Magic Mountain Owner Seeks Package Sale
Six Flags Inc. on Friday sent potential buyers detailed financial information on six of its amusement parks, including Magic Mountain in Valencia, after signaling its intention to sell the properties in a single transaction.
When the New York-based company announced in June that it might sell the parks to reduce its $2.1-billion debt, it listed options including selling one or more to theme park operators or dismantling the attractions and unloading the properties to real estate developers.
But on Thursday, Six Flags Chief Executive Mark Shapiro said that he would like to sell all six parks as a package, reducing the likelihood that Magic Mountain and neighboring Hurricane Harbor water park would be picked off by a local builder eager to blanket the land with homes.
In an interview with Bloomberg News after ringing the closing bell on the New York Stock Exchange to mark a change in the company’s ticker symbol from PKS to SIX, Shapiro said Six Flags might keep the parks if it didn’t get a good enough price.
“The real estate angle might be overrated,” said Dave Omel, vice president of operations for Palace Entertainment Inc., a Newport Beach holding company for Raging Waters, Boomers and other entertainment centers. “If they did some work, these would be very viable theme parks.”
For example, Magic Mountain could benefit from improved marketing and operations that would “make it nicer and more family friendly,” such as implementing a dress code, Omel said.
Magic Mountain has a reputation for security problems and attracting rowdy teens. Shapiro has said he would like to make it and the company’s 29 other parks more attractive to families.
In addition to Magic Mountain, Six Flags hopes to sell properties in Buffalo, N.Y.; Denver; Seattle; Houston; and Concord, Calif. Keeping them bundled would ensure that the less desirable parks are sold. The buyer could operate some and resell others for real estate development.
Development makes the most sense to another industry expert.
“There’s very valuable dirt under some of these parks,” said Carl Winston, director of the hospitality and tourism management program at San Diego State University. “Certainly that’s the case at Magic Mountain.”
The land in Buffalo and Houston might have little potential for development, but the four other parks are in thriving real estate markets, Winston said.
Local developers have expressed interest in creating a mixed-used project on the 250-acre Magic Mountain site with housing, retail and perhaps office space.
Parcels near the Valencia site sell for $750,000 to $1 million an acre, making the land on that property alone worth $200 million or more.
Shapiro has said that when evaluating which parks to sell he considered whether they were on valuable real estate. He also has said that the combined sale price would have to top $500 million to be worthwhile.
Six Flags’ stock price fell more than 50% in the last six months but ticked up recently on Wall Street’s assumption that the properties looked good to builders, Winston said.
“My speculation is that some real estate developer is thinking, ‘Wow,’ ” he said.
Shares of Six Flags fell 6 cents to $4.99 on Friday.