CNL Lifestyle Properties entered the amusement industry in 2007 with the acquisition of two Great Wolf Lodges – yet doesn’t operate a single one of its 24 park and FEC properties. Here senior vice-president and managing director Curt Caffey talks to Park World about the strategy behind what is now North America’s third largest park owner (by number of properties).
A real estate investment trust (REIT) based in Orlando, CNL recently appointed new operators for 16 of its park and FEC properties. Caffey’s previous industry experience includes positions with Silver Springs/Wild Waters, Weeki Wachee Springs, Volente Beach and Schlitterbahn Waterparks, as well as Ogden Entertainment. Here he talks to Park World’s Paul Ruben.
What attracted CNL Lifestyle Properties to the theme/amusement park business?
Since its inception, CNL Lifestyle Properties has been focused on investing in properties that have the potential for long-term revenue generation by meeting people’s needs for different experiences as they go through life. One of those is recreation and we have found that amusement attractions create an experience unlike any other, and that has made this sector attractive to us.
While this sector can have its ups and downs, just like the rollercoasters so many of our attractions feature, historically the amusement industry has performed very well economically. That is attractive to us and our investors. In fact, even during the recent tough economic times, we have found that families are willing to spend on creating lifelong memories, and one of the ways they are doing that is by attending our parks.
Our attractions portfolio currently stands at six regional theme parks, seven water parks, three water park hotels and nine FECs collectively valued at more than $500 million [E360m].
How have the properties you took over benefited so far?
We are committed to our investments for the long-term and as such we have invested a substantial amount of capital into each of our properties. Not only does this enhance our original investment, but it also helps our operators grow their business.
In some cases, we have also brought in new operators, who have had fresh ideas for the properties and the parks have benefited from those changes. We’ve also been able to create economies of scale with many vendors by using their products and services across multiple properties.
Why did you decide to go with multiple operators for the eight parks and FECS which recently got new managers?
We felt like there were very few organisations with the capacity to manage all of the properties, which literally stretch from one end of the country to the other and have a wide range of needs. We also felt that going with multiple management companies gave us the opportunity to diversify and strengthen our relationships in the attractions business.
How long does each lease last?
In the case of the eight properties you refer to, we have signed interim management agreements with those companies. We expect all of those managers to do an exceptional job at those properties and our intent is to eventually transition those management agreements to long-term leases.
What does each operator bring to the table?
Each of our operators brings recognisable strengths to the parks they operate. In some cases, the chosen mangers are returning to parks where their previous efforts to manage the parks were highly successful. In other cases, certain operators were chosen because they have geographical presence or advantages related to our parks. Additionally, other operators were chosen due to high levels of expertise in turning around parks and offering industry-leading operating strategies.
Are continual changes in ownership and management good for a park’s health?
Continuous changes are not good, because you need consistent ownership and management to help build long-term strategies, create synergies and develop relationships with the communities and the people the parks serve. That said, there are some benefits to change when the time is right. New managers can bring in new diversity and new ideas to the parks and help re-energise the parks and the communities.
CNL Lifestyle Properties generally finds more benefits from a long-term relationship and doesn’t expect regular changes in management at any of our properties.
Do you expect to make further park acquisitions in the months or years to come, either in the US or overseas?
We continue to have a strong interest in this sector, as evidenced by our recent acquisition of Pacific Park on the Santa Monica Pier. I do anticipate that there will be other acquisitions in the future, likely in the United States, but I can’t rule out foreign investment as well.
What is your exit plan?
As an investor in these assets, we have taken a long-term approach and don’t look to any of our individual properties with short-term ownership in mind. We are always looking for alternatives to maximise shareholder values.
CNL’s parks and partners
The investments of CNL Lifestyle Properties span over 150 ski and mountain resorts, golf courses, marinas, retired accommodation and attractions across North America. Its park and FEC (family entertainment centre) interests are detailed below, with the relevant operators in brackets.
Camelot Park Bakersfield, California (Amusement Management Partners)
CoCo Key Hotel and Water Resort Orlando, Florida (Sage Hospitality)
Darien Lake Buffalo, New York
(Herschend Family Entertainment)
Below: Darien Lake in New York
Elitch Gardens Denver, Colorado (Herschend Family Entertainment)
Fiddlesticks Fun Center Tempe, Arizona (Amusement Management Partners)
Frontier City Oklahoma City, Oklahoma (Premier Attractions Management)
Funtasticks Fun Center Tucson, Arizona (Amusement Management Partners)
Grand Prix Tampa Tampa, Florida
Great Wolf Lodge Sandusky, Ohio
(Great Wolf Resorts)
Great Wolf Lodge Wisconsin Dells
(Great Wolf Resorts)
Hawaiian Falls Garland, Texas (Harvest Family Entertainment)
Hawaiian Falls The Colony, Texas
(Harvest Family Entertainment)
Wet’n’Wild Hawaii (Village Roadshow)
Magic Springs and Crystal Falls
Hot Springs, Arkansas (Amusement Management Partners)
Mountasia Family Fun Center
North Richland, Texas (Amusement Management Partners)
Pacific Park, Santa Monica, California (Santa Monica Amusements) Splashtown, Houston, Texas
(Premier Attractions Management)
WaterWorld, Concord, California (Palace Entertainment/Parques Reunidos)
White Water Bay, Oklahoma City, Oklahoma (Premier Attractions Management)
Wild Waves & Enchanted Village Seattle, Washinton (NorPoint Entertainment)
Zuma Fun Centers Charlotte, North Carolina; Knoxville, Tennessee; North Houston, Texas; South Houston, Texas (Amusement Management Partners)
Below: Pacific Park at Santa Monica Pier, CNL’s most recent acquisition