By Russell F. Schimmer
The proposed and publicly disclosed business plan for the Flagpole of Freedom Park is shockingly vague given its potential disruption to Washington County’s coastal region. The projected six million new visitors and $540 million in annual revenue seem more aspirational than what likely is feasible. More simply put, Flagpole proposes that it would attract one-quarter of the number of visitors to Walt Disney’s Magic Kingdom Theme Park in Florida, ranked first by attendance for theme parks globally in 2019.
What if Flagpole fails? What is the exit plan? How do you compensate for all of the disruption to the region?
And if Flagpole does survive as a business, then for how long and at what real costs and benefits to local communities? How do you deal with all the congestion on the limited main roads, as well as the opportunity costs to residents and businesses as a result of the congestion, both during construction and after opening?
The business proposal does not even indicate whether the park is intended to be open year-round. And if not, how can the economic impact and revenue numbers presented, particularly those for visitor spending, be justified? And what are all those newly created job holders supposed to do in the off-season?
The proposal provides no details of how these numbers were calculated—it’s a head scratcher trying to understand how one gets to 6 million overnight visitors spending roughly $540 million annually.
If Flagpole’s business plan is based on theme parks in the southern states, where tourism is year-round, then please demonstrate how visitation and revenue projections of year-round theme parks can be compared with a theme park, that at best, might be profitable for four months a year. If we take a quick glance at theme/amusement parks in New England, few, if any, are open year-round.
What about historical tourism to Maine? The Maine Office of Tourism 2019 Annual Report, which is cited as a source in the Flagpole’s summary proposal, states that there were an estimated 22 million overnight visitors and 25 million day travelers within or to Maine during FY-2019. These estimates include non-tourists.
Examining the report’s details, the summer months saw the majority of this activity with about 12 million overnight visitors and 17 million day travelers. The report further estimates that about 7 million of all visitors traveled to the Downeast and Acadia region. This means that, for Flagpole to have the economic impact it proposes, resulting in the additional tax revenues of $27 million annually, then the theme park will need to entice 6 million new visitors per year, essentially twice as many total visitors than those who visited the Downeast and Acadia region during Maine’s landmark tourist year in 2019.
Turning to a financial report published in October 2019 by Six Flags Entertainment Corporation, “the world’s largest regional theme park company and the largest operator of waterparks in North America,” the company operated 27 parks across the United States, Mexico and Canada in 2019. That year, Six Flags reported revenue of $1.5 billion (net income of $334.6 million) based on 33 million guests across its 27 parks, all of which are in high-population density locations and some of the biggest metropolitan areas in North America. In 2019, Six Flags also reported employing 52,000, of which 2,100 were full-time.
If we compare Six Flags’ 2019 financials to Flagpole’s projections, Flagpole, at some undisclosed point in the future, expects to generate visitor spending of $540 million while creating 7,350 jobs regionally. Hence, Flagpole, a single theme park in rural Maine, expects to generate 36 percent of the annual revenue that Six Flags does from its 27 parks located in some of the most densely populated locations in North America. Moreover, Flagpole will create regional employment equating to 14 percent of the total employed directly by Six Flags across its 27 locations.
What business-prudent or fiscally responsible Washington County or state of Maine elected official could review and be reasonably persuaded that the economic impact numbers presented in Flagpole’s vague public disclosures to date are feasible? And what level of failure in due diligence to the taxpayers of the county and the state is being exercised under the beguiling notion that Flagpole could generate $27 million a year in added tax revenue? If Flagpole is to be considered as both feasible and beneficial to the region and state, then let better-documented financial projections speak for themselves.
Russell Schimmer of Jonesboro is founder and CEO of SIAS Global.