SANTA CLARA — The Great America theme park’s final rides are in view now that one of the Bay Area’s biggest real estate developers has bought the land beneath the iconic Santa Clara amusement center for $310 million.
The beloved amusement park could shut as soon as six years from now — and by no more than 11 years from now — under the terms of a real estate agreement filed Monday with federal regulators that this news organization reviewed.
Prologis, a mega-developer whose specialties include industrial centers and logistics hubs, bought the land from Cedar Fair, which has been attempting to chop debt, including through asset sales such as the land deal in Santa Clara.
“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 Richard Zimmerman, chief executive officer with Cedar Fair.
CBRE, a commercial real estate firm, arranged the property deal, which will lead to the shutdown of the park in no more than 11 years, although the exact timing is unclear.
Under the terms of the agreement, Prologis paid $310 million to Cedar Fair to buy the land. Prologis simultaneously agreed to lease the land back to Cedar Fair.
San Francisco-based Prologis agreed to lease the land to the amusement park company for six years, according to the terms of a rental agreement that was sketched out in a Cedar Fair filing with the Securities and Exchange Commission on Monday.
Cedar Fair also has an option to extend the lease agreement with Prologis by up to five additional years for a total of as many as 11 years, the SEC documents show.
Some verbiage in the language of the rental agreement that was outlined in the SEC filing could point to an even shorter event horizon for the theme park before it shuts down.
“The lease is subject to a right in favor of Prologis to terminate the lease early by providing at least two years’ prior notice,” Cedar Fair stated in the SEC documents.
Ohio-based Cedar Fair is one of the nation’s largest operators of regional amusement parks. These businesses were devasted by the economic fallout from wide-ranging shutdowns ordered by government agencies to combat the coronavirus.
“Cedar Fair 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 company stated Monday.
Cedar Fair bought the land from the city of Santa Clara in 2019 in the wake of the dissolution of municipal redevelopment agencies orchestrated by the state government to help address a prior budget crisis.
Prior to the 2019 transaction, Cedar Fair had leased the land beneath the park for roughly 40 years.
Cedar Fair appears to have generated a hefty profit from the pending sale of the amusement park land for $310 million.
The assessed value of the parcels owned by a Cedar Fair affiliate, as of mid-2021, was $154.8 million, documents on file with the Santa Clara County Assessor’s Office show.
“The sale and lease agreements allow us to monetize a high-value asset in the heart of Silicon Valley at a very attractive multiple,” Cedar Fair CEO Zimmerman said in a prepared release.
Source: www.mercurynews.com