Commercial Real Estate Blog

Cedar Fair, the owner of Great America Theme Park is reportedly asking north of $110 Million for the park and the land lease it has with the city of Santa Clara for the 181 acre parcel the park sits on. The annual minimum rent for the land lease is $5.3M and runs through 2039. At the same time, Cedar Fair is working to reduce the property’s assessment for tax purposed to $44M.

This is interesting because it highlights how the value of a property can vary so widely between buyers. To the 49ers, the deal represents an opportunity to get Cedar Fair out of the way on its march to getting a stadium to help the franchise increase its overall value. To any other party looking at the site, there are two basic options, a) taking over a theme park with declining revenue, or b) developing the site with only a 30-year window to recover their investment. Both options seem to be less than appetizing..

It will be interesting what sort of deal the parties can negotiate, if any, but it’s fairly clear right now that the 49ers don’t have to worry about to many other buyers jumping into the fray.

In a coup for Lennar Corp, San Francisco voters pushed through Proposition G and struck down Proposition F yesterday. Proposition G gave the green light to Lennar’s plans to develop a shipyard at Hunters Point and Candlestick Point. Proposition F would have required that a minimum of 50% of the housing portion of the development master plan be provisioned as affordable housing.

Proposition G encourages the city to support a development plan consisting of:

• over 300 acres of public park and open space improvements;
• between 8,500 and 10,000 homes for sale or rent;
• about 700,000 square feet of retail uses;
• about 2,150,000 square feet of green office, science and technology, research and development, and industrial uses;
• a possible arena or other public performance site;
• a site in Hunters Point Shipyard for a new stadium if the 49ers and the City determine in a timely manner that the stadium is feasible;
• additional green office, science and technology, research and development, and industrial space, and/or additional housing if a new stadium is not built.

Proposition F would have made it City policy to require:

• At least 50% of all new housing units developed in the project site would be affordable so that at least:
  • one-sixth of all units are affordable to households earning no more than 80% of the San Francisco median household income (SFMI);
  • one-sixth are affordable to households earning no more than 60% of SFMI; and
  • one-sixth are affordable to households earning no more than 30% of SFMI.

Of course, it should be noted that other hurdles remain in place before all this is built. Environmental reviews need to be conducted, a development agreement has to be crafted and approved by the City’s supervisors, and the project needs to pencil given the fact that Lennar will be responsible for a laundry list of items include site work, transportation upgrades, roads, and other infrastructure.