Six Flags May Sell Its Magic Mountain Park

The Valencia site, one of six properties that the company may divest, could be dismantled.[INDENT]June 23, 2006

Six Flags Inc. said Thursday that it might sell its Magic Mountain and Hurricane Harbor amusement parks in Valencia and raised the possibility that they could be dismantled for real estate development.

Facing mounting losses and declining attendance, Six Flags wants to reduce its $2.1 billion in debt by selling parks in Buffalo, N.Y.; Denver; Seattle; Houston; and Concord, Calif., in addition to Magic Mountain.

After a proxy battle last year that saw Washington Redskins owner Dan Snyder win control of Six Flags and install new managers, the New York company is changing its thrill-ride focus to family entertainment.

[highlight]
Unruly behavior by the teens, have driven families away from the theme park, Shapiro said.[/highlight]

"Once you burn Mom, she is not rushing back," Shapiro said.

Throughout Six Flags' 30 amusement and water parks, [highlight]Shapiro said he wanted to reduce the company's reliance on "teens that drive our security problems … who loiter in the park, hate my no-smoking policy and don't spend money."[/highlight]

Though Six Flags could invest in Magic Mountain to transform it into a family-style park, Shapiro noted that the Southern California market was already crowded with family attractions, including Walt Disney Co.'s two parks in Anaheim, Knott's Berry Farm in Buena Park and Universal Studios Hollywood.

In evaluating which parks to sell, Shapiro also looked at whether they were on valuable real estate. Shapiro said the sales would have to garner more than $500 million to be worthwhile.

Buildable parcels in Valencia sell for $750,000 to $1 million an acre, said Michael Adler, president of Adler Realty Investments Inc. in Woodland Hills.

The potential for converting the 250-acre parcel into homes and retail centers would have developers "lining up to bid," Adler said.

"This would be a great opportunity for a mixed-use development," said Adler, who has a 150-home development underway in Valencia.

"I would be a bidder."

The property could be worth $200 million or more, depending on whether it continues as an amusement complex or is redeveloped, according to theme park and real estate executives.

Shapiro said the property could also remain a theme park. He said another operator might be more comfortable with Magic Mountain's thrill-ride niche and the teenage behavior that comes with it.

Magic Mountain attracts 2.5 million to 3 million guests a year and is considered a profitable property, said John Cora, a theme park consultant and CEO of Palace Entertainment, which owns Raging Waters in San Dimas and the Boomer's chain of family entertainment centers.

"With a little TLC and investment, it would be a great park and a great revenue producer," Cora said.

Potential bidders could include private equity investors such as Blackstone Group, which owns the four Legoland properties and has a stake in the Universal Studios theme parks, Cora said.

But coaster enthusiast Eric Gieszl of Tustin doubted that another operator could compete with the real estate bidders.

"They would have to pay too much and would never recoup their investment," said Gieszl, who operates the website Ultimate Rollercoaster.com. "This looks like a loss for L.A. coaster fans."

http://www.latimes.com/business/la-fi-sixflags23jun23,0,5107470,print.story?coll=la-home-headlines
[/INDENT]