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Six Flags retains Magic Mountain

January 12, 2007|Alana Semuels | Times Staff Writer

Magic Mountain's corporate roller-coaster ride is over for now: The Valencia theme park is no longer for sale.

Park owner Six Flags Inc. announced Thursday that it had sold seven of its 30 theme parks and water parks -- but not Magic Mountain, which local authorities feared would be sold as real estate.

"It became abundantly clear to us that this is going to be a great season," Six Flags spokeswoman Wendy Goldberg said. "This is not the time to sell Magic Mountain."

New York-based Six Flags, which said in June that it would try to sell some of its 30 parks to repay debt, announced the sale of seven properties for $312 million. Its stock jumped 47 cents, or 8.66%, to $5.90, on the news Thursday.

Local authorities expressed relief that Magic Mountain, which generates more than 3,000 jobs for the region, will stay put.

"This is good news for the companies who are tied to the hospitality and tourism industry and for the many vendors who supply them with everything from soft drinks to uniforms and towels," said Larry Mankin, president and chief executive of the Santa Clarita Chamber of Commerce. "It was the right thing to do."

Mankin also said city discussions to rename Magic Mountain Parkway, an idea that rankled the theme park owner, had been dropped.

Six Flags sold the seven parks to Jacksonville, Fla.-based PARC 7F-Operations Corp. PARC simultaneously sold the parks to CNL Income Properties Inc., which will then lease the parks to PARC under a 20-year lease, with the option to renew.

CNL spokeswoman Carolyn Gosselin said the seven properties, which are located in Buffalo, N.Y., Denver, Houston, Seattle, Oklahoma City and Concord, Calif., would continue to operate as theme parks.

"We believe there is great opportunity in these parks," she said. "We have contracted with park management to return them to their original glory."

Six Flags has been trying to return its parks to their former glory as well, under new management. Former ESPN executive Mark Shapiro became chief executive in December 2005 after Washington Redskins owner Daniel Snyder won a proxy battle that resulted in the ousting of previous management. Shapiro has vowed to make Six Flags parks more family-friendly.

Marketing deals with companies such as Papa John's International Inc. and Home Depot Inc. make Magic Mountain an important part of the Six Flags portfolio, said Jeff Putz, chief editor of Coasterbuzz.com, an industry website.

Analyst opinion about the sale was mixed.

Although the $312 million in proceeds from the sale will help the company ease its "bloated" balance sheet, Six Flags originally expected $750 million when it first announced it would explore the sale of the parks, said Katherine Styponias, an analyst at Prudential Equity Group.

She speculated that the firm might be holding onto Magic Mountain until the park began to perform better and then would sell it for a higher price.

But David Miller, an analyst and managing director at Sanders Morris Harris in Los Angeles, said the company made the right call in keeping Magic Mountain.

This is especially important in a region with many families looking for an alternative to Disneyland, he said.

"Los Angeles still doesn't have that many day consumer-oriented theme parks," he said. "There's more than enough room in the market."

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alana.semuels@latimes.com

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