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Friday, July 25, 2014

Lottemaa : A Horrible Ride for the Taxpayer

Lottemaa : The Amusement Park that Fails to Amuse

Not Lottemaa. They don't have any roller coasters. Or rides.

For the 10% of Estonians not currently on vacation in the month of July, the country has been abuzz with talk of the opening of Lottemaa (Lotte's Land in English).

Who is Lotte? Don't go to Google to figure this out. It turns out Lotte is a popular name for a lot of things, including a major conglomerate in Korea, that protested the name Lottemaa and caused delays until an agreement could be reached. Why would some Korean company care about Lotte's Land? Perhaps because they already operate a major theme park known as Lotte World:

Typical Estonian family in front of Lottemaa? Nope, that's the Korean version!

It turns out Lotte is also the name of a famous Dutch actress:
Lotte Verbeek: "Come into my world!"

After intense research, we also discovered Lotte is a popular name for porn stars, but we'll leave it to our readers to do their own research on that one. Besides, we want to keep this blog safe for work, so all our fans in various Estonian ministries can read it while they're busy at the office.

In fact, Lotte is a cartoon dog beloved by Estonian children:
"I may look cute, but wait until you hear what I did with your money!"
Think of Lotte like a sauna-going, black bread-eating, black socks with sandals-wearing, hot coffee with entree-eating cartoon character. In other words, the Estonian version of Mickey Mouse (or Minnie Mouse, to be more accurate). Numerous Lotte cartoons, books, and merchandise have been sold over the years to eager Estonian children. By any measure, Lotte is the most popular Estonian cartoon character (actually the only Estonian cartoon character, but who cares about the details?).

We Hate it When a Plan Comes Together

So why are we after cute little Lotte? It turns out some of the people behind Lotte (not her boyfriend... we mean the humans who created her) cooked up a cunning plan to set up a Lotte theme park.

On an abandoned Soviet-era missile base.

In a tiny village nearly 2 hours' drive from Tallinn.

With taxpayer money. Lots of it

Before we get into the financial part of this, let's consider: Does Estonia really need a children's theme park?

It turns out Estonia already has two popular children's theme parks (Vembu-Tembumaa and Vudila), and each is close to one of the two largest cities in Estonia. We have heard no reports about tickets being sold out or it being difficult to get in due to overcrowding. This tells us the demand is already being met.

But as we've been told many times, we're all just a bunch of idiots. What do we know about theme parks? Not much, but you know who does? The operators of the legendary Tivoli in Copenhagen. They looked at opening a theme park in Tallinn a few years ago, and decided against it.

But wait! Maybe this Lottemaa will be better than all the other theme parks in Estonia combined. Maybe it will have the tallest roller coasters, the slipperiest water slides, and the fastest bumper cars in the Baltics. Nope! No roller coasters, no bumper cars. No real rides, actually. It's just a bunch of houses in the woods with some activities inside. Here's an actual photo so you know we're not making this up:
More fun than a roller coaster! (Photo Credit)
Oh, and did we mention they plan to be open every year only from May 15 - August 31, and only for 8 hours a day (10.00-18.00)? Oh, and that ticket prices will be 15 euros per person, a high price for most Estonian families, and the subject of much criticism from many parents?

And now... the money

What does it cost to build a bunch of wooden houses in the forest? A lot. So much that the first tender failed because no company could do it within the budget set aside. So Enterprise Estonia had to toss in a bit more (1.2 million more.. but what's a few million between friends right?).

Then the project needed more money. And more money. Here's a list of all taxpayer money involved that we could find. It's mind-boggling:

  1. 73,902 euros. Tender 152020.
  2. 213,880 euros. Tender 151442.
  3. 29,850 euros. Tender 150988.
  4. 644,980 euros. Tender 144566.
  5. 153,380 euros. Tender 144564.
  6. 4,344,314 euros. Tender 144557.
  7. 13,900 euros. Tender 132901.
  8. 535,014 euros. Tender 132368.
  9. 31,955 euros. Tender 128042.
  10. 125,586 euros. Tender 119908.
  11. 280,000 euros from Pärnu city government.
  12. 4,599 euros from Halinga town, a tiny nearby village with a total of 56 children (see page 11). It would have been a lot cheaper to just buy those children season passes.
Ready with your calculators? That comes to 6,451,360 euros of taxpayer money. For a bunch of wooden houses in the forest!

(Side note to journalists at Äripäev: If you're bored and looking for something to write about, dig into the tenders above. It looks like most of them went to the same three companies, and it just doesn't smell right to us.)

Should this have been built? Did the taxpayer need to get involved? The Lotte cartoons are produced by Eesti Joonisfilm (the Disney of Estonia), and they seem to be doing quite well by Estonian standards in terms of making money. Äripäev (Estonian business daily) even wrote an entire article about them titled "The profitable Lotte fever." This hardly sounds like a charity case to us.

Adventures in Theme Parks

Lottemaa has just opened, so we can't really talk about their results yet. What we can look at is the Estonian government's previous adventures into taxpayer-funded theme parks.

Let's think for a minute: What is the stupidest possible idea for a theme park? First, it needs to be located far away from Tallinn or Tartu so that it is difficult for people to get there. It should probably be in a really small town so there won't be enough locals interested in going there either. Next, it needs to have a really stupid attraction. Can you think of a place like this? We can.

Welcome to Kiviõli Adventure Center!

"I said I wanted a mountain of CASH, not ASH!"
No, we're not making this up. They built an "adventure center" on a mountain of ash, way over in eastern Estonia in a city of less than 6,000 people. It's at least a 2 hour's drive from both Tallinn and Tartu.

Yes, their attraction is it's a mountain of ash, the byproduct of Estonia's burning of oil shale to produce power. They must be proud of it, as their website is tuhamagi.ee which means "ash mountain" in Estonian.

Brilliant marketing? Most Estonians reading this blog have probably never been there, but it's been open for a while now.

You really should visit. You paid for it. According to some reports, the project will end up costing over 6 million euros. We could confirm only 3,065,634 euros in taxpayer money so far, based on our initial search.

Market Distortion

Now imagine you're the hard-working owner of the children's theme park Vembu Tembumaa, which has been in business for years. You've built your business over time, using your own hard-earned money. How do you think you'd feel about Lottemaa sprouting up, funded with 6 million euros of taxpayer money?

Is this fair to the free market? Why should some theme parks in Estonia get millions in government money, while the rest are left to grow like normal private enterprises? The Estonian government is usually quite business-friendly, but this tactic of massive handouts to private enterprises to then compete with other private enterprises is not fair at all.

(Note we have no idea if the owners of Vembu Tembumaa are hard-working at all. We've never met them. They could just be a bunch of lazy drunks for all we know.)


Lessons Learned

The Estonian government should not be in the theme park business. There are already private companies who do this, and do it well. There are better ways to spend nearly 10 million euros of taxpayer money (much of which did not come from EU funding but directly from the Estonian budget -- check the tenders we linked to above) than by paying for theme parks in the middle of nowhere.


  1. To add about Kiviõli Adventure Center and their "Estonian Slopestyle Open 2014" event funded with 29 767 EUR according to http://www.struktuurifondid.ee/toetuse-saajate-otsing/?search_criteria=0&searchtype=2&toetuse_saaja=Kivi%C3%B5li%20Seiklusturismi%20Keskus&meede=&kestvus=&kestvus_kuni=&submit=Otsi.

    The result is that the event was cancelled due to warm winter and lack of snow this year: http://www.ticketpro.ee/jnp/sport/994727-estonian-slopestyle-open-2014.html. So no ticket revenue here.

  2. So unless you live in Tallinn or Tartu you really shouldn´t want a theme park to take your kids to? I really think this article is a bit too one sided. Not everyone lives in Tallinn or Tartu, I am really happy to have a theme park near me and not fussed by the taxpayers money being used (I too pay taxes, btw). I belive Lottemaa will have lots of interest form latvians and other Lotte fans.

  3. City people... and then you tell that we have a problem having too much people in big cities. Have you searched how many tourists are in Pärnu region during the summer period (I mean active tourists, not those who come with cruise ship, look 3 old houses buy some souvenirs and go back a few hours later?) ? Recent count was indicating that there were nearly 50 000 people on Pärnu beach in one moment (the population of the town is just over 40 000. Additionally, have you counted how much does it costs to run rollercoaster or watertubes or any other amusement park attraction? and how much it costs to run Lotemaa? and most of the money does not go to electricity bill but to real people. Do we need that our chidlren want only jump, bang, crash.. etc. Or we want them to be more creative?

    Next time you write an article, please prepare yourself and consider all sides. Lazy people critisize, normal people do things. Your bad preparation was also visible when saying that Halinga town was supporting Lottemaa. There is no such town in Pärnu county.

    Do us a favor, do not post your crap text in internet. Everybody has right to write and talk, but consider before posting it.

    Well, I am happy to give my 10 euros of tax money to build that park.

    Person from Tallinn

    1. Is this the best way to spend 6 million euros? The roads are in bad shape, and a lot of children can't even get a place in preschool.

      Why does the government need to waste money on this? How about the kids go to the other theme parks in Estonia, and the government pays the teachers better instead?

    2. It's nice of you to bring out factual errors in the post. It's also well within your rights to criticize the author's writing style or taste in humour, but the numbers really do speak for themselves. I think we can all agree the park will very likely never become profitable, cost way too much to be built, stifles competition and shows entrepreneurs the sweat of your brow matters little compared to the titles of your friends.
      It's amply clear the government will give anyone a healthy lump of cash who knows how to ask while instead, it should only be there to enable entrepreneurs to get their foot in the door for something that'll pay off in decades, maybe in other value than money. Or to help start something that is just damn difficult to start alone. So to speak, instead of giving people a stick and some fishing line to make a rod in a place without trees, they'll just throw a grilled and garnished fish at you every few years. (or however long it takes to write a project and get it funded)
      I totally agree it's good that some of the money goes to "real people" - actors, workers, local business owners, but I wouldn't be as naive to think they get a sizeable piece of the pie. There are better ways to help "real people". Also, you can always go throw your 10 euros in a hat on Kickstarter or just donate it to someone in need should you feel too rich. Think about all the projects you're supporting with "your 10 euros of tax money", it's not about one project being to your liking, it's about our business environment enabling such spending on 99 projects only the recipients of the funds find good and necessary. It's about knowingly creating a project-based economy us collectively saying taking the easy way out is OK.

    3. "Your bad preparation was also visible when saying that Halinga town was supporting Lottemaa. There is no such town in Pärnu county."


  4. "In a tiny village nearly 2 hours' drive from Tallinn."

    A lie by omission.

  5. Real numbers are 4,4m EAS and 2,6 private. Looks like good investment for both. Prepare better next time.

  6. Seems Estonians have lost their entrepreneur spirit.

    These government handouts are BAD for business and should only be done when there are other overriding more important concerns. Maybe pushing Lotte internationally to replace Mickey Mouse could be one of them but then making a competitor to local private theme-parks? What?

    This case is taken to extreme in Estonian agriculture which depends on various government handouts. If you are about to invest 100k into some small agricultural food production (as I am) you just cannot do it. Because your competitor just did the same plus another 300k from PRIA, plus another 100k from EAS ... . You are just wasting your money. This is ridiculous and makes business IMPOSSIBLE without friends in high places in these government structures.

  7. comparing rollecoasters to lotte's inventionland is just plain stupid

  8. Pärnu had an amusement park near Pärnu beach. It was unprofitable and was sold for old scrap some years ago. Ok, it was old - I have to give you that.

    I live in Pärnu & have 2 kids. The ticket price is a bit outrageous for me - going to there would cost me more than 100€ per trip. Me, my wife + 2 kids - tickets would account for 66€ and add gasoline + drinks and food (icecream, snacks, whatever).
    As i live in Pärnu it is a lot cheaper and more fun to go to Pärnu beach. Kids can swim, build sandcastles and play in the water for 0€. Also me and my wife have something to do besides watching kids talk to costume characters in an abandoned military base.

    Also building wooden houses for fantasy characters isn't that expensive - for example go to http://www.palmako.com/ and buy such wooden huts for 2-4k. You can buy a shitload of them for 4 million euros :-D

    So telling me that Lottemaa is going to be profitable in the long run - I honestly don't believe it. I have seen similar "Big" ambitious projects done before, with taxpayers and EU money. The end result is unrealistic shit that will be forgotten in 4-5 years, because there is a magical belief from parties involved and unrealistic predictions in terms of real visiting & paying customers.

    my 5 cents :-D

  9. I am interested in ways to make those companies and organisations accountable for their strange and often suspucious activities. All information is pretty much public, but no one really cares/doesn't want to deal with it/ has no time, etc...

    Is there any institution here in Estonia that is supposed to do this?

  10. First Estonians put fingers up their arses, now it's their heads also. Thanxx for great writing once again. This country's going down the toilet - and not any single Estonian gives a fuck about it.