Familiar Faces, New Places - March 2016

Three industry veterans form the new Apex Parks Group

by Mike Bederka

Apex Parks Group has made a steady ascent  to become a major player in the small-to-midscale space since blasting onto the scene. Led by three industry veterans and backed by a pair of private equity firms, the Aliso Viejo, California-based company acquired 14 family entertainment centers (FECs) and one water park from Festival Fun Parks LLC dba Palace Entertainment in fall 2014. They followed up the blockbuster move by adding another water park and a small amusement park soon thereafter.

“We’ve doubled the size of our company in scale in one year,” says Al Weber Jr., Apex’s president and CEO. “We believe we can do that again and again and again.”

Weber’s name probably sounds familiar. He held the titles of CEO for Paramount Parks and COO of Six Flags Entertainment, and between them, CEO of Palace Entertainment. It’s during his tenure at Palace that he got to know Apex’s other key players. Apex CFO Doug Honey cofounded Palace and served as that company’s CFO; Gregg Borman, former senior vice president of operations for Palace, holds the same title for Apex.

The idea of their new company crystalized several years ago, as the three began brainstorming their next career venture. They saw a hole in the FEC/water park/small amusement park landscape and viewed the Palace properties as the necessary jumpstart to consolidate that piece of the pie.

“We always thought there was tremendous opportunity in this segment of the industry. It’s an under-tapped and under-capitalized area, and there hasn’t been a buyer in this space for quite some time,” Weber explains. “Having worked for Palace for a number of years, we all knew the parks and their management teams well. We thought the business was running below pace, so we believed we could step in and put a concentrated focus on the FEC side.”

Rapid Growth

The negotiations with Parques Reinudos, Palace’s parent company, went on and off for about two years, Honey says, and Apex actually ended up with a smaller portfolio than it originally intended. Despite being well capitalized by Broad Sky Partners and The Edgewater Funds, Apex didn’t have the name recognition or the size of Palace, he says. The landlords had to consent to the lease transfers to Apex, and some balked at the deal.

Undeterred, the Apex team completed the transaction in September 2014, acquiring facilities across the United States. There were nine Boomers! FECs in California, plus one in Boca Raton, Florida. In addition, Apex picked up Malibu Grand Prix in San Antonio, Texas; Mountasia Family Fun Center (eventually rebranded as a Boomers!) in Houston, Texas; SpeedZone in Dallas, Texas, and Los Angeles, California; and Big Kahuna’s Water Park in Destin, Florida.

Business improved quickly, and excitement in the industry grew.

“I think we got an e-mail on day two of Apex’s creation from someone interested in selling,” Weber recalls with a smile.

Next for Apex came the April 2015 acquisition of Sahara Sam’s Oasis, an indoor/outdoor water park in West Berlin, New Jersey. A few months later, the company inked a deal for Indiana Beach Boardwalk Resort, a 90-year-old facility on the banks of Lake Shafer in Monticello, Indiana.

Bringing this well-known amusement park into Apex’s portfolio proved to be a particularly sweet addition, the trio agree. “[Indiana Beach was] ripe for a good turnaround,” Weber says. “We can polish it and get Indiana Beach back to where it once was. If you improve the product and the guest experience, of course you will become more profitable.”

Perfecting the Pricing

So far, a look at Apex’s numbers across the board helps to prove Weber’s assertion. Depending on the facility, revenue has increased 5 percent to 20 percent since Apex took over, Honey says. EBIDTA jumped, as well, with the goal to get every FEC up to $1 million (a few already have hit this mark).

“Overall, we’ve had a very good first year of operation,” says Honey, who notes Apex has particularly benefited from the economies of scale. The company centralizes most of the administrative functions of running a park, including finance, legal, and insurance, he says. Apex’s volume allows it to negotiate national pricing for things like food and beverage, as well.

Looking at the big picture, Apex completely changed the pricing model at all the venues, Borman says. Most promotions were removed, while any existing Groupons or other daily deals were left to expire; these decisions led to higher per-capita on attendance.

“Consumers knew if they waited just a little bit, there would be a discount,” Borman says. “If you’re constantly on sale, it cuts into your group and party business, too.”

Second, after long conversations with all the general managers, Apex’s top executives unified pricing, which had differed depending on the facility.

“We wanted to make a statement,” Borman says. “We went in with a whole new thought process.”

Their philosophy carried over from Weber’s time at Paramount and Six Flags. “If you go off deal or increase the price, you may reduce traffic a bit, but you will always increase the revenue,” he says.

They instituted a marquee price of four hours of unlimited rides and attractions for $39.99 and “everything flows off of that,” Borman says. The management team then established a la carte pricing to give value to the marquee price (for example, $10 for a round of miniature golf, and $8 for a go-kart ride, trip up the rock wall, and a spin in the bumper boats). With the final pricing piece, they created a 90-day pass for $59.99.

“It’s easy for the cashier to say to a guest, ‘You pay $39.99 every time you come in. Two visits alone will cover the 90-day pass,’” Borman says.

Refreshes, Inside and Out

Apex also overhauled its parks’ physical plants; most of the facilities underwent a series of partial or full “refreshes” depending on their needs, Borman says. Those included:

•    A fresh coat of paint inside and out

•    A move to card readers, which will, in turn, lead to a loyalty program

•    New carpet, tile, and counters throughout each facility

•    Enhancements to lighting

•    Upgrades to restrooms, menus, and kitchens

•    Resurfacing and restriping of parking lots

•    Transforming party rooms to be more adult-centric, thus attracting corporate groups

•    Installation of bars at the Boomers! in Boca Raton and Houston (with beer and wine to come at other facilities)

•    More games, rides, and attractions throughout the chain

The price tag for these refreshing efforts varied, from $300,000 at Boomers! Fresno, to $600,000 for Boomers! Houston, to nearly $1 million at Boomers! Boca Raton, Borman says. However, he points out not all facilities received these hefty financial boosts.

“We consciously left out several parks already doing well,” he says. “We just wanted to make operational changes at those.”

This other type of refresh took place across the Apex portfolio, with a refocusing on the company’s core values:

•    Safety. “It’s about hiring the right people and giving them the best training we possibly can,” Borman says.

•    Team. “We’re all-inclusive,” Borman says. “It’s not corporate pressing down on them.” Weber adds, “We have created an organizational culture that collaborates on key strategies together. When you do that, good things will happen.”

•    Integrity. “The management team has clear expectations,” Borman says. “They know the benchmarks and how they will be measured. Then, they can work toward achieving these goals.”

•    Quality. “Everyone does their part,” Borman says. “Employees pick up every piece of paper they see on the ground and touch up the restrooms when they go in there.”

•    Guest Satisfaction. “It doesn’t cost you anything to smile,” Weber stresses. “That makes a huge difference to the guest.” Borman adds, “If you give everyone who walks in a memorable experience, that makes them want to return three, four, or five times a year. Then, you have success.”

In facilities that just focused on operational changes, without any major capital investments, revenue increased 6 percent to 8 percent over the previous year, Borman says.

An Active Player in the Marketplace

While most indicators for Apex are positive, the company has experienced some growing pains. San Antonio’s Malibu Grand Prix closed in September 2015 after 37 years in operation. Apex decided not to renew the lease there, one of the toughest decisions the young company has made so far.

“We loved the market and the people, but we decided to let the landlord have it back,” Weber says. “How do you outrun the dynamic of occupancy cost creep?”

That move aside, the three leaders of Apex look toward the future with hope and see a wealth of potential. In fact, they have a full-time acquisitions/business development staffer talking daily to parks that may be interested in selling.

“We’re out in the market,” Honey says. “We’re aggressively seeking more deals, but we’re very selective to look for ones that only fit our parameters.”

Less concerned with new construction and going international for now, Apex wants to focus on small-to-midscale U.S. parks with employees who fit the company’s approach to team and business.

“We like FECs, water parks, and amusement parks,” Weber says. “It’s a tremendously fragmented space. There are thousands out there; however, for us to be truly interested, they have to be locations where we think we can bring something to the table.”

These discussions continue, and expect to see at least a couple more parks on the company’s roster before year’s end.

“Keep an eye on what Apex does,” Borman promises. “We’re going to be that shining star in the sky.” 

Apex PARKS  Portfolio at a Glance

AMUSEMENT RESORT

Indiana Beach ­Boardwalk Resort

Location: Monticello, Indiana

Year Opened: 1926

Size: 1 million square feet

Annual Attendance: 400,000+

Key Attractions and Rides: Six roller coasters, as well as the state’s longest suspension bridge and largest paddlewheel boat; more than 1,200 camping sites, hotel rooms, and cabins

Fun Fact: At one time, Indiana Beach used live models on its billboards to wave at cars driving by on the highway.

WATER PARKS

Big Kahuna’s Water Park

Location: Destin, Florida

Year Opened: 1986

Size: 22 acres

Annual Attendance: 200,000

Key Attractions and Rides: 40 water-play areas, along with 100-foot-tall “Sky Coaster” and 85-foot-tall “Cyclone” thrill ride

Fun Fact: “Kowabunga Racer” opened last season, a four-lane “drag race” that drops five
stories over the length of a
football field.

Sahara Sam’s Oasis

Location: West Berlin, New Jersey

Year Opened: 2009

Size: 80,000 square feet and 2-acre outdoor park

Annual Attendance: 380,000

Key Attractions and Rides: Family raft ride, surf simulator, wave pool

Fun Fact: The first and only freestanding indoor water park in the continental United States.

Boomers! El Cajon

Location: El Cajon, California

Year Opened: 1993

Size: 10 acres

Key Attractions and Rides: Mini-golf, go-karts, bumper boats, kids county fair, batting cages

Fun Fact: The FEC contains a 40-foot-tall 1953 Eli Bridge Ferris wheel.

Boomers! Fountain Valley

Location: Fountain Valley, California

Year Opened: 1970

Size: 10 acres

Key Attractions and Rides: Go-karts, batting cages, children’s rides, bumper boats

Fun Fact: IAAPA Hall of Famers John and Jim Huish built the park.

Boomers! Fresno

Location: Fresno, California

Year Opened: 1997

Size: 7.5 acres

Key Attractions and Rides: Go-karts, mini-golf, laser tag, rock wall, game room, restaurant

Fun Fact: It was the last of seven parks built by FEC pioneers Ron and Bill Rameson and the only one with second-story offices.

Boomers! Irvine

Location: Irvine, California

Year Opened: 1994

Size: 7 acres

Key Attractions and Rides:
Arcade, laser tag, mini-golf, go-karts, water-play area

Fun Fact: This location was originally a skating rink.

Boomers! Livermore

Location: Livermore, California

Year Opened: 1995

Size: 4 acres

Key Attractions and Rides: Go-karts, mini-golf

Fun Fact: It is one of the smallest parks in the company, with only four main attractions.

Boomers! Modesto

Location: Modesto, California

Year Opened: 1993

Size: 6 acres

Key Attractions and Rides: Mini-golf, go-karts, bumper boats, laser tag, arcade, batting cages

Fun Fact: The FEC hosted the largest chamber of commerce meeting in Modesto’s history, with nearly 600 attendees.

Boomers! San Diego

Location: San Diego, California

Year Opened: 1974

Size: 5 acres

Key Attractions and Rides: Mini-golf, go-karts

Fun Fact: In 1975 and 1976, the park had 28 trampolines where the bumper boats stand today; the Huish brothers were among the first to put trampolines in FECs.

Boomers! Santa Maria

Location: Santa Maria, California

Year Opened: 1991

Size: 4 acres

Key Attractions and Rides: Mini-golf, bumper boats, rock wall, go-karts, ­batting cages

Fun Fact: It was the first FEC built by Ron and Bill Rameson as they launched the Camelot Park Family Fun Center brand.

Boomers! Upland

Location: Upland, California

Year Opened: 1973

Size: 10 acres

Key Attractions and Rides:
Four full-size mini-golf courses,
go-karts, arcade, batting cages,
bumper boats, rock wall, Ferris wheel

Fun Fact: The Ferris wheel was built in 1949.

Boomers! Boca Raton

Location: Boca Raton, Florida

Year Opened: 1994

Size: 9 acres

Annual Attendance: 350,000

Key Attractions and Rides: Go-karts, mini-golf, bumper cars, arcade

Fun Fact: It was the first location with the Boomers! name.

Boomers! Houston

Location: Houston, Texas

Year Opened: 1995

Size: 5 acres

Key Attractions and Rides: Go-karts, bumper boats, mini-golf, rock wall

Fun Fact: It is Houston’s first two-level
go-kart track.

SpeedZone Los Angeles

Location: Los Angeles, California

Year Opened: 1997

Size: 10 acres

Key Attractions and Rides:
Top ­Eliminator Dragsters

Fun Fact: Several movies and commercials have filmed here, and it’s a popular stop for Hollywood stars and professional athletes.

SpeedZone Dallas

Location: Dallas, Texas

Year Opened: 1979

Size: 12 acres

Key Attractions and Rides:
Top Eliminator Dragsters, Turbo Track, Slick Trax, Thunder Road

Fun Fact: The Top Eliminator Dragsters go 0 to 70 mph in 3.5 seconds.