Between A Hard Rock And A Soft Economy
The drama over the Hard Rock Park in Myrtle Beach, S.C., came to an abrupt end Jan. 6 when a bankruptcy judge approved the theme park’s liquidation.
What had been the world’s largest rock ’n’ roll theme park featured attractions including roller coasters inspired by Led Zeppelin, Moody Blues and Eagles, but just couldn’t bring enough fans through the turnstiles.
The Chapter 7 bankruptcy was a sign of the economic times. Private equity investors put up $70 million and raised another $330 million in debt to fund their vision, according to the Wall Street Journal, but Hard Rock Park opened just in time for the economy to go bust.
“Only in 2005 or 2006 could you raise this type of financing without some reasonable assurance that the business plan could work,” one expert told the paper.
Since opening in April, the park reportedly generated only $20 million in ticket sales, well short of some $24 million in annual interest payments, let alone operating expenses. In court filings, Hard Rock International said the park damaged its reputation and asked the bankruptcy judge to void its licensing deal and force the park to return memorabilia including a Madonna costume and Garth Brooks cowboy hat.
Hard Rock Park’s September closure sent a ripple across the country to a nearly identical project that lacks the failed venue’s tourist cachet and name identification.
Decades, a rock ’n’ roll theme park planned in Eloy, Ariz. – between Tucson and Phoenix – and backed by local real estate developers, needs $100 million in seed money to get access to government-issued bonds just to break ground. And that money seems to have dried up like a puddle in the Sonoran Desert.
Arizona Gov. Janet Napolitano signed a legislative bill in September approving the project, but that was then. Now, state officials are openly doubting the park will ever break ground.
The failure of the Hard Rock Park just three months after Arizona legislators approved the funding bill for Decades was a dark omen for the future of the $800 million project.
“Ultimately, it’s never going to be built,” said State Sen. Ken Cheuvront of Phoenix, who opposes the project. “In this economy, the financing is impossible for a theme park out in the middle of nowhere. It’s crazy to begin with.”
Supporters remain guardedly optimistic. Eloy Mayor Byron Jackson said it might take a decade for Decades to become a reality. “There’s just so much involved,” he said.
And while the economy is putting the skids on startup projects like Decades, experts say the theme-park business as a whole is managing to hold its own.
“People still fundamentally have a need for family entertainment and the escape that an amusement park provides,” David Mandt of the International Association of Amusement Parks and Attractions told the Arizona Daily Star. “Now, maybe more than ever.”
But the clock is ticking for Decades. The law allowing government bonds to be issued expires in 2016.