San Antonio Metro Recreation/Tourism Opportunity

Cave Attraction and ~100 Site (103-acre) RV Park Lease

The Business

Cascade Caverns is one of the seven (7) “Show Caves” of Texas and the oldestcommercial “living”cave(it opened to the public in 1932). For more than 70 years, the cave attraction was the primary activity on the 103-acre, leased property although there were some non-hookup and electric-only tent sites added as a sideline business in the 1970s. From 2005 to 2009, around 45 full-hookup RV sites with 30-50 Ampelectricals were added (the campground now covers about 25% of the property). A modern water system was also installed in 2008 and two bathhouses/restrooms including a laundry were renovated from 2006 to 2009. There are 12 buildings/structures on the property. Some of the other features of the business are:
  • Current explicit and implied commercialzoning status with plenty of “grandfathering.”
  • 103 acres of gross leased propertywith close to 17,000 square feet of usable building space. Current property utilization is about 25% (plenty of room for expansion). Three of the buildings date back to 1932 and the cave is recognized as a Texas state landmark.
  • 1,000+ feet of paved, private roadway/parkingleading from the park entrance to the gift shop/ticket office.
  • A modern water system installed in 2008 with capacity of 19 GPM or 27,360 GPD. Wastewater system capacity of almost 3,700 GPD. Laundry has 8 washers & dryers.
  • Centrally located just 2.5 miles fromUS Interstate 10 and Texas State Highway 46. I-10 provides quick access to San Antonio while Hwy 46 connects to Austin.
  • Signage on both I-10 West at Exit 543 as well as Hwy 46 West (3 signs). Two other signs are placed strategically on I-10 East at Mile Markers 534-535.
  • A colorful history which includes filming of the 1993 movieFatherhood (with Patrick Swayze) at Cascade Caverns and the prizewinning novel, EinVerfehltesLeben(“The Hermit of the Cavern”), published in 1876 that tells the story of a German immigrant who lived on the property during the Civil War.
  • AAA, Good Sam-Woodall’s, TACO other memberships.

Ownership

The Cascade Caverns business is owned by the Cascade Cavern Corporation, a private, closely-held Sub-chapter S entitywhich was incorporated in the State of Texas in 1965. The business assets consist of a 100-year lease which commenced in 1951 – there are approximately 40 years remaining – and twelve (12) buildings which were constructed over the past eighty years. The property (real estate) is owned by a local family and the business pays them a portion (10%) of gross cave tour receipts monthly (camping and souvenir receipts are exempt). The current shareholders are interested in selling the businesssince they live outside the state and believe the business deserves local ownership. /

Key Investment Considerations

  • Location - The business is located in the San Antonio Metro Area and the Texas Hill Country in the “heart” of Central Texas. San Antonio is the Lone Star State’s most popular tourist destination for reasons contemporary, historic andnatural. The Alamo represents one of America’s most cherished historic landmarks and the River Walk is a major destination for shopping, dining and historical sights. Outside the city, San Antonio boasts theme parks such as Six Flags Fiesta, Seaworld, Schlitterbahn and three show caves (Cascade Caverns, CWAN and Natural Bridge).
  • Favorable Demographic Trends-The business is well positioned to capitalize on the trend toward value-oriented entertainment and hospitality options for families.
  • Market Position & Reputation – Cascade Caverns is an established and recognized tourist destination with 80+ years of operating history.
  • Supply Factors – The business is one of just three show caves in the San Antonio metro area and one of only two campgrounds/RV parks in the immediate Boerne area. It is the only hybrid “camping-caving” business in the region.
  • Local Economy – The San Antonio metro area is dominated by the tourism industry. An opportunity exists to develop a market-leading “hybrid” business (attraction-campground) on this site catering to the local families and cross-country RVers.
  • Feasibility –Property ownership is incorporated as a “Sub-chapter S” corporation (tax efficient in a sale per IRS Section 338) and lease payments can be deducted by the lessee as a business expense. The company and property have no environmental, financial or legal liabilities.
  • Zoning –The business lies in a “Rural Residential” zone in the southeastern section of Kendall County. Most of the buildings in the park (i.e. property) are recognized by the local tax assessor as “commercial.”
  • Strong Return Potential – A significant opportunity exists to put this property to greater economic use byexpanding the campground furtherand/or adding other tourist amenities to complement the natural attraction (e.g. conference center, executive retreat, spa, etc.).Camping historically accounted for about 5% of sales but rose to more than 25% of park receipts in 2012. Growing the annual camping-caving business to $500k+ can be accomplished within 5 years with targeted marketing and infrastructure investment.

Deal Terms

Asking price for the business assets and lease is $1.04 Million. Owners prefer to deal with principals but will consider broker “pocket” listings. Cash offers are preferred. Offers should be made in the form of a purchase/sale contract or letter of intent (LOI) spelling out the proposed transaction terms. Short due diligence periods will be given priority.

Income Statements (P&L)

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Map of the Park

/ Map of the Cave

For more information on this opportunity, please contact:Lance B. Kyle

Tel: (703) 785-7953; Fax: (888) 704-9671

E-mail: