The Gibson statue was iconic, but it wasn’t the park’s largest structure. That was Led Zeppelin The Ride: a roughly 150-foot tall rollercoaster designed in partnership with the band and synced to its 1969 hit, “Whole Lotta Love.” Riders boarded inside a life-sized airship, and speakers blasted the song’s breakdown as they were cranked up the lift hill; the iconic guitar riff kicked in as the train hurtled out of the first loop.“It started out as nothing," says Jim Burton, former technical director of the park. "Nothing but a dream. And then the dream comes to life. We saw it in its glory, saw the dream, and the reality. And now it’s returning back to ashes.”
In its evolution from baby-boomer fever dream to extravagant multi-million dollar reality, Hard Rock Park exemplified the manic speculation of the years before the financial crisis; the story of its spectacular failure is a cautionary tale of what can happen when expectations become untethered from reality.“The old days of ‘build it and they will come’—they don’t exist,” said Dennis Spiegel, a theme park expert who was hired by one of the park’s investors to conduct a post-mortem after it first closed. “It was probably the biggest failure we have ever seen in our industry, in the shortest period of time.”“It was probably the biggest failure we have ever seen in our industry, in the shortest period of time,” said Dennis Spiegel, a theme park expert.
Binkowski’s work at SeaWorld had won plaudits, and Renaissance—which he still runs—had picked up design and development contracts from the likes of Disney and Universal Studios. But he struggled to attract visitors to the Ice Castle. He thought building an amusement park next to it might draw a bigger crowd, so he drew up blueprints. Initially, he had trouble finding financial backers—until he met Steven Goodwin, a former executive at British entertainment conglomerate Rank Group, who encouraged him to think bigger.“It’s easier to raise a hundred million than ten million,” Goodwin told me over the phone from North Carolina, where he now runs a vacation rental business. “Small investors get cautious about deploying modest amounts of capital. But if you have a quality product and show the potential for higher returns, money follows money.”Goodwin, who would go on to become the park’s CEO, helped Binkowski expand plans for a park, named Fantasy Harbour in recognition of the complex the Ice Castle had belonged to. Thinking that a generic theme would be cheaper than licensing an existing brand, they proposed framing the park around the four seasons. Investors thought this was too plain, so Binkowski countered with plans for a park themed around various Hollywood movies, in partnership with MGM Studios; this, he told me, turned out to be prohibitively expensive.“It’s easier to raise a hundred million than ten million,” said Steven Goodwin, former CEO of Hard Rock Park.
The creators of Hard Rock Park also ignored dissenting voices. “They said it couldn’t be done. So we did it anyway,” Binkowski wrote in The Park that Rock Built, a commemorative book sold in the venue’s gift shop. The park’s financial backers fell for the creative concept and ignored the harsh realities of the market, just as investors were too mesmerized by the intricacy of multi-layered mortgage bonds to remember that their value ultimately depended on over-levered homeowners making their monthly payments. An old adage in investing is that there is no such thing as bad risk, only bad pricing—in both these cases, the risks were heavily mispriced.It’s not uncommon for developers to borrow money to fund construction projects, but such deals are rigorously built around demand: Hospitals, airports, hotels, and apartment buildings are generally launched into well-established markets. The fact that lenders were willing to fund an extravagant and completely untested concept like Hard Rock Park epitomizes the mentality of the pre-crisis boom. As investment banker William Welnholfer told the Wall Street Journal in 2009: “Only in 2005 or 2006 could you raise this type of financing without some reasonable assurance that the business plan would work.”A decade on from the financial crisis, the economy has not just recovered but boomed. Along the way, investors have poured billions of dollars of equity funding into fast-growing sectors like technology, hoping to own a piece of the next Apple or Amazon. And as the memory of the last credit-fueled meltdown has faded, debt investors too are being drawn in by the hype around these kinds of businesses. Huge companies like Uber, Tesla, and WeWork have little in common with Hard Rock Park, but they are similar in one important sense: They’ve all managed to borrow money from typically conservative investors without demonstrating positive cash flow. And as with the park, they’ve done so partly by appealing to the kind of emotional impulses—optimism, enthusiasm, fear of missing out—that the people looking after our pensions and savings are supposed to resist.Economists now say the post-crisis economic expansion has peaked. Housing markets are slowing again, and companies are warning of lower profits. These are just some of the factors that contributed to a frenzied selloff in financial markets during the last three months of 2018. This increased volatility isn’t a disaster, and there are many other influences at play, from global trade tensions and political uncertainty to the increasing role of computer-driven trading in the stock market. But it does suggest investors have been underpricing certain risks, and for many people, this triggers anxious memories of the months before the 2008 crash.“They said it couldn’t be done. So we did it anyway," Jon Binkowski wrote in a book available in the park's gift shop.