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09 October 2007

Great America owners put foot down

So now it appears that Cedar Fair, the owners of Great America, don't want to play ball. They've come out against the 49ers stadium concept on the lot north of the theme park, a stiffening of their need-more-info stance of a few months ago. Links:
Wire services and others have picked up on an idea that 49ers spokesperson Lisa Lang has put out there: the 49ers may be interested in buying Great America to make the stadium work. Certainly it sounds interesting on the surface, but there probably isn't much to it. Here's why:
  • Cedar Fair has already said it isn't interested in selling. The company only bought the portfolio of theme parks from Paramount a little over a year ago. A look at recent press releases shows that the newly acquired parks have underperformed relative to Cedar Fair's other properties. Cedar Fair notes that they've only begun the transition phase to bring the Paramount parks in line with their regular operations model. This is all part of a long-term strategy. You'd think they'd want to give Great America a shot at raising its performance before it gives up on Santa Clara. After all, it is their core competency. Of course, Cedar Fair's statements are pure PR-speak and should be taken with a grain of salt, but it still makes sense in the end.
  • How much would Great America be worth? The Paramount portfolio was acquired for $1.24 billion. That's 5 parks. One article notes that the land's assessed value is $114 million but that's virtually meaningless. The 49ers would be buying the whole kit and caboodle. A more realistic estimate would be 1/5th of the portfolio, or $240 million. But the land is owned by the city, not Cedar Fair, so it could be worth less. So what is a fair price? And then what would happen after it's sold? The 49ers would have to turn around and have someone operate the park since that's not what they do. Would they want to develop some portion of the land to recoup their investment? Even if Cedar Fair were playing hardball to secure a good price for their investors, they're in a position that gives them leverage. They're not in an apparently desperate position in which they're hemorrhaging cash. Note: Stock gains from the months following the acquisition have been wiped out as Cedar Fair reported the recent drag on the company's performance from the Paramount parks.
One good thing may have come out of this: the Niners are now open to building on the overflow lot across from their team headquarters. That lot would be far more compatible for both parties than the planned site. On the other hand, the following item sounds distressing:
Bottom line, Lang says: "There are a number of site configurations (Cedar Fair) could look at if they are serious about wanting to go forward with the project."
It's a bad sign when most of the so-called negotiations are occurring through the media. Is the city supposed to shepherd this through? It's hard to say.
To add intrigue to the situation, former 49er President Carmen Policy is signing on with the SF/Lennar effort to pitch a stadium at Hunters Point.

6 comments:

anthony dominguez said...

I've said this once before and I'll say it again...San Jose should be pursuing the 49ers, not Santa Clara! San Jose's FMC parcel would be a much better fit for an NFL stadium, rather than MLS. It is sandwiched nicely between 101 and 880 and right next to Caltrain and future BART. Lew Wolff should join forces with John York and make this happen. In return for San Jose getting the Niners a prime plot of land and state of the art football stadium, the helmut becomes "SJ"...did I mention San Jose has nearly (if not already) 1 million residents, vs. San Francisco's 780k and Santa Clara's 200k. Hopefully someone with influence is reading this blog...YOUR SAN JOSE FORTY NINERS!!

BleacherDave said...

Why iis the number of SJ residents relevant?

Jeffrey said...

Good question.

The NFL is probably less dependent on the immediate areas surrounding population I would think.

I bet the 49ers could go to Sacramento and still make bushels of money.

BleacherDave said...

jeffery,

Define the "local" in local area population. How dependent is the NBA?

Jeffrey said...

I didn't say local. Or actually write local. I wrote immediate surrounding area. Which I guess is semantics!

I would reason that MLB is the most dependent on a high "local" population. With the NFL (or NASCAR if you are into such drivel) having the least dependency on a huge local population.

For 2 reasons:

1. The stadiums hold twice as many as NBA stadiums (roughly).
2. The teams play twice as many home games.

It probably depends a lot on the market though.

For instance, in Kansas City, local is actually much larger, in terms of a radius of miles from the stadium, than in say San Francisco because of transportation and density.

Which is why transportation is important to the Fremont site (or any site in the Bay Area), from the A's perspective. The A's will have to address traffic and parking in order to accommodate 30 thousand fans 81 times a year getting to and from the stadium mostly in cars.

How would you rank each sports need for a large "local" population?

Anonymous said...

Let's not forget that Anthony is, first and foremost; a San Jose cheerleader. He won't rest until all sports teams, landmarks, and public venues of any kind in the region either move to or are named for San Jose.

Names like "Silicon Valley" and "Bay Area" are just an annoyance to him.