Inside a Goshen, N.Y., catering hall, a crowd of locals gathered last month, playing with miniature Lego blocks and posing with life-size brick characters. They were waiting to hear how a British company planned to build a huge amusement park in their midst.
When the well-coiffed representatives of London’s Merlin Entertainments Plc appeared, they explained to the skeptical crowd why their small town, some 60 miles north of New York City and miles from mass transit, would be a great location for North America’s third Legoland, along with a Lego-themed aquarium and a Lego-themed hotel. At least one of the town’s denizens wasn’t swayed.
“They come in and say they’re going to be good neighbors,” Debra Corr, a Goshen resident, said of the Legoland proposal. “They’re not good neighbors.”
If you’ve ever touched a wax statue or taken a selfie with a 6-foot Lego figurine, chances are you’ve been to a Merlin Entertainments-operated attraction. Though the corporate entity lacks name recognition in the U.S., its brands are somewhat better-known: Madame Tussauds, Sea Life, the London Eye, and of course Legoland. As the second largest theme park group in the world by attendance, Merlin boasts 62.9 million visitors a year, according to data collected by the Themed Entertainment Association, or TEA. But being No. 2 doesn’t mean Merlin is anywhere close to the industry leader. Walt Disney Attractions gets more than twice as many visitors and dominates the list of most-attended parks. None of Merlin’s parks is even among the top 25 most visited globally.
Legoland parks are highly interactive, more so than other amusement parks, allowing children to build their own creations. At its California location is a miniature “Highlights of America” tour, including all the nation’s top attractions constructed from the ubiquitous little blocks. There’s also a Lego movie theater featuring its trademark blockbusters, meet-and-greets with the characters, and all the mechanical rides and roller coasters typical of a theme park.
As family-friendly as that sounds, the U.S. amusement park industry is pretty unpleasant. Data kept by the National Amusement Park Historical Association shows that while 27 parks have opened around the country since 2010, 55 have closed. Even a tourist-saturated location doesn’t guarantee success: Hard Rock Park in visitor-heavy Myrtle Beach, S.C., shut after less than a year, struck down by the Great Recession. For these reasons, a Goshen Legoland is far from a guaranteed success.
With four venues outside the U.S. and two more on the way, Merlin has been eyeing expansion into the Northeastern U.S. for some time. Rather than go head to head with the giant mouse, the company has fashioned a midsize strategy, as underlined in a 2014 TEA report. In it, the association noted that while “Merlin Entertainments continued its upward momentum,” it faces “a somewhat mixed picture for their midway attractions.” The report cites political unrest affecting projects in Thailand, poor weather on the U.S. East Coast, and a “delay in the capital investment program.”
Even with these challenges, the company has grand plans for America, seeking to replicate its successful midsize seasonal parks in Denmark, the U.K., and Germany. It has no desire to try to match the scale of the small cities built by Disney: Merlin’s Florida Legoland is, at 150 acres, only a small fraction of the 40 square miles that constitute the nearby Walt Disney World Resort. Focusing on the midsize market gives Merlin a unique advantage in the themed attractions business, said Jim Futrell, historian for the Pittsburgh’s National Amusement Park Historical Association, because development costs tend to be lower. “These smaller parks help them … define their niche, which is families with preteen children,” Futrell said. “Scattering a number of smaller parks, vs. having a Disney-style [park], can draw a big customer base.”
But first, Merlin has to win over the good people of Goshen.
Not in My Backyard
Before Goshen, Merlin explored building a Legoland in Virginia. More recently, the company looked at two towns closer to New York City—Haverstraw and Suffern. Locals there didn’t rush to embrace the amusement park, either. “We didn’t want to divide our community,” Haverstraw town supervisor Howard T. Phillips Jr. said, expressing regret that his town lost out. Merlin said its park, wherever it landed, would create 800 local construction jobs, 500 full-time, year-round jobs and 800 part-time and seasonal positions.
The not-in-my-backyard mentality extended upstate to Goshen. While some area residents support the arrival of the theme park, others asked questions about traffic patterns, taxes, and even infrastructure—allotment of fire and police department staff were discussed. There were concerns the water system wasn’t designed to handle an influx of Lego enthusiasts (a worry alleviated by an independent analysis that found the systems are sufficient). Whether or not Merlin can plow ahead in Goshen will depend largely on whether the town’s 14,000 residents can be persuaded that as many as 20,000 visitors each day of the season will be a blessing, not a curse.
“We know there are some who are opposed to the park, but we are finding we have many more residents who support it because of the many long-term benefits it will bring to Goshen and greater Orange County,” a Legoland spokeswoman said in a statement. Among those benefits are the economic runoff to local businesses and the potential tax income.
Legoland, however, has also requested a 30-year payment in lieu of taxes, allowing it to forego property taxes on the 523-acre site. Instead, it wants to pay a total of $52.6 million, as well as community fees calculated per visitor totaling $39 million (based on 2 million visitors per year). The company will also pay sales and hotel taxes over the 30-year period, but the tax exemption request still drew the ire of locals. TEA President Steve Birket noted that such provisions are common, and Legoland said the “agreement is essential for this project to move forward.”
“The court of public opinion is an important part of this discussion,” said Lee Huang, senior vice president and principal of Econsult Solutions Inc., an urban planning firm. He says amusement parks can yield benefits for the towns where they’re built. But he added that no matter how good the deal, projects like the one proposed for Goshen can’t get off the ground without community support. “They are literally and figuratively playing host.”
Location, Location, Location
Taking the kids to Disney is an event, one that typically requires airline tickets, hotel stays. and several thousand dollars. As a result, Disney’s parks are referred to as destination attractions because they are impressive enough to draw out-of-towners for extended stays. Smaller, more remote parks are referred to as regional parks. And many of these (as would be the case with Legoland Goshen) are seasonal, and thus intensely dependent on a good summer turnout. Disney’s established destination parks operate year round.
“Disney doesn’t have to go anywhere. People come to them. People fly in from all over the world,” explained Bloomberg Intelligence analyst Paul Sweeney, who focuses on amusement parks. “Disney properties draw globally. Everyone else draws locally.” Disney representatives didn’t immediately return an e-mail seeking comment.
Legoland’s New York location will be the first of its American parks that isn’t Disney-adjacent. In Florida and California, its parks are situated within Disney’s orbit, close enough to peel away visitors for a day of brick building. In Orlando, Fla., home to Disney and essentially America’s theme park capital, Merlin operates a shuttle bus that takes visitors to the Legoland in Winter Haven, about 45-minutes away. “It’s not Orlando, but it draws from Orlando,” explained Birket. Amusement park historian Futrell added: “There was a lot of skepticism in the Orlando theme park community: Will this park an hour outside the theme park hub be able to survive? Merlin has done a good job tying it in.”
In New York, Futrell hypothesizes that Merlin could leverage its existing attractions in the Big Apple to draw people up to Legoland. In Times Square, Madame Tussauds is a hugely popular attraction, and there is a Lego Discovery Center in Yonkers, just north of the city. Would Merlin run a shuttle from either or both of these locations to the Goshen Legoland? Legoland wouldn’t comment beyond saying it’s in the “early stages of looking at transportation options.” There are no train stations in Goshen. The closest one with a direct route from the city, in Middletown, N.Y, is about seven miles away.
Legoland as Destination
While Sweeney argues that Disney is the king of destination parks, and Legoland is generally seen as regional, Merlin says the Goshen location can be a destination.
“We will draw people from as far as Boston and Philadelphia in addition to New York City. We would expect it to be a destination park with one-third tourists, one-third locals, and one-third day trippers in terms of guests who would visit,” the company says. At the catering hall open house, the Merlin representative said that would include international tourists.
But industry findings cast doubt on these projections: The majority of theme park visitors, some 64 percent, stay only for the day, according to a 2011 survey by the International Association of Amusement Parks & Attractions. Only about 25 percent said they were willing to stay overnight.
Nevertheless, Futrell says Legoland Goshen could prove a success given Lego’s name recognition, unique attractions, and themed hotels. “I think any location challenges can be mitigated a lot by the quality of the product,” he said. “You have to be a very smart operator, and in the case of Merlin, they know what they’re getting into.”
©2016 Bloomberg L.P.
This article was written by Deena Shanker and Polly Mosendz from Bloomberg and was legally licensed through the NewsCred publisher network.