Hard Rock Park: The way the music died
How a 6-year-old dream lost its battle to survive
12/14/2008 12:01 AM
01/12/2009 5:28 PM
In September 2002, Jon Binkowski and Steven Goodwin were in Los Angeles, trying to pitch their idea for a Myrtle Beach theme park to movie studios, when they got a call from Hard Rock International. The cafe, hotel and casino company wanted to see their plans for the proposed Hard Rock Park immediately. But the pair didn't have a plan for a rock 'n' roll theme park - just a generic park with roller coasters and a Ferris wheel.
So at a Kinko's in Los Angeles, Binkowski, the park's future creative director who once worked for SeaWorld, and Goodwin, a financial guru whose background was with Hard Rock, came up with rides, puns and plays on words to give an aura of cohesiveness.
Nearly six years later, on April 15, Hard Rock Park opened off U.S. 501 in Myrtle Beach with 55 acres of rides and attractions that looked nearly identical to the map from that frenetic brainstorming session. But by September, the park closed its gates and filed for Chapter 11 bankruptcy protection.
A park is born
After the park's team signed its agreement with Hard Rock, it had the brand power it needed to search for financing and start working with the local government. With seed money from local investors, it began looking for the major, multimillion-dollar loans and bonds needed to build the park, going to places such as Merrill Lynch and Charlotte, N.C.-based McColl partners. It also signed on Felix Mussenden, who had worked for Universal Orlando, to complete its management triad.
They met with local businesses and organizations to explain their vision. Rock concerts and shoulder-season events such as Oktoberfest sounded great to hoteliers and others in the tourism industry hungry to make Myrtle Beach into a year-round destination.
In every presentation, the park's management exuded supreme confidence. County Council Chairwoman Liz Gilland said the involvement of Dick Rosen, a local investor who was CEO of Myrtle Beach-based AVX Corp., helped give the project some credibility.
"That lent an air of soundness to it," Gilland said. "It seemed more solid with someone like Dick, who is a local with a very established reputation."
But the company struggled to find financing for the deal, and the chances of opening in 2005 seemed slimmer by the day. Meanwhile, the price tag kept rising. By January 2005, the group had its hand out to Horry County for what it now believed to be a $250 million project.
It wanted $25 million to $30 million in bonds to help close up the gaps in financing, while projecting that the park could create thousands of jobs and provide more than $25 million a year in state and local tax revenue.
County Council members would not support the bonds because the company refused to open its books to explain the business plan.
The first steps
Things got moving after the park secured more seed money from Israeli firms in December 2005, and in March 2006 the group sold $255 million worth of bonds. The bonds had a low rating from Moody's Investor Service - rated B3 and Caa2 - which in common terms are known as either junk or speculative bonds. "It's just our opinion of how likely you, as an investor, are to get back your money," Lisa Tibbitts, Moody's assistant vice president of ratings communications, said at the time.
Moody's predicted the park would not generate any revenue for at least the first two years it was open, though it said the area would provide a "solid base" for attendance. The park was ready for construction.
The groundbreaking on July 13, 2006, was quite a show. In what would be typical of the park's flair for the dramatic, the park built a larger-than-life sand castle in the shape of rock legends' heads, shot off fireworks and guitar-shaped confetti, and used Gibson guitars with shovel heads for the ceremonial groundbreaking.
They boasted of the memorabilia that would adorn the walls of the park, then said The Beatles' Magical Mystery Tour bus would tour the country to promote the park.
"Lo and behold, here it came," Gilland said, recalling the bus rolling up carrying the governor and his sons. "It gave me absolute cold chills. It was just an exciting time. The vision was so great, the potential was tremendous, the excitement and the enthusiasm was palpable."
But even as the park approached construction, national amusement park experts said they feared the park would not make it. Dennis Spiegel, considered one of the foremost experts in the industry, called it "questionable" and said Myrtle Beach was simply not a year-round market.
From the very beginning, the park was extremely secretive about details. Even as the Magical Mystery bus embarked on a tour of six cities to promote the park, executives would not say where it was headed beyond New York City. Little by little, details were announced, as the park tried to get as much publicity as possible.
At a trade show in Orlando, the park debuted its custom characters, the Bear Metal Family and its dog, Winston, a Hard Rock version of Mickey and Minnie. The park had news conferences to announce their nighttime show set to Queen's Bohemian Rhapsody, to show off the first public running of the Led Zeppelin roller coaster and to announce that the park would include a restaurant themed after Arlo Guthrie's hit song "Alice's Restaurant."
As the opening date approached, local business owners got more details about the park's plans for marketing itself and selling tickets - and soon became worried that the park's team did not understand the Myrtle Beach market.
"The numbers of people were way out of line," said Frans Mustert, CEO of Oceana Hotels, a Myrtle Beach hotel group. "We told them we didn't think it was going to fly with their financials, but they never asked anyone else to invest, so we didn't care. If they had asked the chamber to invest, we would have said, 'Guys, you are crazy.' But they didn't."
Initially, many had believed the park would be spending tens of millions in advertising to promote the park, but it became clear that the figure would be nowhere near that number, and the park would not advertise practically until the opening date.
In November 2007, park representatives said they would be counting on free media publicity to get the word out and they would only be relying on the area's existing visitor base.
The park had floated the idea of advertising with Direct Air, a Myrtle Beach-based charter airline, its CEO Judy Tull said. They even talked about painting an entire plane with a Hard Rock advertisement. But they told Tull they would not be able to pay for any of the marketing until near the opening date, so that idea fizzled.
It also became clear that the park was not buying air time or print ads in many of the Strand's prime feeder cities. As the Myrtle Beach Area Chamber of Commerce - which handles most of the marketing for the Myrtle Beach area - started making its ad purchases, it wanted to make sure it was not competing with Hard Rock Park for the same eyeballs, chamber CEO Brad Dean said. So it asked regional advertising agents who place marketing on TV and in magazines whether the chamber's ads would be running at the same times or on the same channels as the Hard Rock Park marketing.
Hard Rock who? some would say.
The park did not do what most area attractions do to sell tickets - work with local hotels. The way many attractions such as Medieval Times get visitors to buy tickets is by selling them at hotel lobbies and using the hotels' sales staffs as extensions of their own sales staff. The attractions sell the tickets to hotels at a discount, and the hotels then mark up the tickets and sell them to guests.
Instead, the park said it would only allow "preferred" hotels to sell its tickets.
"If your business only partners with a handful of hotels, you're encouraging your competition to market itself through other local hotels," Dean said. "In fact, that's what happened with Hard Rock."
Myrtle Beach business veterans said they warned the park's executives the summer before the park opened that there might be some problems with the numbers they were expecting and the way they expected to sell tickets.
Chad Prosser, the head of the state's Department of Parks, Recreation and Tourism, said he had warned the park's executives that they needed to create a multimillion-dollar ad campaign to bring more people into the state. After all, its two biggest attractions - Carowinds and Ripley's Aquarium - attract around 1 million or more visitors a year, he said.
"I think what we've said all along is, 'That's great,'" Prosser said of the park's goal of 3 million visitors a year. '"That's aggressive. In order to do that you have got to create a market of people coming to Myrtle Beach for a theme park experience. ... [Otherwise,] there's no way you would get those numbers.'"
On opening day, thousands of people came through the gates, took in the shows and picked up merchandise. The park, in the meantime, had been giving away thousands of free passes to get people in the door.
Still, it was quickly clear the park was not getting the 30,000 visitors a day it had once predicted. Heads of local amusement competitors would drive past the parking lot, counting the number of cars to estimate attendance, and drive away satisfied and unconcerned about the competition.
Visitors who completed surveys said they enjoyed the park, said Binkowski, the park's chief creative officer who helped put the whole project together.
The park quickly started to discount ticket prices, which it had said it did not want to do, offering bikers a deal during the annual Harley-Davidson rally in May, then offering discounts for Carolinas residents and hospitality workers. At the same time, the park's bonds started trading at low prices, meaning investors began doubting the park's success during what looked like it would be a challenging summer for amusements.
The last gasps
The grand opening celebration in June was scaled back from initial plans. A celebrity golf tournament attracted few celebrities and eventually was not open to the public, as was advertised. The park ended up not paying the bill for renting out the Sheraton Myrtle Beach Convention Center Hotel for several days for the opening during the first week in June.
Industrywide, parks were experiencing a turbulent season.
"It's been really an up and down year that doesn't match any pattern from any previous year," said Pete Owens, a spokesman for the Dollywood park in Pigeon Forge, Tenn.
Dollywood will probably wind up the year off 6 percent or 7 percent from the year before - but it is coming off of several record years, and this year will still end up being perhaps its third best ever, Owens said.
In the Myrtle Beach market, destinations such as Family Kingdom and Wild Water & Wheels had great years, while Ripley's Aquarium was down compared with a stellar 2007.
By Aug. 4, Hard Rock Park was consulting with financial advisers about its debt, starting down the path to bankruptcy.
Binkowski said he believes the park's main problem is it did not have enough money to make the necessary adjustments that come with starting a business and that gas prices - which surged past $4 a gallon during the summer - kept penny-pinching visitors away. He said he does not have regrets.
"I would have personally gone and dealt with OPEC and tried to get that going, but no, I think that Steven Goodwin, Felix Mussenden and the staff and management were all outstanding," he said.
Local officials have called it a "black eye" and worry that it will prevent others from seeing promise in the market.
When the park opened, Binkowski said it was like seeing a child being born. Now, he said seeing it pass on to other hands is like having a great child that he can't afford to feed.
Binkowski is back in Orlando, Fla., where he is in the middle of producing a low-budget horror flick he wrote and directed.
"I have mixed emotions these days when I'm filling up my car with gas," he said, citing prices that have fallen about $2.50 a gallon since the summer peak. "But you can't control those kinds of things. You can't get too worked up."
Binkowski said he hopes the park's new owner, which could be decided at an auction Monday and approved by a judge Thursday, will keep the Hard Rock theme.
"I do wish them the best because I think they'll have an excellent product," he said.
Find more about Hard Rock Park at The Sun News' Hard Rock Park Page:
View an inventory of Hard Rock Park merchandise and its book value
Search a database of companies and individuals owed money by the park
Read the bankruptcy documents
Bidders are supposed to head to a national law firm's New York office Monday to bid on Hard Rock Park, which has a minimum price of $35 million for either the entire park or its assets. See Monday's paper for a look at potential bidders and a preview of the auction.
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