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Friday, Jan 27, 2023

Splish, Splash: Belmont Park Owner Is Making Waves, Literally

Tom Lochtefeld likes to create waves.

After spending years rehabilitating the once-closed Belmont Park, a historic amusement park anchored by the Giant Dipper roller coaster in Mission Beach, and revitalizing it with FlowRider wave machines , his own invention , and an outdoor eatery, he’s now launching more improvements, thanks to $17 million in refinancing.

Two weeks ago construction of a new walk-up window eatery on the south side of the midway devoted to retail shops and carnival attractions was nearing completion. Another FlowRider there would bring the park’s count of wave machines to three. In keeping with the beach-at-the-beach theme, plans also call for a sand-laden patio and palm trees next to the new wave maker. All would be open by the end of May, he said.

Meanwhile, four roll-up doors with windows were also being added to replace the fixed windows on the fortress-like building that houses the historic Plunge, one of the largest indoor pools in Southern California.

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Expanding an outdoor deck closer to the exterior wall would help integrate the new with the old, Lochtefeld said.

“The pool is a money loser,” he said. “This (the new doors) will open it up and give a pool-party feel. It will also increase food and beverage revenue.”

The retail shops, game booths and kiosks are subleased to independent tenants, as are the rides, including the 83-year-old roller coaster, while Wave House, Lochtefeld’s company, operates the Athletic Club, which includes the pool and the FlowRiders.

A lawyer and avid surfer who grew up in Pacific Beach, Lochtefeld made his fortune developing water parks and installing wave machines around the world.

His future plans for Belmont Park include three more FlowRiders and possibly a 250-room hotel on the 18-acre, city-owned lease hold. That would necessitate underground parking, however, and local residents are apt to complain that a hotel would bring additional traffic on already clogged arteries leading to Mission Beach.

“But it’s illogical to assume that a new hotel would attract an influx of people,” he said. “The fact is the people are already coming.”

Sound Of Money

The cost of the latest improvements will be about $2 million. The new loan will be used to cover that tab and previous debt with higher rates. In times like these, obtaining refinancing at 6.75 percent interest on the basis of the park’s “seasoning of revenue streams and proven management” exemplifies a return to more traditional lending practices, Lochtefeld said.

He acquired the park’s master lease in May 2002 for $6 million borrowed from a local bank, then invested $4.5 million out of his own pocket to cover the cost of initial fix ups and razing one old building on the boardwalk. He spent another $5 million of his own money to add the Wave House Bar and Grill and the first wave machine. During the first five years of operation, he borrowed a total of $10 million in short-term financing at 11.5 percent interest, he said.

“That was just killing me, but I had to get the operation kick-started and then prove out the business model,” he added.

The park’s revenue rose from $9.6 million in the first year of operation to $20 million last year. Wave House’s rent to the city is 5 percent of gross sales. Last year that amounted to $140,000 in cash and a credit for $860,000 worth of previous capital improvements. His lease came with an obligation to invest $4 million by 2006 and to invest an additional $5 million by 2010. The cost of improvements may be used to offset the rent, but a minimum rent of $140,000 in cash is due to the city annually.

According to the online newsletter, GlobeSt.com, Scott Abell of Cushman & Wakefield’s San Diego Real Estate Finance Group helped arrange the refinancing through East West Bank, which has its headquarters in Pasadena. He said it was not an easy sell since it’s a one-of-a-kind development. It took a year to complete the deal.


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