Universal Orlando Resort Expansion (Part 1)

[zg44]

They've been paying ~$275,000 an acre for their other recent purchases. While the Ripley's land is valuable, I don't know that its worth 4 times as much an acre as what they have already bought. They bought the 100 acre plot on Sand Lake for 27.5 million. 40 million for 40 just sounds steep. If anything, they might buy a sliver at the northern part of the plot to make a road with the condition of Ripley getting entrance and exit rights to the road onto their property. Couple that with the CW idea above, and maybe something is doable. To buy the whole thing, I think they'd have to be desperate.

Looking further at the UCMP land, I don't know that they can build a cross road with just that. It's tight. If the map site is accurate, we are only talking 25-30 feet between the property edge and the waterway in places. Thats not really wide enough for more than a 2 lane road and that's assuming they could even build there. Otherwise, they'd have to eliminate that waterway, and I can't see that being approved. If that's the case, they either have to use the Mandarin extension or buy land from Ripley. I'm starting to think that routing traffic down Universal might be their best play.

I understand what you're saying from a purely accounting sense, but Universal has underpaid significantly for their current land based on its potential economic value.

Here's the thing, if you put 1250 hotel rooms on that property and are charging $150 per night on those rooms at 90% capacity; you're basically looking at a profit of somewhere around $10+ million a year on that 40 acres of land.

Forget about the prices paid on the original land, you'd be willing to pay at least $1.5-2 million an acre just to be able to spend $150+ million to create that type of profitable enterprise.

And the main theme park property economic values are even greater (that land is probably worth north of $3 million an acre in terms of its economic potential in the context of 2 major theme parks or a water park or premium hotels that can charge $200-400 a night).

That's why I think Universal would want to cut a deal with Ripley's around the terms of $40 million and a multi-acre complex of Ripley's attractions on CityWalk 2.0.

Thanks! It was the later restrictions that eluded me. I wonder if the city of Orlando or the county could, by rewriting the law applying to that property, supersede a judges ruling? That is, if the judge rules no theme park ever, ever. Universal cannot sit on its hands appealing ad nauseam.

The reality is this whole case is more about Stan Thomas trying to get as much money as he can out of Universal.

Universal is the only logical and willing buyer of large parts of the UCPM III land, but the question has always revolved around price. Stan Thomas has used this lawsuit as a way of raising the price.

If the judge rules in favor of Universal, then the land purchase is probably going to be around $200k an acre.

If the judge rules in favor of Stan Thomas, then the land purchase is probably going to be around $400k+ an acre (even though a lot of that land is wetland).

 

[GoUCFKnights]

The whole thing is about money, if Universal offered as much as Ripleys for that parcel of land, Stan Thomas would have took it, no doubt. I doubt Universal gets that land at this point, Ripleys is interested in profiting off of the Universal expansion, and Universal probably figures it can just build a little more dense instead. Universal probably can get roads through wherever it wants to connect its parcels, and I imagine Universal Blvd will be the main route, its the road bearing their name.

 

[quinnmac000]

I understand what you're saying from a purely accounting sense, but Universal has underpaid significantly for their current land based on its potential economic value.

Here's the thing, if you put 1250 hotel rooms on that property and are charging $150 per night on those rooms at 90% capacity; you're basically looking at a profit of somewhere around $10+ million a year on that 40 acres of land.

Forget about the prices paid on the original land, you'd be willing to pay at least $1.5-2 million an acre just to be able to spend $150+ million to create that type of profitable enterprise.

And the main theme park property economic values are even greater (that land is probably worth north of $3 million an acre in terms of its economic potential in the context of 2 major theme parks or a water park or premium hotels that can charge $200-400 a night).

That's why I think Universal would want to cut a deal with Ripley's around the terms of $40 million and a multi-acre complex of Ripley's attractions on CityWalk 2.0.


The reality is this whole case is more about Stan Thomas trying to get as much money as he can out of Universal.

Universal is the only logical and willing buyer of large parts of the UCPM III land, but the question has always revolved around price. Stan Thomas has used this lawsuit as a way of raising the price.

If the judge rules in favor of Universal, then the land purchase is probably going to be around $200k an acre.

If the judge rules in favor of Stan Thomas, then the land purchase is probably going to be around $400k+ an acre (even though a lot of that land is wetland).

Ripley doesn't have anything that would create enough revenue or distract people from going and leaving Universal property which I think this other campus goal is....to be a sufficent and active night life area for convention goers that pulls people from I-drive. This is their properties and I can't see a majority of people wanting to spend money on this stuff when there could be more unique stuff being created and made that currently is not in Central Florida.

Ripley Entertainment - Home - Ripley Entertainment Inc

All the stuff Ripley owns is so generic that I think Universal would just rather buy out the land entirely with no stipulations.

 

[zg44]

The main point that I would make is that the economic value of the land depends on the buyer(s). A normal hotel or apartment builder doesn't want to pay more than $1 million an acre, and the same is true of a normal entertainment company. (Of course it depends on the specific market and what your balance sheet will look like when the enterprise is built, but let's just assume we're talking about similar Orlando land).

Then there's higher end buyers like Universal/Disney or a 5 star resort/casino builder. Those types of companies can pay much higher land values because their activities will generate much higher returns per acre.

Imagine if Disney didn't have all their extra land and this 350-400 acre parcel opened up equidistant from UOR and WDW. What would that bidding war look like? It would easily go north of $2 million an acre.

Universal's been incredibly fortunate that there are no mass entertainment competitors for these land purchases. Ripley's is really the only company that's moved in after Universal, but they aren't on the same scale. Maybe if SeaWorld Orlando had double or triple its current attendance, they'd be willing to bid up to $2 million an acre for the land Universal's bought.

All-in-all, Universal's potential economic value to the lands are so much greater than they're paying, but it's a function of the fact that there's no mass competitor like Disney to force the prices up that they're taking these lands for relatively low prices.

Ripley doesn't have anything that would create enough revenue or distract people from going and leaving Universal property which I think this other campus goal is....to be a sufficent and active night life area for convention goers that pulls people from I-drive. This is their properties and I can't see a majority of people wanting to spend money on this stuff when there could be more unique stuff being created and made that currently is not in Central Florida.

Ripley Entertainment - Home - Ripley Entertainment Inc

All the stuff Ripley owns is so generic that I think Universal would just rather buy out the land entirely with no stipulations.

Yeah, I'm struggling to think of why they need 40 acres when Ripley's could build most of their entertainment buildings on a space of <5 acres. Most of their entertainment franchises require a space of 10,000-20,000 square feet, not giant acreage like theme parks or large hotels.

I'd think for Ripley's the best deal would be to be able to build 4-5 of their entertainment franchises in a complex on 3-4 acres in CityWalk 2.0. At least that would be more obviously profitable than trying to make a separate 40 acre entertainment complex work...

The whole thing is about money, if Universal offered as much as Ripleys for that parcel of land, Stan Thomas would have took it, no doubt. I doubt Universal gets that land at this point, Ripleys is interested in profiting off of the Universal expansion, and Universal probably figures it can just build a little more dense instead. Universal probably can get roads through wherever it wants to connect its parcels, and I imagine Universal Blvd will be the main route, its the road bearing their name.

It's a bit more complex because Stan Thomas' various enterprises have huge amounts of debt on them. Universal doesn't want to help him refinance portions of the land (like the 3 large parcels in bankruptcy proceeding), so they aren't willing to bid on these properties.

If Stan Thomas didn't have the huge debt problems, then yeah Universal might have just paid him straight up for the properties even at a higher price.

I'd think Universal would be willing to pay Ripley's more because of that factor.

 

[Andysol]

I’d love to see a Ripley’s on property. Maybe a Tassaud wax museum, 4D VR adventure similar to Star Wars/Ghostbusters, etc.

Personally, I have no desire to visit it, but I think it’d be a nice “anchor” brand in the same vain as a Hard Rock or Cirque show.

 

[JoeCamel]

The main point that I would make is that the economic value of the land depends on the buyer(s). A normal hotel or apartment builder doesn't want to pay more than $1 million an acre, and the same is true of a normal entertainment company. (Of course it depends on the specific market and what your balance sheet will look like when the enterprise is built, but let's just assume we're talking about similar Orlando land).

Then there's higher end buyers like Universal/Disney or a 5 star resort/casino builder. Those types of companies can pay much higher land values because their activities will generate much higher returns per acre.

Imagine if Disney didn't have all their extra land and this 350-400 acre parcel opened up equidistant from UOR and WDW. What would that bidding war look like? It would easily go north of $2 million an acre.

Universal's been incredibly fortunate that there are no mass entertainment competitors for these land purchases. Ripley's is really the only company that's moved in after Universal, but they aren't on the same scale. Maybe if SeaWorld Orlando had double or triple its current attendance, they'd be willing to bid up to $2 million an acre for the land Universal's bought.

All-in-all, Universal's potential economic value to the lands are so much greater than they're paying, but it's a function of the fact that there's no mass competitor like Disney to force the prices up that they're taking these lands for relatively low prices.


Yeah, I'm struggling to think of why they need 40 acres when Ripley's could build most of their entertainment buildings on a space of <5 acres. Most of their entertainment franchises require a space of 10,000-20,000 square feet, not giant acreage like theme parks or large hotels.

I'd think for Ripley's the best deal would be to be able to build 4-5 of their entertainment franchises in a complex on 3-4 acres in CityWalk 2.0. At least that would be more obviously profitable than trying to make a separate 40 acre entertainment complex work...



It's a bit more complex because Stan Thomas' various enterprises have huge amounts of debt on them. Universal doesn't want to help him refinance portions of the land (like the 3 large parcels in bankruptcy proceeding), so they aren't willing to bid on these properties.

If Stan Thomas didn't have the huge debt problems, then yeah Universal might have just paid him straight up for the properties even at a higher price.

I'd think Universal would be willing to pay Ripley's more because of that factor.

I know business really isn't like this but could Universal be manipulating the situation a bit harder due to Thomas trying to enforce the land restriction?
Thomas just looks like a ******* doing that and as far down the hole as he is I think he doesn't care about the rep. But to raise a restriction put on by Universal and then twisted by ST to try to keep Universal out is bizarre.
My feeling is that the court will rule the restriction dies with bankruptcy and Universal gets to clean up the picture. Maybe they will "squinch" it.
Does Universal want to delay long enough for it to rinse out this summer/fall? But if ST sold a couple of other things he could drag the suit out for a very long time.
Love watching to see how this all shakes out. It will go down in themepark history and might be called "the consolidation era" for Orlando.

 

[jtsalien]

I’d love to see a Ripley’s on property. Maybe a Tassaud wax museum, 4D VR adventure similar to Star Wars/Ghostbusters, etc.

Personally, I have no desire to visit it, but I think it’d be a nice “anchor” brand in the same vain as a Hard Rock or Cirque show.

Respectfully, that sounds like a nightmare Ripley's is everything Universal is trying to distance itself from. Ripley' is not world class, it's low class. Nothing that belongs in the Atlantic City Boardwalk also belongs in CityWalk.

If Universal did want to do a VR experience, there's much better and reliable partners out there that aren't synonymous with tacky tourism.

 

[quinnmac000]

There are so many opportunities outside of the typical tourists trap that Universal could be doing...I think its a huge waste going back and doing those anchor attractions when DS and CW are both realizing its not what people really want.

Cirque is fine because it would be a one of the kind show not shown anywhere else.

But for the rest, this is not just competing against I-drive but CW #1 and Disney Springs. There are already so many things and places to go so why would I go to CW 2.0.

Like a real vinyl bar with unique architecture where actual records line the wall and actual live acoustic artists play every night. Actual speakeasies with actual secret entrances. Or a restaurant set a man made forest where it simulates camping as you eat on the ground as food is cooked on a "woodburning" fire in front of them. (Yes this is a real thing and quite popular). Maybe even a hookah bar would give people something fresh.

There are so many things out there not just food wise but entertainment wise that they could do...like Rail Bikes that go over the city walk 2.0. An actual romantic spot where couples go. A sponsored VR zone that's free with multiple VR experiences...(samsung already does it in a lot of big cities why not do it at a huge tourist area)

 

[UniversalRBLX]

Having Blue Man on one campus and Cirque or something else on the other would be ideal.

 

[bob albert]

I would have to imagine universal is planning in the background heavily and waiting for all the pieces to fall into place. I think we will see a very rapid timeline when they have all the property lined up for the south location.

 

[graspthesun]

Actual speakeasies with actual secret entrances.

There's a restaurant in Milwaukee and Chicago called SafeHouse that is really neat. I'd love a concept like that at Universal.

 

[GoUCFKnights]

The main point that I would make is that the economic value of the land depends on the buyer(s). A normal hotel or apartment builder doesn't want to pay more than $1 million an acre, and the same is true of a normal entertainment company. (Of course it depends on the specific market and what your balance sheet will look like when the enterprise is built, but let's just assume we're talking about similar Orlando land).

Then there's higher end buyers like Universal/Disney or a 5 star resort/casino builder. Those types of companies can pay much higher land values because their activities will generate much higher returns per acre.

Imagine if Disney didn't have all their extra land and this 350-400 acre parcel opened up equidistant from UOR and WDW. What would that bidding war look like? It would easily go north of $2 million an acre.

Universal's been incredibly fortunate that there are no mass entertainment competitors for these land purchases. Ripley's is really the only company that's moved in after Universal, but they aren't on the same scale. Maybe if SeaWorld Orlando had double or triple its current attendance, they'd be willing to bid up to $2 million an acre for the land Universal's bought.

All-in-all, Universal's potential economic value to the lands are so much greater than they're paying, but it's a function of the fact that there's no mass competitor like Disney to force the prices up that they're taking these lands for relatively low prices.


Yeah, I'm struggling to think of why they need 40 acres when Ripley's could build most of their entertainment buildings on a space of <5 acres. Most of their entertainment franchises require a space of 10,000-20,000 square feet, not giant acreage like theme parks or large hotels.

I'd think for Ripley's the best deal would be to be able to build 4-5 of their entertainment franchises in a complex on 3-4 acres in CityWalk 2.0. At least that would be more obviously profitable than trying to make a separate 40 acre entertainment complex work...



It's a bit more complex because Stan Thomas' various enterprises have huge amounts of debt on them. Universal doesn't want to help him refinance portions of the land (like the 3 large parcels in bankruptcy proceeding), so they aren't willing to bid on these properties.

If Stan Thomas didn't have the huge debt problems, then yeah Universal might have just paid him straight up for the properties even at a higher price.

I'd think Universal would be willing to pay Ripley's more because of that factor.

I meant that as during the negotiation for the overall lawsuit. If Universal was willing to throw money at this, and offered $1 million/acre for all the land Stan Thomas owns, it'd be over. Even if its quite a bit less, but Universal is clearly looking for a bargain and isn't rushing to settle this. I think its unlikely to go to trial, Universal will settle, but they're hoping its desperation from Stan Thomas running out of time with more creditors. Universal's clearly willing to wait him out, and his clock is ticking. I also imagine if Universal was willing to do just that parcel at that price, they could have done an agreement to purchase that land separately from this lawsuit, but demanding not to close unil this is settled (and any deed restrictions are removed on that sale). I don't think Universal's getting Ripley's parcel anytime soon, but I guess we'll see.

If this parcel's right next to a new Universal park, as it sure appears it will be, Ripleys could have the opportunity to build an "almost" on property resort, stick some of its own attractions within walking distance, and do really well with it. They could be looking to create another I-Drive 360 with their own attractions, except even closer to Universal's new park.

 

[graspthesun]

I feel like there's also the possibility of Universal privately approaching Ripley's to hold off on building and doing a land swap at some point down the road.

 

[WAJAS]

I’d love to see a Ripley’s on property. Maybe a Tassaud wax museum, 4D VR adventure similar to Star Wars/Ghostbusters, etc.

Personally, I have no desire to visit it, but I think it’d be a nice “anchor” brand in the same vain as a Hard Rock or Cirque show.

There's already a Tussaud Wax museum at I-Drive 360.

 

[zg44]

I meant that as during the negotiation for the overall lawsuit. If Universal was willing to throw money at this, and offered $1 million/acre for all the land Stan Thomas owns, it'd be over. Even if its quite a bit less, but Universal is clearly looking for a bargain and isn't rushing to settle this. I think its unlikely to go to trial, Universal will settle, but they're hoping its desperation from Stan Thomas running out of time with more creditors. Universal's clearly willing to wait him out, and his clock is ticking. I also imagine if Universal was willing to do just that parcel at that price, they could have done an agreement to purchase that land separately from this lawsuit, but demanding not to close unil this is settled (and any deed restrictions are removed on that sale). I don't think Universal's getting Ripley's parcel anytime soon, but I guess we'll see.

If this parcel's right next to a new Universal park, as it sure appears it will be, Ripleys could have the opportunity to build an "almost" on property resort, stick some of its own attractions within walking distance, and do really well with it. They could be looking to create another I-Drive 360 with their own attractions, except even closer to Universal's new park.

It's complicated by this bankruptcy and the debt/obligations on Stan Thomas' properties.

Think about it like this, Universal doesn't want to help him refinance those 3 parcels in bankruptcy by bidding up the value of the properties around them.

If you recall, Universal was actually close to a deal 1.5 years ago to purchase some of the connectors/wetlands/stormwater tracts from UCPM III, but then Stan Thomas raised the price so he could raise enough from that sale to refinance the debt on those 3 parcels.

That's sort of where the problem is right now; Universal doesn't want to raise the value in a way that a financier/bank/fund could say "Okay those 77 acres in the 3 parcels are now worth $70 million so we'll help you refinance your note"..., Universal wants those parcels to stay in bankruptcy the whole way until they're ultimately sold in bankruptcy on the cheap to Universal.

So my guess would be that Universal will at some point contact Ripley's about that 40 acres, but if they do cut a deal, it would be somewhere near the end of the bankruptcy process for those 3 parcels, probably around late-2019.

I know business really isn't like this but could Universal be manipulating the situation a bit harder due to Thomas trying to enforce the land restriction?
Thomas just looks like a ******* doing that and as far down the hole as he is I think he doesn't care about the rep. But to raise a restriction put on by Universal and then twisted by ST to try to keep Universal out is bizarre.
My feeling is that the court will rule the restriction dies with bankruptcy and Universal gets to clean up the picture. Maybe they will "squinch" it.
Does Universal want to delay long enough for it to rinse out this summer/fall? But if ST sold a couple of other things he could drag the suit out for a very long time.
Love watching to see how this all shakes out. It will go down in themepark history and might be called "the consolidation era" for Orlando.

Universal is really just being prudent by trying to buy at the lowest possible prices; it's obviously prudent even though the values of these lands will soar 5-7x when Universal's building on/around them.

But yeah, the closer we get to a trial on the lawsuit, the more likely we'll be to get to resolution. Everybody knows that most of Thomas' UCPM III land only has value to Universal.

That's especially true if those 3 parcels in bankruptcy go through bankruptcy and are transferred to Universal. At that point, Thomas might be holding 500+ acres of wetlands/stormwater tract and maybe only 50-80 acres of immediately buildable land. So yeah, he's really just trying to squeeze Universal for every dime, but there's no way for Universal to end this faster.

 

[Happytycho]

But yeah, the closer we get to a trial on the lawsuit, the more likely we'll be to get to resolution. Everybody knows that most of Thomas' UCPM III land only has value to Universal.

That's especially true if those 3 parcels in bankruptcy go through bankruptcy and are transferred to Universal. At that point, Thomas might be holding 500+ acres of wetlands/stormwater tract and maybe only 50-80 acres of immediately buildable land. So yeah, he's really just trying to squeeze Universal for every dime, but there's no way for Universal to end this faster.

I'm not sure that most of Thomas' UPCM III land has value, even to universal. From statements made in the lawsuit proceedings it appears that the only land suitable for development is the SLRC land, the 6 bankruptcy parcels, the 2 FQP 117 parcels, and the land on which the substation sits. Everything else is either wetlands or drainage. There are also statements that imply that SLRC (or the property owners association?) has a right to simply take over the drainage system stuff, but I'm not sure what land exactly that includes. The negative is that UCPM has the land/rights that would be necessary if SLRC/Universal wanted to simply remove the lake in the middle of their large property.

I would also encourage not just thinking about the land itself but also what land use rights come with it. The land use plan for the area puts numbers on who can build what where, so the allotments that each parcel comes with could also be an important factor in what they are worth, and something worth looking into more closely.

 

[JungleSkip]

There's a restaurant in Milwaukee and Chicago called SafeHouse that is really neat. I'd love a concept like that at Universal.

Off topic, but I've wanted them to make one of these in a New York façade forever.

 

[shiekra38]

Off topic, but I've wanted them to make one of these in a New York façade forever.

It has a Bourne Identity salad...S y n e r g y

 

[Teebin]

The negative is that UCPM has the land/rights that would be necessary if SLRC/Universal wanted to simply remove the lake in the middle of their large property.

When were these land use rights applied and by who? Why can’t they be removed if/when Uni acquires the land?

 

[Doug A.]

The lawsuit is basically Stan Thomas trying to halt development of a theme park on the property. Originally, the Vivendi sale restrictions on the land prevented non-Universal operators from building theme parks on the land. Stan Thomas changed the restrictions to apply to all theme park operators a few years before the foreclosure.

Then the foreclosure happened and the land was bought by Universal.

So the question is whether the old restrictions (from the original land sale by Vivendi) or the newer restrictions made by Stan Thomas should apply.

There's all sorts of questions of whether the restrictions were properly made or whatnot, but those are for a judge to decide later this year.

When were these land use rights applied and by who? Why can’t they be removed if/when Uni acquires the land?

This should clear up what you were asking @Teebin original sale from vivendi placed restrictions and then Stan Thomas just expanded them to prevent universal from doing anything.