by Joe Kleiman, InPark News Editor
May 24, 2018 — In a report of quarterly financial earnings filed with the Securities and Exchange Commission (SEC) on May 9, real estate investment trust EPR Properties stated that it “has provided mortgage loans . . . . which were originally utilized . . . . to construct the Schlitterbahn Kansas City Waterpark and develop excess property adjacent to the waterpark in Kansas City, Kansas (The “Project”). The aggregate outstanding principal balance and related accrued interest receivable for the mortgage loans was $176.2 million at March 31, 2018 . . . . The loans are secured by the Project and certain additional waterpark properties . . . . located in New Braunfels, Texas and South Padre Island, Texas. On March 21, 2018, [the park developer], one of the owners . . . . and certain related parties were criminally indicted on multiple counts in connection with the investigation of a 2016 fatality that occurred at the waterpark.
“Recent criminal indictments against [the] waterpark mortgagor and certain related parties may negatively impact the likelihood of repayment of the related mortgage loans secured by the waterpark and other collateral and have a material adverse effect on [EPR Properties’] business, operating results, cash flows, financial condition and liquidity.”
The first mortgage loan agreement for the Kansas City property was made with Schlitterbahn’s developers in March 2007. As of March 31, 2018, all three parks were listed on EPR’s owned property list, as are the six parks now managed by Six Flags (the five announced this week and Hurricane Harbor, in Concord, CA).