Why SeaWorld Is Being Sued For $12 Million By The City Of San Diego
Usually, a theme park and its home location have a pretty firm relationship. Parks typically brings jobs and tourist revenue to a city, often making them some of the most important businesses in the area. This in turn often gives the park special privileges that it can use to make doing business easier and make more money. That relationship has gone sour for Walt Disney World, which is both suing Governor Ron DeSantis and being sued by the new Central Florida Tourism Oversight District. Now, SeaWorld has found itself in a similar situation, as it is the target of a $12 million lawsuit filed by the city of San Diego.
The suit that was filed by the city on Thursday, according to Theme Park Insider, is worth $12.23 million and constitutes three years of rent the city says is due for the years 2020-2022. SeaWorld has a 50-year lease for the 190 acres that make up the park, all of which are still owned by the city. The entity pays its rent as a percentage of its revenue, but there is a minimum payment of $10.4 million over the course of the three-year period which, when interest and penalties are added, leads to the figure being asked for in the suit.
Of course, the catalyst for this non-payment all leads back to the global pandemic. SeaWorld closed in March 2020 along with all other theme parks in the state and, while it opened for a few months between August and December, solely as a zoo, it closed again and only reopened with significant capacity restrictions, in April 2021. As such, there was a significant period in 2020 and 2021 where SeaWorld had no revenue -- and several more months where that revenue would have been only a fraction of normal.
The aquatic-themed amusement park has apparently paid some of the rent for the period in question but has been working with the city of San Diego on a plan to pay the rest. The city, however, has apparently decided it’s done waiting. It authorized a lawsuit in May and has now followed through on that threat. It seems whatever deal the city and the theme park were trying to hammer out has reached an impasse.
COVID-19 was brutal for the theme park industry, especially in California where parks were unable to return to full operation for over a year. SeaWorld, which has seen profit crashes in past years, was one of the few that even had the ability to reopen at all, as state guidelines allowed zoos to reopen before theme parks. So it had some options that places like Disneyland did not have. Still, most parks still haven’t seen attendance numbers return to pre-pandemic levels yet. SeaWorld has actually seen total attendance go down slightly compared to last year according to the company's most recent earnings report.
SeaWorld did have one strategy to try and bolster itself following the pandemic. In early 2022, it attempted to purchase competitor Cedar Fair, which had found itself struggling even more following its own closure. The buyout offer was eventually rejected by the Cedar Fair board.
