December 12, 2007

Lake Compounce sold along with Kennywood

The Press website was down overnight so it never got updated. Here is what reporter Jackie Majerus wrote about the Lake Compounce sale for today's paper:

Lake Compounce, the nation's oldest amusement park, is changing hands again.
Parques Reunidos, the largest European-based amusement park company, is buying out Lake Compounce's parent company, Pittsburgh's Kennywood Entertainment Co.
The Madrid-based Parques Reunidos has vowed to "continue what we've already started," said Gerry Brick, general manager at Lake Compounce.
"They do like what we do. They're going to keep us going," said Brick. "Our goal is the same. It's still going to start with the guest service."
Lake Compounce , which was founded and run by the Norton family from 1846 until 1985, had a series of owners between the Nortons and Kennywood, which bought the mortgage notes in 1996.
After the Nortons sold the park to car dealer Stephen Barberino Sr. and other partners in 1985, the Barberino partnership sold controlling interest that year to the Pennsylvania-based Hershey company, which held it until 1988, when Milwaukee concert promoter Joseph Entertainment took it over. The promoter went bankrupt and bills went unpaid. Boston Concessions briefly ran the park and the Barberinos bought the mortgage.
Ownership lawsuits and tax problems plagued the park and in 1994, Funtime Parks of Ohio signed on before Funtime was bought up the next year by another firm. Court battles continued, Funtime managed Lake Compounce and the Barberinos, who owned the park completely, kept looking for a new partner until they found Kennywood.
The deal between Kennywood and Parques Reunidos includes Kennywood Park in Pittsburgh, Idlewild and SoakZone in Ligonier, Penn., Sandcastle Waterpark in Pittsburgh Story Land in Glen, New Hampshire and Lake Compounce.
The sale is expected to close in March and the parties have not disclosed the purchase price.
Brick said the European buyers like what they've seen at Lake Compounce, which is focusing on expanding its water attractions.
"They're excited," said Brick.
Now that the deal has been announced, Brick said he hopes construction can begin in the spring on the waterpark expansion.
Starting in the spring, said Brick, was his goal all along, but until the pending sale was announced, moving ahead on the expansion early next year was less than certain.
"I wasn't quite sure we were going to start it in the spring," said Brick, adding that he now feels confident that the expansion will move ahead.
The Madrid firm has more money than Kennywood, said Brick, and is excited about the plans for Lake Compounce and thinks the sale will be good for the park and the region because an expanded park will bring more people to the area. Buyout talks began in the fall, according to Brick.
"It started just after the season ended," said Brick.
The 48 full-time workers at Lake Compounce will stay on under the new ownership, said Brick.
"At all the parks, they're keeping the management team in place," said Brick.
He said the park had 1,300 season workers last summer.
"This is a good team. We want to keep the whole team intact," said Brick.
In a prepared release from Kennywood, company Chairman Harry Henninger said the "Kennywood experience" would continue and "nothing will seem different," even to park workers.
"In recent years, we've had talks with other operators wishing to acquire us, but Parques Reunidos is the first one to share our vision and philosophy," Henninger said.
In the same release, Richard Golding, chief executive officer of Parques Reunidos, said the Madrid company has "tremendous respect for the work of the Kennywood management team and are delighted to acquire such a quality organization."
Golding added, "They've built Kennywood Entertainment into an industry leader in family entertainment. We are anxious to continue the gold standard of entertainment they have established."
Parques Reunidos manages 61 amusement, animal and water parks in the U.S. and Europe, with total annual visitors exceeding 22 million and revenues exceeding $570 million, according to information released by Kennywood. With the "financial backing of the Candover investment fund, a private equity investor in London," the Madrid firm "approached Kennywood with a purchase offer as part of their plan to consolidate family entertainment venues around the globe," the information from Kennywood said.
Brick said he favors "slow growth." He said growing too fast isn't the best for customers because unexpected problems crop up, like not enough parking or not enough bathrooms.
"If you grow slow, you can take care of those while you're growing," said Brick. "I've pushed that our commitment to slow growth is the best route."
Lake Compounce drew nearly 700,000 visitors last season, said Brick. He said more than 30,000 people bought a season pass, with the average pass holder visiting the park three times over the summer.

Foreign firms buying up nation's oldest parks
The planned sale of Kennywood Entertainment Co. to Madrid-based Parques Reunidos next spring will put two of America's three oldest historic parks into foreign control.
Besides Lake Compounce, Pittsburgh-based Kennywood owns historic Idlewild Park in Ligonier, Penn. – the nation's third oldest park – and historic Kennywood Park in Pittsburgh, which ranks 17 th oldest nationally, according to the National Amusement Park Historical Association.
Kennywood also owns the 55-year-old Story Land in Glen, New Hampshire as well SoakZone, a waterpark companion to Idlewild in Ligonier, and Sandcastle Waterpark in Pittsburgh.
"I've got concerns about it being owned by a foreign entity," said state Rep. Frank Nicastro, a Bristol Democrat who serves on the city council and is a former mayor. "I know nothing of this corporation."
Nicastro said he was sorry to hear that Kennywood, the Pittsburgh-based amusement park firm that owns Lake Compounce, was being sold to the Madrid-based Parques Reunidos.
But Nicastro said he wasn't going to make a snap judgment. Many companies are owned by overseas interests, he said.
"We have to see what happens," said Nicastro. "I'm not going to jump to conclusions."
A $3.5 million state grant to pay for moving Mount Vernon Road to make way for a Lake Compounce waterpark expansion isn't yet approved, Nicastro said, but is on track.
"It's part of the bonding package," said Nicastro, who supported the grant when Kennywood sought the help.Nicastro said having the state spend money to move the road was a worthy investment when Kennywood promised a $15 million waterpark expansion. Now that the company is changing hands, Nicastro said, he wants to make sure the expansion is still in the works before the state makes final approval on the money.
"We need to know for sure," said Nicastro. "It was an agreement."
Parques Reunidos already owns Palace Entertainment Holding Inc., an American operator of water parks and family entertainment centers.

Hard to keep an old park in the family
When an amusement park is family-owned, it can be hard to resist a tempting buyout offer, according to Stretch Norton, whose family owned and operated Lake Compounce for more than a century.
Norton said he understands how it might have been tough for the Henninger or McSwigan family members, who own the privately held Kennywood Entertainment Co. to resist a buyout offer from Madrid-based Parques Reunidos, "You can't get a consensus of what to do," said Norton, when multiple family members are involved in making a decision.
Norton family members lived in California, Florida and New York in addition to Connecticut. "With our case, it was a lot of widows and they were concerned about finances," said Norton.Still, Norton said, "We lasted four generations at least."
Gerry Brick, general manager of Lake Compounce, said the sale originated with Parques Reunidos.
"They actually sought Kennywood out," Brick said, "Kennywood wasn't really in the market to be sold."
But Brick said the members of the Henninger and McSwigan families who own the privately-held Kennywood Entertainment Co. are largely removed from the park operations.
"Very few of the family members are involved with the park anymore," said Brick.
According to information released by Kennywood on Tuesday, the company has been a "closely held family business since F.W. Henninger and Andrew McSwigan purchased Kennywood Park from the Monongahela Railway Company in 1906."
The Henninger and McSwigan families, now in fourth and fifth generation, have remained owners for over 100 years, the company said.
"This has been a very difficult decision for members of the founding families, now numbering over 100 and residing all over the country," said Kennywood Chairman Harry Henninger in a prepared statement released Tuesday.
Henninger called the family's experience of managing Kennywood, expanding Idlewild and Lake Compounce and creating Sandcastle "a magical ride."
Norton's ancestor Gad Norton, a former state lawmaker, first opened Lake Compounce on the Bristol and Southington town line in 1846, making it the oldest amusement park in America.
The Norton family, sometimes alone and sometimes in partnership with another family, owned and operated Lake Compounce until they finally sold it in 1985 to the Barberino family, a local family with a car dealership empire.
After it was acquired by the Barberinos, the park went through a series of owners, many from out of state and some better than others. For a time, it was primarily a venue for rock concerts.
Many of the owners shirked their property tax obligations and some failed to make mortgage payments. Norton described it as "a lumpy few years."
State Rep. Frank Nicastro, a Bristol Democrat who was mayor when Kennywood bought into Lake Compounce in 1996, said he had a "fantastic working relationship with Harry Henninger," who was then president of Kennywood.
Early in his tenure as mayor, Nicastro said, he was forced with the choice of either foreclosing on the nation's oldest amusement park or figuring out how to collect more than $1 million in back taxes on the shuttered park. "That was a heck of a thing hanging over a new mayor," said Nicastro.
Nicastro said he collected some payments from a previous owner, but negotiated with Henninger to settle the bill. Henninger was as good as his word, Nicastro said, and a check arrived as promised.
"From that point on, there was never a problem," said Nicastro. "Their taxes were always paid on time. Ever since then, they've been a great corporate citizen. I can only hope that it continues that way."
Norton was happy, too, when Kennywood entered the Lake Compounce picture.
"They were park people," said Norton. He said the first thing Kennywood did was rip out the amphitheater, which had caused a lot of problems with neighbors. "That was just ruining the park," said Norton.
When he learned Tuesday that his beloved Lake Compounce was sold yet again, Norton said, "I'm surprised and I'm not surprised. I could see it happening."
Norton said all of the Kennywood owners might not be as dedicated to the amusement industry to the same degree.
"I just don't think their heart is really in it, has been in it, for awhile anyway," Norton said. The boom years of the amusement park business are in the past, according to Norton.
He said waterparks are cheaper to build, insure and operate than rollercoasters and other thrill rides.
The liability insurance to cover the thrill rides, Norton said, is "tough to handle."

Copyright 2007. All rights reserved.
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Anonymous said...

The amount of money that the Conveyance Tax will bring the City should be fantastic!

But unfortunately I give it 5 years and then Lake Compounce will all be new houses.

Anonymous said...

I completly disagree with your comment. It will be everything but houses, and continue to grow. Parques Reunidos is in it for the amusement park buissness, not for housing.

Anonymous said...

Will they be using illegal immigrants to staff the park?

Anonymous said...

Actually I think the park will just continue to grow. It's pretty much Connecticuts #1 theme park of any kind.

As to illegal immigrants staffing the park... are so sad.