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Backer writes off Myrtle Beach theme park

An Israeli company that is a major investor in Hard Rock Park wrote off its investment in the park last quarter because of problems stemming from poor attendance, a company official said Tuesday.

Africa Israel Investments, an international conglomerate with holdings mostly in real estate, wrote off its $10 million investment in the Myrtle Beach theme park "due to liquidity difficulties the park is experiencing due to low attendance compared to its business plan," Chief Financial Officer Ron Fainaro said on a conference call Tuesday morning.

The company attributed part of its $25 million net loss in the second quarter to the Hard Rock Park writeoff.

Hard Rock Park officials will not give specific attendance figures but have said that the summer has been "tough."

Park spokesman Jim Olecki said Africa Israel is still an investor in the park, but would not comment much beyond that about the company's decision.

"If they're writing it down, then there's got to be some reality to" the assessment of attendance, Olecki said. "All of our investors are invested because they believe in the park. ... We just won't comment on what our investors do or what they say."

The $400 million park was financed by a group of local and international investors, including another Israeli firm, Polar Investments, and $255 million worth of stable but low-rated bonds.

The move by Africa Israel says that the company has decided the investment is worthless, said Robert Burney, a finance professor at Coastal Carolina University.

"It clearly signals a lack of confidence and a lack of optimism concerning future prospects," Burney said. "It's clear that they don't intend to receive any return at all."

The park already has started scaling back its hours and days of operation with the summer season over, and Olecki said the park will likely continue to reduce its schedule, though a planned Halloween event is still on, for now.

"We'll be ready to go back to full strength next year," he said.

The park opened in April to great expectations, with local tourism officials and hoteliers hoping it would draw new tourists from across the United States and abroad and become an economic engine for the surrounding area.

Its timing, however, could not have been worse, economists and industry experts say, as families cut back on spending during a summer that saw gas soar to $4 a gallon.

The park said it hired only 2,000 employees instead of the expected 3,000, and cut operating hours and days as the summer progressed.

Still, the area saw a spike in the tax generated by amusements, including Hard Rock Park, known as admissions tax.

Year over year, that tax jumped 18.6 percent in May and 13.2 percent in June in Horry County, according to state tax figures. Economists and officials attribute at least some of that to the sale of the park's $50 tickets.