itself, but the fact that they couldn't get any return on that investment was problematic. And they still haven't been able to sell the land.
I guess you can look at that transaction two ways. First, the one Andy just mentioned: add up the value of all the rides plus land plus expected profit from attendance, etc.
The other would be: how much more did Kinzel pay for the property than it would have sold to another park operator, investor or real estate developer? This is much more of a gray area. But there are a finite number of amusement park entities out there that could have had the wherewithal to muster a counter-offer anywhere near what CF paid for the property. Disney, Universal, A-B, Herschend -- it's doubtful any of those were seriously interested into buying a seasonal park in NE Ohio.
Who does that leave? Merlin? I doubt it. Possibly Parques Reunidos, since it was shortly after this sale that they began moving into U.S. parks. If Six Flags had merely trucked all the rides off site and waited for a decent price for the land, they'd probably have wound up in the same boat that CF still is today.
I highly doubt that any other chain offered $124,999,999, or $120 million, or maybe even $100 million. So on that basis, CF probably did overpay, and perhaps enormously.
Edit: Jeff sneaked in there on me.Last edited by Ensign Smith, Wednesday, March 2, 2011 1:14 PM
My understanding is that when the Geauga Lake sale went down, the property wasn't actually "for sale". But a chance meeting between Story and Kinzel basically ended up with Cedar Fair buying the property. My guess is that the purchase price had very little to do with the actual value of the property and had more to do with what Cedar Fair could afford to spend and what Six Flags needed to raise in cash...combined with some estimate of the earning potential of the property.
Of course, Cedar Fair didn't know at the time that the rides and infrastructure were falling apart and that the lot had been burned operationally. And the mucking about with the waterpark was really quite stupid: relocating the waterpark *twice* looks like huge capital expenditures on the balance sheet, but to the local customers it looks like "we're not getting anything new...AGAIN".
The funny part about this whole story is that just a couple of weeks ago I was comparing today's CNL Lifestyle Properties with the Premier Parks of 1995. Little did I know that Premier Parks itself was going to re-emerge from the whole mess...at the same park where it got started the first time!
--Dave Althoff, Jr.Last edited by RideMan, Wednesday, March 2, 2011 1:56 PM
History repeats itself in this industry.
^Like Ed Hart being back at KK after the park had more "lives" than a cat... ;)
Wondering if any other PARC parks might be on the radar of Story/Burke for future expansion... :)
^ CGA lol
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