Monday, January 9, 2012

A Sweet Stadium Deal for California's Great America

Now that Cedar Fair will be keeping California's Great America as part of their portfolio, eyes have turned to the deal that the company reached for the use of the park's adjacent parking lot.  With the plan approved it has become public record, which means that we can take a look at just what Cedar Fair got in return for cancelling their lawsuit against the stadium plan.

In the official document - which can be downloaded directly via this link - it looks as though Cedar Fair actually got a decent deal out of the agreement.

For starters, when the company's lease for the property the park sits on (Cedar Fair does not own the ground) expires in 2039 they can extended with a relatively small percentage increase for the rent.  This chain could continue all the way up to 2074, each time increasing at what will probably be well below what the market on its own would dictate.

Currently the city gets extra rent from the park when its gross revenues pass $56 million, though that has not happened since 2006.  Now, starting in 2020 the threshold for the extra rent will increase by 15%, then again in 2030, then every five years after.  However, Cedar Fair must invest at least $10 million in new capital in the park in the five years preceding the threshold increase to get the bump.

This is basically incentive for Cedar Fair to expand the park.  By adding new rides and attractions in these set periods the park effectively can make more money - and avoid paying any of it to the city through percentage rent.

Cedar Fair also some strict rules in place for when events can take place at the stadium.  Days when the park is closed, and ones in the evenings are fair game - but not on holidays.  There cannot be a game scheduled on a Saturday in August.  The company also has "sole discretion" on approving events on Saturday or Sunday in June, July or August, and all important Summer and Fall holidays.

This helps the company protect itself on days that are usually busy, in fact I'm a bit surprised they got as much say in the matter as they did.  Throw on top of that a $12.5 million cash payment ($3.5 million when the lease is signed, and $8.5 million when the stadium opens) and it seems Cedar Fair generally got their way.

So now the big question - will California's Great America finally see some new rides and attractions as a result of this?  One can hope!


Surya said...

I hope that, now that this huge hurdle has been tackled, Cedar Fair finally decides to invest in the park again!