larrygator Posted January 25, 2013 Share Posted January 25, 2013 (edited) I'm wondering if there is a loophole about the rides remaining property of the state after 50 years. For example, if Ed Hart's company leases a ride that is placed at Kentucky Kingdom temporarily it would not be a permanent installation. Just speculating. The following could be pure foolishness, but I like playing with numbers. Full disclosure: I have never run an amusement park, never even played RCT. So here's my speculating with the numbers. Ed Hart is hoping to reach 1 million attendance in 5 years, so I'll use 1MM attendance as a base. Let's assume each car has 3 passengers. Estimate average entry price is $25. Estimate $20 spending at the park per guest. Industry average tends to be in the $20-$25 range 330,000 cars x $1.25 = $400,000 Parking revenue 1,000,000 guests x $25 = $25,000,000 Gate revenue 1,000,000 guests x $20 = $20,000,000 x 20% profit margin = $4,000,000 Food/Games/Souvenir revenue That's roughly $25.4MM in revenue Expenses 1,000 season employees at $10/hr x 50 hours/wk x 120 operating days = $8,500,000 for salaries of seasonal employees 25 full time employees at varying salaries = $2,000,000 Estimated average yearly rent = $1,100,000 Estimated average yearly loan payment with interest = $600,000 Capital Improvements yearly = $3,000,000 Roughly $15.2MM in expenses (although I'm sure I'm missing many itemizations like insurance) That leaves a delta of $10,000,000 a year for Ed Hart and the development company as profit. Granted after 50 years Ed Hart owns nothing, but he'll be dead anyway. Edited January 25, 2013 by larrygator Link to comment Share on other sites More sharing options...
Swimace Posted January 25, 2013 Share Posted January 25, 2013 never even played RCT. I'm sorry, but your post means nothing to me. Some things to consider: -Is Ed going to inspect his rides every 10, 20, or 30 minutes? -Of the existing rides, how reliable are they right now? Due to them sitting idle for quite some time, I think we are going to see a lot of Safety Cut-Outs when the park opens. -Is his development budget going to be set to "maximum", "normal", or "minimum." I think we all shudder to think what would happen in a "no budget" situation. -Also, will he be investing in scenery and theming, or just rides? -He should rename the park to "Funtopia" Link to comment Share on other sites More sharing options...
larrygator Posted January 25, 2013 Share Posted January 25, 2013 never even played RCT. I'm sorry, but your post means nothing to me. You win! Link to comment Share on other sites More sharing options...
Intaman Posted January 25, 2013 Share Posted January 25, 2013 (edited) Since the state owns the land and the infrastructure is already there, the lease makes sense. The Hart-backed group did not have to outright purchase and develop/redevelop any land. Of course, they will need to update and rehab park areas, rides, etc. In fact, I wonder what the land valuation for this space is even with the current market. There is also the tax-benefit of leasing land, especially that state-owned. Last, the term and surrender clause is typical for this lease. If the park is able to generate revenue, both sides will benefit (a no brainer). However, given that the state owns the land, they have far more capacity to leverage a deal that works for them. But, time will tell whether the park will attract people. I also hope they install the $15 million dollar roller coasted mentioned by some media outlets so we have a new credit to go after. Edited January 25, 2013 by Intaman Link to comment Share on other sites More sharing options...
Hilltopper39 Posted January 25, 2013 Share Posted January 25, 2013 That leaves a delta of $10,000,000 a year for Ed Hart and the development company as profit. Granted after 50 years Ed Hart owns nothing, but he'll be dead anyway. You have to remember that the park is right across the street from Churchill Downs so that $10 million dollars a year profit could be turned into $50 million a year very easily if Ed goes $3 million across the board on the 6 horse in the 5th race, or if he gets a good tip on a mudder..... Link to comment Share on other sites More sharing options...
CP2000 Posted January 25, 2013 Share Posted January 25, 2013 Am I the only one that is thrilled about the deal? Link to comment Share on other sites More sharing options...
ArundelHigh Coasters Posted January 25, 2013 Share Posted January 25, 2013 I am so happy the lease is approved!!!, I am definitely going to visit!!! Link to comment Share on other sites More sharing options...
lilsam1993 Posted January 25, 2013 Share Posted January 25, 2013 Do any of you think that this is BAD for Holiday World when it comes to the Indianapolis and Louisville market? Link to comment Share on other sites More sharing options...
Intaman Posted January 25, 2013 Share Posted January 25, 2013 ^^^I think it depends upon the old (ahem, "new") Kentucky park's attractiveness. Holiday World seems to capture the family market. If the park can appeal to families, I think it can be competitive with HW. Now, will that happen? At this time, we can only speculate. Link to comment Share on other sites More sharing options...
Chittlins Posted January 25, 2013 Share Posted January 25, 2013 Do any of you think that this is BAD for Holiday World when it comes to the Indianapolis and Louisville market? While in Nashville last summer, I saw several Holiday World bilboards. Well, there's one opening up between it and a targeted market. Link to comment Share on other sites More sharing options...
Lareson Posted January 25, 2013 Share Posted January 25, 2013 Considering that both parks operated for years without too much guest interference, I think it'll be fine when this opens up. I know a lot of the locals are looking forward to this park running once again. Depending on what Hart has in store for it, the park could become very successful once again. Link to comment Share on other sites More sharing options...
crazywolf88 Posted January 25, 2013 Share Posted January 25, 2013 There appears to be a loophole here. Correct me if I'm wrong but since the developments become the state's property, that means that it is the state's job and not Hart's company's to maintain the installment since they don't own it. Link to comment Share on other sites More sharing options...
larrygator Posted January 25, 2013 Share Posted January 25, 2013 There appears to be a loophole here. Correct me if I'm wrong but since the developments become the state's property, that means that it is the state's job and not Hart's company's to maintain the installment since they don't own it. Um, NO! Link to comment Share on other sites More sharing options...
crazywolf88 Posted January 25, 2013 Share Posted January 25, 2013 ^ Well, the deal has gone back to total crap yet again. I still find it interesting how Hart agreed to that. Was there an "I own your soul" thrown in there as well? Link to comment Share on other sites More sharing options...
thepoint4life23 Posted January 25, 2013 Share Posted January 25, 2013 I Will Like to take a trip out in 2014 to check it out and get on the rides before they are gone for good Link to comment Share on other sites More sharing options...
ArundelHigh Coasters Posted January 25, 2013 Share Posted January 25, 2013 Lol, it looks this thread has to have the "Six Flags" out of the title. Link to comment Share on other sites More sharing options...
3Mutts Posted January 25, 2013 Share Posted January 25, 2013 ^ Not yet, it could still be canceled (cough*Bluegrass Boardwalk*cough). I wouldn't rename the thread till we see restoration/demolition work on the site. Link to comment Share on other sites More sharing options...
jps294 Posted January 25, 2013 Share Posted January 25, 2013 I Will Like to take a trip out in 2014 to check it out and get on the rides before they are gone for good Im planning on doing the same! Link to comment Share on other sites More sharing options...
John Peck Posted January 25, 2013 Share Posted January 25, 2013 I wonder how similar this deal was to the original deal Hart had back in 1990. Link to comment Share on other sites More sharing options...
larrygator Posted January 25, 2013 Share Posted January 25, 2013 Lol, it looks this thread has to have the "Six Flags" out of the title. Point taken and the title has been fixed. Link to comment Share on other sites More sharing options...
nannerdw Posted January 26, 2013 Share Posted January 26, 2013 I was excited for the park to reopen... but then I remembered that it was SFKK, home of the United States only SBNO Shuttle Loop. I was excited for the park to reopen... but then I remembered Chang in already gone. Link to comment Share on other sites More sharing options...
larrygator Posted January 26, 2013 Share Posted January 26, 2013 Here is another article from the Indianapolis Business Journal that provides a little more insight, particularly into the required investment over the next 3 years. In my opinion, the terms of the contract are clearly slanted in favor of the fair board for the first couple of years and rightly so. The onus will be on Ed Hart to execute the plan and his real payout is going to come after the first three years if the park is successful. If it is a flop and Hart's company goes bankrupt before a turnaround the fair board ends up with an upgraded park and goes through the process of finding a new developer to take over. This guy made the park a success years ago and believes he can do it again or else he would not have agreed to a plan that provides no venue for getting rich quick. http://www.ibj.com/kentucky-fair-board-group-reach-amusement-park-deal/PARAMS/article/39210 Kentucky fair board, group reach amusement park deal Associated Press January 24, 2013 A group of private investors and the Kentucky State Fair board on Thursday reached a 50-year lease agreement for the shuttered Kentucky Kingdom amusement park with the new operators saying the facility should reopen in 2014. The investment group, led by former park owner Ed Hart, pledged $20 million upfront and a promise to secure another $25 million in a loan to restart the state's largest amusement park. "Barring an act of God, we're ready to go," Hart said. The fair board-owned park, a regional summer fixture for years and a big employer of seasonal teenage workers, has been closed since 2009, when Six Flags walked away from its lease while undergoing bankruptcy reorganization. Since then, multiple plans and attempts to jump start the park fell apart. The lease is the first step in getting the park reopened. The investors, including Hart, businessman and former gubernatorial candidate Bruce Lunsford, businessman Ed Glasscock and the Al J. Schneider Company, must finalize the bank loan and get tourism tax credits from the state. Those credits are expected to be approved within 90 days, Hart said. The Louisville Convention and Visitors Bureau pledged $100,000 a year for five years toward the re-launch, the city of Louisville is granting the park $200,000 in cash and tax credits for a decade and the state is considering tourism tax credits. The park operators are required under the lease to spend $13 million in 2013 and 2014 to get the park open. The group must spend another $7 million on the park through the 2016 season. From 2017 on, the group is required to spend at least $1 million annually on the park. Under the terms of the lease, the fair board will become owners of any new rides or attractions placed at Kentucky Kingdom. Fair Board President Ron Carmicle said the lease for the public-private partnership means taxpayers won't have to shoulder private debt and gives the operating group a chance to succeed. "This lease agreement is a fair deal for both our state taxpayers and for the investors seeking to operate the park," Carmicle said. Hart said the financing essentially leaves the park debt-free. "This allows us to take our cash and put it into the park," Hart said. Hart said the operating group will move quickly to refurbish the rides and expand some attractions, such as the water park and plans to begin assessing the grounds early next month. All but one ride, a metal roller coaster that is in disrepair, will be reopened, Hart said. Hart pledged to make Kentucky Kingdom competitive with Holiday World, in Santa Claus, Ind., and Kings Island in Cincinnati. Hart said Kentucky Kingdom admission would be "priced aggressively" to draw tourists not only from Kentucky, but also Tennessee and Indiana. Hart wouldn't give specifics on expected attendance, but said more than 1 million people should pass through the gates annually after the first three or four years. "I think the pent-up demand for this park is just extraordinary," Hart said. The lease announcement drew praise from city and state officials. Gov. Steve Beshear called the lease a "shot in the arm" for local and regional tourism." Beshear and Metro Councilman Jim King expressed hope that the roughly 1,000 full-time and seasonal jobs the park brought to the area will return. "The Kingdom is one of the keystones to our city," King said. Link to comment Share on other sites More sharing options...
simaticable Posted January 26, 2013 Share Posted January 26, 2013 All but one ride, a metal roller coaster that is in disrepair, will be reopened, Hart said. Well, that pretty much confirms Greezed Lightnin's removal. Link to comment Share on other sites More sharing options...
lilsam1993 Posted January 26, 2013 Share Posted January 26, 2013 In a radio interview today, Hart mentioned that he plans on adding MAJOR NEW RIDES annually. Even though the lease agreement says he has to spend over 1 million in new improvements annually, Ed Hart said don't expect that at all. He's going to spend MORE than that in fact. This isn't sounding good for the Koch family. Link to comment Share on other sites More sharing options...
Yamez Posted January 26, 2013 Share Posted January 26, 2013 In a radio interview today, Hart mentioned that he plans on adding MAJOR NEW RIDES annually. Even though the lease agreement says he has to spend over 1 million in new improvements annually, Ed Hart said don't expect that at all. He's going to spend MORE than that in fact. This isn't sounding good for the Koch family. You're forgetting a few things: 1) The success for this park will rely on Ed Hart's ability to get the park back into usable shape. People will not flock to a trashed up park when Holiday World is only a few hours away. 2) KK hasn't been open or upkept for several years. The market may not respond as favorably as Ed Hart would hope, and many customers may be more impressed with what Holiday World has offered in the years that Kentucky Kingdom has been closed. 3) If Ed Hart's company ends up going bankrupt in the deal, you're basically back at square one. You may even have a situation (heaven forbid) like Hard Rock Park did where the ride companies are looking for money - the state would have to either pay that or give the rides back. Then you'd also have to deal with the fair board again and find a new investor for a park that just went bankrupt. Odds are not good here. 4) The park has to open first for it to even be considered a threat to Holiday World. 5) While Holiday World saw a nice boost in attendance and profits when Kentucky Kingdom closed, they were doing just fine when they were open as well. Don't get ahead of yourself. This park has a long way to go. Link to comment Share on other sites More sharing options...
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