This story has been updated, with information from Prologis.
California’s Great America, which has thrilled guests in Santa Clara with its rowdy rides and festive functions since 1976, is expected to shut down within the next decade after its Ohio-based owner sold the land to a real estate developer.
In a June 27 press release, Cedar Fair Entertainment Company announced it sold the 112 acres the park sits on to San Francisco-based Prologis for $310 million. According to the press release, Cedar Fair will continue to operate the park for a period of up to 11 years and then will cease operations at the end of the lease term.
However, according to a filing with the U.S. Securities and Exchange Commission describing the transaction, the lease has a six-year term with an option to extend for another five years. San Francisco-based Prologis also has the ability to terminate the lease early by giving a two-year notice.
“We chose Prologis as our partner because of their deep ties in the Bay Area and their reputation for working closely with local communities on large developments,” Cedar Fair President and CEO Richard A. Zimmerman stated in a press release, adding that the deal gives the company a “substantial sum” to invest in its other properties.
According to the agreement, Cedar Fair, which also manages Gilroy Gardens in south Santa Clara County, will lease the land for $12,247,500 annually, with a 2.5% increase every year.
Cedar Fair purchased the land at California’s Great America in 2019 for $150 million from the City of Santa Clara after the State of California dissolved redevelopment agencies, requiring the city to cede its ownership of the property to pay off existing debt. Prior to that transaction, the company leased the land from the city.
In 2019, Zimmerman was quoted in a press release, citing the company’s “long-term commitment” to the park and its plans to “continue to focus on the development of California’s Great America.”
On Monday, company officials stated that the land sale was the “outcome of a strategic review initiated by Cedar Fair in 2021 to explore potential avenues to maximize the value of the company’s asset portfolio.”
Cedar Fair spokesperson Gary Rhodes said guests and employees “should expect no immediate changes at Great America from this transaction.”
“Going forward, we plan to roll out a full lineup of immersive entertainment, seasonal festivals, and culinary events as planned and for years to come, just as we always have,” he said.
Rhodes added that the lease structure is “nothing new to us,” as the park had been operated under a lease with the City of Santa Clara for most of its existence under different ownerships throughout its more than four-decade history.
“The sale and lease agreements provide us with a win-win scenario,” he said. “First, it allows us to monetize a high-value asset in the heart of Silicon Valley at a very attractive multiple and use the sale proceeds to invest in the long-term growth of the company. Second, we can continue to operate one of the most popular California entertainment destinations by leasing the property back over a period of years.”
Prologis owns and operates 62 buildings in Santa Clara County, according to the company, as well as many others worldwide.
“Prologis is excited to make this investment in Santa Clara,” the company stated in a press release. “As an experienced real estate company headquartered in the Bay Area, we know the community and local businesses well.”
Prologis spokesperson Jennifer Nelson said the company currently doesn’t have a plan for the future of the property, saying Great America will continue to operate under the lease with Cedar Fair.
“As we look past the lease expiration, we look forward to working with local government on the long-term plan, which we’ll do through collaborative discussions with the city and local community,” she said.
Santa Clara Mayor Lisa Gillmor said the city learned about the “surprise announcement” when the news broke on June 27.
“Great America is a beloved community asset and is the largest employer of our youth,” she said, adding that her first job in high school was at the park when it was known as Marriott’s Great America. “It's a devastating loss for the City of Santa Clara and the Bay Area.”
Gillmor noted that the city cannot comment on the economic impacts of the park’s closure, as it does not know the new property owner’s plans.
She invited Prologis to a series of community meetings to “share their vision for the Great America property,” and said the property is currently zoned for a theme park, with any changes subject to approval by the Santa Clara City Council.
“On the surface, it appears California's Great America will not change in the short term,” Gillmor said. “My hope and goal is to keep California's Great America there as long as possible in the long term.”
This is not the first time Cedar Fair, which purchased the park in 2006, has announced it sold Great America in recent memory. In 2011, the company was in talks to sell the park to JMA Ventures for $70 million. However, a few months later, the real estate investment firm revealed it had backed out of the deal.
Shortly after, Cedar Fair announced a capital improvement campaign that would renovate the park and upgrade its attractions over the next couple of decades.
The Santa Clara City Council OK’d Great America’s 20-year Master Plan in 2017 that included a rezoning of the 112-acre property to allow for new rides to be installed as well as expanded operating hours.
In 2018, the park opened RailBlazer, a first-of-its-kind single-rail roller coaster, and in 2021 finished a major expansion of its existing water park, renaming it South Bay Shores.
In 2021, Barb Granter, the longtime general manager of Gilroy Gardens, was named vice president of Great America.
Erik Chalhoub is editor of the Gilroy Dispatch, and has written extensively about amusement parks and roller coasters.
Wow, Cedar Fair, I don’t understand the reasoning behind the sale of that land. You sold for less than $1 million per 1/3rd acre? You just gave it away. As a quick example of the value, there are a lot of private citizens who would line up all day long to buy a 1/3rd acre residential lot in that area for $1M. And then build a nice single story home. I’m one of them. In fact, I would consider $1M for 1/3 acre a pretty good price for a lot to build on over there..meaning I’d pay more. So the fact that Prologis who is doing this purely for business purposes and is going to build a bunch of 10, 20, or 40 story or higher buildings there, which is FAR more profitable than single family detached homes, means that land is worth far more than $310 million. Try at the very least several billion $. I think the general public doesn’t understand how much income comes off a property in an area like this when you can build super tall structures for residential, commercial, etc. Sure, Cedar Fair is doubling their money after only 3 years owning this property, but when they bought it for $150million in 2019, they stole it from the city of santa clara. Everyone should be asking: Why didn’t private citizens get an opportunity to buy some of this land on the cheap?
Insider deal?
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What’s going to be sought for this site besides the super-dense housing demands?
@LYR, What’s going to be sought for this site besides the super-dense housing demands?
well it won’t be over-priced storage sheds marketed as “Tiny Homes”.
The area is adjacent to Levi Stadium and the small-ish Santa Clara Convention Center and several large hotels, and it seems like there will be almost a decade to make and change plans,
depending on how much further CA sinks into 3rd world status.
The Usual Suspects want more housing. Why no more jobs, who knows. They want more housing, less or no parking, and no more jobs. They’re witless or worse.
Will the county seek special housing, for those with particular needs, as with SAP Center one day as the Sharks and the arena are driven out by “higher and better uses of the land,” as the Usual Suspects would say?
“The Usual Suspects want more housing. Why no more jobs, who knows. They want more housing, less or no parking, and no more jobs. They’re witless or worse.”
Our county has a jobs/housing imbalance as it is. We have more jobs than we have places to house workers. That’s why housing is so expensive. We need housing.
We want more jobs yet we don’t want to house the workers who take those jobs, that doesn’t make sense. Of course, those who have made a killing off their housing investments (including my grandparents’ Cupertino house purchased in 1953 for $7,800) don’t want more housing because it may reduce the demand and lower their property values.
Jobs-housing balance is typically expressed at a municipal gradation, as it should be here, with Santa Clara, as in San Jose, and elsewhere that the jobs aren’t heavily weighted (southern Peninsula, west valley as in Cupertino).
Jobs with “housing” (lodging) would come with any new hotel by Levis Stadium, naturally tending toward the luxury end of accommodations and prices. The Usuals want housing, and the denser, the better — without adequate off-street parking or needed roadway improvements, for example, and no matter what’s built there, don’t look to governments necessarily to do the obvious and extend any new county transit system with trains, including the Diridon Station-airport connector or that plus a Stevens Creek route, north to Santa Clara and beyond to the Caribbean Drive (old Lockheed) area north of 237, or elsewhere that San Jose plans to do more development in addition to Santa Clara’s plans.