The scattered construction materials may not look like much now, but this spring Canada's newest roller coaster will rise from the piles of steel littering Montreal's La Ronde amusement park - a sprawling testament to the stubborn staying power of an industry that has seen more than its share of gut-wrenching ups and downs in the past year.
The 640-metre-long ride will zip riders over an artificial lake at speeds nearing 90 kilometres an hour.
Parent company Six Flags - which is operating under bankruptcy protection - has spent more than $10-million on the attraction, promising to flip and spin riders for a terrifying minute or two before they move on to the next rush.
"We try to come up with something new every year," La Ronde spokesman Martin Roy said. "There may be a restructuring going on, but we are doing very well here in Montreal."
While the new roller coaster promises to be terrifying, it can't compete with the fear felt by theme park executives in boardrooms across North America at the onset of the credit crisis, as they realized their highly leveraged balance sheets were about to take them on a different sort of ride.
Three of the industry's four biggest players - Walt Disney Co. is the only exception - will see drastic ownership changes when the gates open for a new summer season.
The parks have traditionally been held by companies specializing in destination tourism, but an unlikely saviour has stepped forward to save an industry that was drowning in debt: private equity firms.
Their involvement heralds a new era in theme park development, breathing new life into aging parks such as La Ronde and Canada's Wonderland, just north of Toronto.
"Theme parks remain wildly popular, but they also remain wildly expensive to run," said Robert Niles, an industry expert who runs Themeparkinsider.com. "They are a high-risk, high-reward venture, but you have to bring a lot of money to the table to play and that's what private equity can offer."
About 343 million visitors attended North American amusement parks in the past year.
That number that has been steadily increasing since the parks first began to sprout in the American Midwest in the 1960s. But their heavy debt loads became too much for the companies to carry when the recession hit, forcing them to take drastic measures despite their consistent profitability.
Six Flags filed for Chapter 11 bankruptcy protection in the United States last June as it stared down a $300-million (U.S.) payment on its more than $2-billion in debt.
Cedar Fair Entertainment Co., which owns Canada's Wonderland, struck an agreement to sell its parks to private equity firm Apollo Global Management LP for $2.4-billion, in a deal expected to close in the coming weeks. Cedar Fair shareholders will vote on the takeover in March.
The sale price is about half of what the Ohio company paid for the former Paramount Parks chain in 2005, in the deal that created the bulk of the company's heavy debt load.
"Cedar Fair was well run in better times, but they paid too much for Paramount which owned Wonderland," said Dennis Spiegel, president of Cincinnati-based International Theme Park Services and one of the original consultants involved in Wonderland's development. "Then the recession hit, and it's all a bit much."
Together with Anheuser-Busch InBev SA- which sold properties such as SeaWorld and Busch Gardens to private equity firm Blackstone Group LP for an estimated $2.3-billion in October - the three companies accounted for more than 90 per cent of all the parks in North America.
In private equity, Mr. Niles said they may find perfect owners. "They want to find companies with decent management in place, so they can write a cheque to get started and then start cashing cheques down the road," said Mr. Niles, who is based in California and spent his youthful summers working for Disney's theme park.
Amusement parks are still considered reliable and consistent cash generators, despite the debt problems their parent companies racked up as they consolidated the industry. Six Flags pulled in $457-million of revenue and $160-million in profit in its most recent quarter at its 21 parks, while Cedar Fair generated $519-million and made a $107-million profit at its 11 parks.
There's no secret to success - it takes a pile of money to make a pile back at an amusement park. Six Flags has spent more than $90-million at La Ronde since taking over in 2001, and Wonderland continues to roll out new rides and features each year (including a $25-million roller coaster two years ago).
While the parks are at the high end of prices when it comes to family entertainment, Wonderland and La Ronde have spent the last three years trying to drive down costs. Both are focusing on local markets, and offer season passes that allow all-year access for the cost of about two visits.
In 2007, Wonderland made a huge concession to its customers by building an outdoor picnic area just outside its main gates, allowing them to come and go as they pleased and pack a sandwich rather than pay for pricier meals inside the park.
"We acknowledge that people are more and more value conscious in their decisions and that there's a lot of competition," Wonderland vice-president Dave Phillips said. "We're constantly looking for ways to make it easier for them to spend the day with us in the sun."
By the numbers
Size: 59 hectares on Montreal's Île Sainte-Hélène.
Features: More than 30 rides, including nine roller coasters. Every summer, the park hosts L'International des Feux Loto-Québec, a high-profile international fireworks competition.History: It opened in 1967 as part of Expo 67, and was run by the city until 2001 when it was sold to Six Flags. As part of that deal, the park is obliged to meet investment obligations every year.
Recent upgrades: In May, the park will unveil a new, $10-million roller coaster capable of reaching speeds of up to 90 kilometres an hour.
Canada's WonderlandSize: 178 hectares in Vaughan, Ont.Features: More than 60 rides, including 15 roller coasters and a water park.
History: Opened in 1981 and operated by Kings Entertainment Corp. until Paramount Parks purchased it in 1993. Ohio-based Cedar Fair Entertainment Co. bought Paramount in 2006. In December, New York private equity firm Apollo Management said it had agreed to buy Cedar Fair for $635-million (U.S.); shareholders vote on the proposal next month.
Recent upgrades: Planet Snoopy children's area opens this year. Most recent roller coaster was $25-million Behemoth, opened in 2008.