January 17, 2013
As we come close to the one year mark since the Greene County Legislature voted to approve the infrastructure necessary for the water park, we wanted to give an update of the status. Within two weeks of the Legislature’s vote in February 2012, there was an announcement that Apollo Global Management (www.agm.com ), a large private equity fund, had made an offer to buy Great Wolf Lodge. The announcement was made that Apollo had tendered an offer of $5.00 per share. Given that the offer was 19% higher than the stock had closed at on the day prior to the announcement, the Greene IDA saw this as positive reinforcement that Great Wolf was not only a viable but also undervalued firm. Within days of Apollo’s offer, it was made public that another equity firm called KSL Capital Partners had made a counter offer higher that Apollo and the Great Wolf board of Directors was considering both bids. After 4-6 weeks of back and forth counter offers by Apollo and KSL (www.kslcapital.com ), Apollo prevailed and acquired Great Wolf at a price of $7.85 per share, substantially more than their original offer and more than double what the stock had been trading at less than 6 months before the acquisition. Upon the acceptance of Apollo’s offer, all of the outstanding shares of the stock were acquired and Great Wolf Lodge was taken from a publicly traded company to private and it was no longer listed on the stock exchange. Apollo Global Management is a major equity group, and they are publicly traded. Apollo had in excess of $85 billion in assets at the time of the initial offer for Great Wolf and as of late 2012 had increased their portfolio to over $126 billion.
While the IDA welcomed the sale of Great Wolf Lodge as it demonstrated value and growth potential as well as new ownership that has significant financial resources, we also acknowledged that the sale would delay the process of expanding the Great Wolf brand with the addition of the New Baltimore facility. Standard practice when this type of acquisition occurs is for the new owners to focus first on restructuring to squeeze out more profit from existing facilities, then using their substantial financial position to refinance any outstanding debt associated with the new acquisition and finally moving forward with an expansion strategy. At the time of the sale I estimated that it would result in a delay of 9-12 months perhaps more as Apollo learned more about the operations of Great Wolf and was in a position to move forward. Many times in these situations the new owner will make changes in leadership at the newly acquired company but in this case Apollo essentially kept the Great Wolf Lodge corporate team in place. Just before Christmas (2012) I had the pleasure to have a conversation with Kim Schaffer, the Chief Executive Officer of Great Wolf Lodge. Our conversation confirmed my assessment of the reasoning behind a delay in action. Ms. Schaffer expressed her compliments to the IDA and Greene County Legislature and more importantly confirmed their continued interest in the project. Schaffer indicated that they were now actively working on the necessary documents to allow our developer to once again move forward and was optimistic that this next step could be wrapped up by late January or early February. She also cautioned that activities that previously just required action at the Great Wolf level now also had to be reviewed and approved by Apollo.
As we have openly represented since the beginning, this project is highly complex and nobody diminishes the challenge the developer has to raise the necessary capital in this economy. While the IDA feels that many aspects of the project will insure its success, we do not control investor thinking so we will always caution that there is no deal until there is a deal. From my perspective, when I look at the check list of things a project of this scale needs to ever have a chance, we are extremely well positioned. We have cooperative communities; we have a completed SEQRA document, infrastructure commitments, traffic counts and most importantly a series of detailed financial assessments that are all overwhelmingly positive. It is not easy to be patient, but it is my experience that a year is a blink of an eye with this scale of development. It is also important to remember that even globally economies have been in shambles and the investor market has been all over the page. The IDA cannot control these uncertainties but can continue to do what we have done from day one and that is to stay on top of the project and make sure the deal is done the way we represented to the community.
I also want to remind you that no taxpayer funds have been expended to date outside some routine due diligence costs and as we represented none will be spent until we have iron clad agreement in place, including the developer’s demonstration that he has raised the necessary funds. I hope this update has been helpful and as always I encourage you as individuals or as groups to contact me for more information or clarification of any information.
Interim Executive Director
Since 2005, the Greene IDA has been working on the concept of a tourism destination based development in an area near Exit 21B (Coxsackie) of the NYS Thruway. The site and concept was initially selected based on an interest by Cabela's to develop a major retail center in the area. After an initial evaluation of the site’s resources and discussions with other potential tourism based industries, in 2007 the Greene IDA initiated a thorough review of the project under the State Environmental Quality Review Act (SEQRA). In June 19, 2008 the IDA adopted a formal findings statement based on a Generic Environmental Impact Statement (GEIS) that set forth a number of different development alternatives. These included the preferred plan to develop a destination scale attraction that would include a large nationally branded indoor water park, outlet retail and a number of other users. Regrettably, as the SEQRA process ended the economy took an unexpected turn and the project was placed on hold.
In 2009, the IDA initiated discussions with a private developer who sought to develop a major hotel water park feature to be operated by one of the leading national brands in the water park industry. MAR Holding LLC and the IDA assembled a highly qualified team of staff and consultants and since that time have been developing the proposal that is set forth on this website. The current concept calls for the development to occur on a 103 acre parcel that the IDA has under option. The first phase will include a 400 room hotel, 80,000 square foot indoor water park, an 18,000 square feet conference center and a number of amenities such as snack bar, restaurants (2) and game room.
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