Today, Cedar Fair 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., 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.
Looking into the 8-K filing for the deal a little bit more, it appears Cedar Fair has a lease on the park for 6 more years, with an option for 5 more years afterwards. The buyer, Prologis, also has an option to terminate the lease early with 2 years notice. Our guess is this means the park will probably operate for about 6 more years, but it seems unlikely to be more than that.
The land sale 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 for about $150million. That came 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.
“The sale and lease agreements provide us with a win-win scenario: First, it allows us to monetize a high-value asset in the heart of Silicon Valley at a very attractive multiple and use the sale proceeds to invest in the long-term growth of the company. Second, we can continue to operate one of the most popular California entertainment destinations by leasing the property back over a period of years,” Gary Rhodes from Cedar Fair Corporate Communications told us.
“Although we no longer own the land at the park, our guests and associates should expect no immediate changes at Great America from this transaction,” Rhodes added. “Going forward, we plan to roll out a full lineup of immersive entertainment, seasonal festivals, and culinary events as planned and for years to come, just as we always have.”
So, at least it sounds like the park will continue to have some events, even though major investments are probably drying up.
He did not comment on what might happen to Great America’s attractions in the future after the park closure. Hopefully the parks top coasters, Railblazer, Gold Striker, and Flight Deck, can eventually find new homes. and hopefully some of the historic attractions like the double decker Columbia Carousel survive as well.
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