Aerial view of deadly Verrückt water slide being dismantled at Schlitterbahn
Schlitterbahn is working with an unidentified party to pay off its $190 million mortgage with Kansas City-based EPR Properties, an executive with the real estate investment trust said last week.
The move could signal a financial restructuring or potentially a sale of the water park.
Winter Prosapio, a spokeswoman for Schlitterbahn, said the privately held company does not comment on financial information.
Schlitterbahn’s mortgage with EPR Properties included its Texas water parks as collateral for the loan.
Asked if Schlitterbahn was for sale, Prosapio said, “I’ve got no further information other than our Texas parks are off to a great season.”
She said there were no announcements about the Kansas City water park, which has not revealed an opening date for the 2019 season and is not currently selling tickets or season passes. Most water parks and commercial pools in Kansas City open during or around Memorial Day.
EPR Properties chief executive Gary Silvers told analysts last week that he has “a high degree of confidence” that the Texas-based water park operator, which runs the Schlitterbahn attraction in Kansas City, Kansas, will complete a deal to repay EPR Properties’ note during the second quarter of the year.
“Based on discussions with the Schlitterbahn Group, we understand that they are nearing the completion of a definitive agreement with a third party that would provide proceeds sufficient to fully repay the note,” Silvers said during a conference call in which EPR Properties was discussing the company’s first quarter performance.
For more than a year, EPR Properties had warned investors in regulatory filings that there was a possibility that Schlitterbahn may have difficulty repaying its loan as it grappled with legal troubles and negative publicity tied to the 2016 death of a 10-year-old boy on the Verruckt water slide. Earlier this year, EPR Properties disclosed that it had given Schlitterbahn advances to cover legal fees and a cash flow shortage during its offseason.
Silvers did not identify the entity working with Schlitterbahn and a spokesperson did not return a call seeking further comment. In the conference call, Silvers referred a question about the water park company’s financial arrangement to Schlitterbahn.
“I think it’s probably better for them to answer that question as to why they’re changing their strategy,” Silvers said. “I think it could be a number of different issues, it’s been well documented, it’s been a difficult couple of years for them with all of the noise.”
Schlitterbahn and others involved in the design and construction of the 17-story Verruckt water slide paid the family of Caleb Schwab a nearly $20 million settlement after the boy died when his raft went airborne on Aug. 7, 2016.
Later, five Schlitterbahn employees and associates were indicted by a Wyandotte County grand jury on criminal charges that portrayed the defendants as building Verruckt without qualifications or regard to safety and then attempting to cover up investigations into Caleb’s death.
Of those defendants, two went on trial and were acquitted and three others later had the charges dismissed when a Wyandotte County judge ruled that the Kansas Attorney General had shown improper evidence to the grand jury in order to secure the indictments.
The Kansas Attorney General can pursue the case anew, but there’s not yet an indication that it will.