While Wannado City gets high marks from the kids who visit, the financial performance of the $40 million theme park at Sawgrass Mills mall has yet to make the grade.
Wannado officials say Hurricane Wilma disrupted attendance at the Sunrise park, where kids play out grown-up careers. That created cash flow problems, prompting vendors who hadn’t been paid to sue. The park said it recently paid the overdue bills.
Getting a handle on operating a theme park the size of three football fields has been a challenge for Wannado, which has tweaked staffing levels, operating hours and ticket prices. Wannado has been slow to attract more corporate sponsors, a key revenue source. And its aggressive expansion plans have yet to materialize.
Nevertheless. Rene Aziz, president and chief executive of Wannado Entertainment, remains upbeat Wannado is part of Mexico’s Corporacion Interamericana de Entretenimiento (CIE).
“It’s been tough to come to the U.S.,” Aziz said. “But we will be much more successful in the years to come in the U.S.”
The 140.000-square-foot Wannado opened in August 2004 to much fanfare. It’s modeled after a similar park in Mexico City.
In its first full year of operation, Wannado attracted more than 500,000 visitors (423,000 paid). But it had forecast more than 600,000. Wannado missed its attendance target largely because of Hurricane Wilma.
“We were dead for six weeks,” Aziz said. “No one was coming to Sawgrass.”
Also, schools canceled trips to Wannado to make up for the lost class time from Wilma, spokeswoman Laura Lieberman said.
CIE doesn’t break out Wannado’s performance. (It’s one of 10 amusement parks owned by CIE. with the others in Mexico and Colombia.) But CIE mainly blamed the hurricane for a 24 percent drop in fourth-quarter revenue in its amusement park division.
The storm hurt Wannado’s ability to pay some of its bills on time. It was late paying $200,000 in state sales and use tax, prompting the Department of Revenue in February to record a warrant – which gives it the ability to freeze bank accounts and seize property. Wannado paid the tab earlier this month before such drastic measures.
Three vendors sued after they weren’t paid for services.
“We did communicate to vendors that we would be slow to pay, but that they would get paid.” said Curtis Parks, Wannado City’s general manager.
Gene Wall, president of Another Off the Wall Production, a Houston-based company that produced television and radio commercials for Wannado, last week expressed frustration with trying to get $20,800 he said he was owed.
“I can’t do business with a company that doesn’t pay its bills,” Wall said. After The Miami Herald inquired about the suits. Aziz said Wannado paid what it owed. Noam Cohen, a Miami lawyer representing Wall, confirmed his client has been paid in full.
Wannado also was late in paying rent on office space it leased in Plantation, but it has worked out a settlement with the landlord.
“THE LEARNING CURVE”
In a conference call with analysts in October to discuss third-quarter results. CIE Vice Chairman Rodrigo Gonzalez said “the learning curve has been high” with Wannado.
“For example, we now recognize this park is big – in fact, larger than the attendance it currently supports,” he said. “So we need to adjust the administrative and expense functions in order to strengthen margins.”
Among the changes: Wannado at the beginning of the school year opted to close the park on Mondays and Tuesdays – save for school breaks. It also trimmed staff, cutting 10 positions last month. And it’s tinkered with its pricing policy. Prices have fluctuated, with admission for children going from $34.95 to $23.95 before the current $29.95. Admission for adults is also back to $15.95 after it was lowered to $9.95 last year.
“It took us a while to figure out the right price,” Lieberman said. She added discount tickets are available through Publix and AAA. Aziz said Wannado will finish in the black this year.
Wannado had anticipated having 30 corporate sponsors in the park by the end of last year, but it’s been stuck on 14. Aziz said Wannado is completing negotiations with five new sponsors, including Nestle for the park’s chocolate factory and Ringling Bros, and Barnum & Bailey for the park’s circus. (The Miami Herald is the sponsor of the park’s newspaper.)
Sponsors have been slow to come on board because they anticipated more than one park, Lieberman said. While Aziz has promised an “aggressive expansion” with parks in Chicago. New York, Los Angeles. Dallas and Atlanta, so far the Sunrise location is the only Wannado to open.
Plans are underway for Wannado parks in China. Dubai, Japan, London and Paris, Aziz said. And it plans to go into Meadowlands Xanadu – a New Jersey project being developed by Mills Corp., the Arlington, Va, firm that built Sawgrass Mills, Aziz said.
But mounting troubles at Mills – including a Securities and Exchange Commission investigation, accounting restatements, a shake-up in its ranks and canceled projects – have raised doubts about Xanadu.
“We expect to grow with the Mills Corp.,” Aziz said.
Meanwhile, CIE*s Gonzalez said in a conference call last month that it wouldn’t move ahead with additional Wannado parks unless it was “completely comfortable with the level of performance of the unit that we have opened.” Plus, it also wanted to ensure it lined up investments from third parties before proceeding.
A Citigroup Global Markets analyst took that to mean CIE ‘has suspended the roll-out of Wannado in the U.S. for now.” The analyst, who wasn’t available for comment, lowered revenue projections for CIE’s amusement-parks division for this year and 2007.
Aziz still likes Wannado City’s prospects, though.
“lt’s a slow process,” he said. “But we strongly believe this is a product that will revolutionize the theme park business all over the world.”