Expansion on a winning theme
Bristol, Conn., might seem an unlikely place to find Potato Patch french fries, until you consider that the nation's oldest continuously operating amusement park is owned by Kennywood Entertainment Co.
In June, Kennywood revealed it acquired nearly 50 acres in Duquesne adjacent to the park in West Mifflin -- land that could result in new roller-coasters and possibly an indoor water park.
But expansion at its existing parks isn't enough to guarantee the company's long-term growth, its family ownership group has concluded.
Kennywood's top executive says the company's successful experiment over the past 10 years with Lake Compounce Park in Connecticut serves as a model for future acquisitions that will increase the company's scale in a rapidly consolidating industry.
With amusement industry behemoths like New York-based Six Flags Inc. and Sandusky, Ohio-based Cedar Fair L.P., rolling up the amusement park industry, acquiring parks across the country, Kennywood officials know that standing still is not an option.
Visits to the company's Kennywood and Idlewild theme parks and Sandcastle water park are ingrained rites of summer in Western Pennsylvania.
But most are unaware that Kennywood's family-oriented approach to the amusement industry -- one that balances an assortment of thrill rides with a clean, landscaped, walkable park that doesn't forget smaller and older patrons -- has been transplanted to Lake Compounce, which debuted to the public in 1847.
Lake Compounce appeared doomed at different times over the past 20 years, and managed to open for just a few days during several seasons in the mid-1980s and early 1990s, enough to keep its title as the nation's oldest operating park.
With $18 million in loans from the state of Connecticut and an equal amount invested to date by Kennywood since buying the park in 1996, Lake Compounce has stabilized and grown.
Pete McAneny, Kennywood's president, said that with Lake Compounce's lessons learned, the company has "actively pursued" about four deals to either acquire family theme parks, or to build new water parks, in the past three years.
It was recently on the verge of an agreement to build a water park in a New England town he declined to identify, but he said the deal fell apart at the last minute due to resident opposition.
"Our shareholders, while they're all family members, they have the same aspirations to grow their company that anybody else would," he said.
Kennywood has been owned for over a hundred years by members of the Henninger and McSwigan families.
McAneny said there are fewer independent parks around today after publicly-owned companies like Six Flags, which operates 30 parks across the country, and Cedar Fair L.P., which owns seven amusement parks and five water parks, including Cedar Point and Geauga Lake, have consolidated the industry.
Cedar Fair has been profitable, but Six Flags has struggled. Last month it hired an investment bank and put itself up for sale as it defends itself from a takeover attempt by Daniel Snyder, owner of the NFL's Washington Redskins., a minority shareholder. Its Six Flags over New Orleans park is under water following the flooding caused by Hurricane Katrina.
Industry analysts have said new owners could sell some parks.
McAneny said there are other acquisition opportunities that still exist.
He said Kennywood would not build a new amusement park from the ground up, due to the huge capital costs. The Lake Compounce deal is a good model for future acquisitions, he said, because it combined a park in a solid market with good infrastructure, and a public partnership.
Bill Childs, a law professor and theme park enthusiast who lives in Massachussets, said Lake Compounce is similar to Kennywood.
"Kennywood, and some of (Compounce's) other past owners have done a nice job of updating the park with some modern rides, but keeping and maintaining some lovely old ones ... as well as maintaining some of the older-style atmosphere," he said.
Where Kennywood rests on a bluff in West Mifflin overlooking the Monongahela River and U.S. Steel Corp.'s Edgar Thompson Works on the opposite shore, Lake Compounce is nestled alongside a mountain and its eponymous 26-acre lake.
A circa-1911 trolley that trundled to the park from nearby towns nearly a century ago was borrowed from the local museum and restored to service on an 1,800-foot track built by Kennywood to carry passengers along the lakeshore between the park and picnic grounds.
"The setting is beautiful, even more so than Kennywood," said Kennywood spokeswoman Mary Lou Rosemeyer.
Hershey Entertainment, a division of the nonprofit Hershey Trust that operates Hershey Park and other entities whose profits support the Milton Hershey School, and a local car dealer bought Lake Compounce in 1985. The partnership spent $22 million to upgrade aging infrastructure and add new rides.
But according to the National Amusement Park Historical Association, the park renovations hit contrsuction delays and missed its attendance goals in the three years Hershey was involved.
McAneny said Compounce's limited operations in the early 1990s meant that Kennywood would have to rebuild the attendance base nearly from scratch.
Kennywood immediately identified the park's mountain as the perfect spot for an attention-grabbing thrill ride.
"We looked at that hillside and thought, what a great theme that could be," McAneny said.
It constructed the Boulder Dash roller coaster to take advantage of the park's natural topography as Kennywood does with its coasters dropping into ravines.
It's credited as the best wooden coaster in the country by Amusement Today magazine.
McAneny said he wasn't daunted when Six Flags bought another small family park 60 miles to the north in Springfield, Mass., and spent $250 million to turn it into a mega-park with giant steel roller-coasters, like Superman Ride of Steel.
"It was clear we weren't going to outspend them. We were going to be the family park that caters to corporate summer picnics," he said, rattling off the names of companies like Pfizer, General Electric and Aetna that host picnics at Compounce.
