ROCKFORD — The Rockford Park District will turn over management of Magic Waters water park to Six Flags Entertainment Corp., which operates approximately 30 amusement parks worldwide, including Great America in Gurnee.

Park district commissioners unanimously approved a 10-year lease agreement with Six Flags during Tuesday’s board meeting.

For months, the financially struggling park district had been seeking to lease or sell Magic Waters as part of a community-driven strategy to shift resources toward neighborhood parks and youth programs.

Magic Waters has been a financial drain on the park district in recent years because of maintenance costs and declining attendance.

“What we heard loud and clear from our community is they want the park district to be focusing on neighborhood parks,” said Jay Sandine, the district's executive director. “This is going to allow us to really do that. It’s perfect timing for just coming out of this year of engagement that we’re really excited about.”

The agreement calls for Six Flags to pay the park district $425,000 annually for 10 years, with options for an extension. Magic Waters staff members will be Six Flags employees. Six Flags has also agreed to make a minimum capital investment in the property, though it’s unclear what that minimum investment will be.

“There are some things we want to do,” Six Flags Great America Park President Charles “Hank” Salemi said. “Obviously, we’re going to capitalize both from marketable attractions, whether it’s water slides or pools or whatever we decide to do as we get into the process and some of it is maybe paving more of the parking lot or putting new facilities in.”

The park district will continue to own Magic Waters. The lease agreement is contingent upon the extension of property tax abatements on the property.

“We’re asking these governments to maintain the status quo,” park board President Ian Linnabary said. “They don’t collect taxes on the property right now and we think in exchange for that agreement and allowing this to go forward, there’s a lot of value that will be realized by those communities in a lot of different ways.”

The Rockford Public Schools, Rock Valley College, Winnebago County and the village of Cherry Valley are among the 11 taxing bodies that will be asked to extend the property tax abatement.

While the park district is currently exempt from paying property taxes on Magic Waters, the tax-exempt status would change once the property is put to a for-profit use through a lease arrangement, Linnabary said.

Six Flags representatives approached the park district about Magic Waters earlier this year.

“We came and visited the water park and it blew us away,” Salemi said. “As we looked at it, we thought this is one we ought to pursue.”

Magic Waters was privately owned and operated when it opened in 1984. The park district acquired the water park in 1988 and has operated it ever since.

The park district has borrowed millions over the years to pay for maintenance and new attractions at Magic Waters.

“We have a $580,000 bond payment every year for the water park,” Sandine said. “So that $425,000 (from Six Flags) is going to help offset that and bring it down to a smaller gap, and then we believe we’re going to have other savings districtwide not having to support this huge operation. This is more of a break even for us.”

The park district’s bond payments for Magic Waters are scheduled to continue for 17 years, Sandine said.

Six Flags expects to take over operations at Magic Waters in the spring, provided the lease deal is finalized.

“We do everything in house,” Salemi said. "Food and beverage and retail and rentals and parking. We’ll do all of that in house. It will be Six Flags employees that do that. We just have to look at the market.”

Also to be determined is how the lease deal will affect Magic Waters admission prices and whether parking will remain free.

“This isn’t going to be a sticker shock,” Salemi said. “When we have price increases at our existing parks, it’s a very gradual process. We don’t jump out and raise prices ten dollars.”

One component of the deal, Salemi said, is that season passes to Magic Waters will be good for admission to every Six Flags property. Conversely, season pass holders at Six Flags parks will be able to visit Magic Waters for no additional admission cost.

Magic Waters has three full-time employees and approximately 300 seasonal workers each summer.

“They have an opportunity to become Six Flags employees,” Sandine said. “If they don’t want to be, then they’ll remain park district employees. But, they’re going to stay out there and help out at the water park until they’re at a point where they feel comfortable.”

Six Flags is the largest amusement park company in the world based on the number of properties owned and is ranked seventh in terms of attendance. Six Flags properties hosted more than 30 million guests in 2017.

“First and foremost, we don’t talk about our culture without talking about safety,” Salemi said. “It’s everything we do, it’s everything we talk about, it’s everything we preach. We have a mantra that we train and talk about and really reinforce in everything we do is extremely clean, fast and safe service. It is absolutely a guest service culture.”

Park district officials say the lease agreement with Six Flags will benefit Magic Waters customers and park district residents.

“Taxpayers are going to get a better product,” Linnabary said. "They bring resources to bear that the taxpayers simply can’t match, so the community will get a better-run water park with better attractions and we’ll get the benefits of all of the increased traffic that they anticipate they’ll be able to bring.”

The anticipated attendance spike would benefit other local tourism and entertainment venues, Linnabary said.

“We’re talking about increased sales tax revenue, more heads in (hotel) beds, more traffic in our restaurants and at our hotels and other local attractions,” he said. “It allows us to do that cross-marketing for our sports tournaments, which is really part of the park district’s bread and butter.”

It’s unclear whether Magic Waters will be renamed.

“Six Flags has the ability to use the name Magic Waters if it chooses to,” Salemi said. “Our water park brand is called Hurricane Harbor. There’s a lot of brand equity in Magic Waters. It’s been here since 1985. I think we have to take that into consideration.”

Magic Waters attracted 135,780 customers over the summer. That's down 27 percent from 2015 figures. The water park routinely attracted more than 200,000 customers in the early 2000s and drew nearly 300,000 people in 2001. Magic Waters ran a $573,478 deficit in 2017. This year's preliminary deficit is $117,509 but the figure is expected to climb.

“It’s such a weather-dependent operation,” Sandine said. “We’ve had some bad weather years where the taxpayers have had to subsidize the operation of Magic Waters and, in my estimation as a taxpayer, we shouldn’t have to do that."

The lease agreement with Six Flags is a "once-in-a-lifetime opportunity" for the park district, Sandine said.

“This is one of those rare instances where it’s really a win-win for everybody,” Sandine said. “For the park district, for Six Flags, and most importantly in my mind, it’s a win for the taxpayers and the community.”

Ken DeCoster: 815-987-1391; kdecoster@rrstar.com; @DeCosterKen