Terrible news for the Santa Clara park. Not this again! Stay tuned.
UPDATE: See statement from Santa Clara Mayor Lisa M. Gillmor.
Text from Cedar Fair press release today:
CEDAR FAIR CAPITALIZES ON OPPORTUNITY TO SELL ITS LAND AT CALIFORNIA’S GREAT AMERICA AMUSEMENT PARK
June 27, 2022
Cedar Fair will continue operating Great America under a long-term lease agreement as part of an eventual wind-down of the park
Transaction proceeds to support planned acceleration of strategic priorities including deleveraging and reinvesting in high-return projects within the portfolio
SANDUSKY, Ohio (June 27, 2022) – 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.”