A hedge fund and Westchester County are testing one another over their commitments to invest up to $88 million to revive the troubled Playland amusement park in Rye.
The county proposes spending up to $58 million to renovate the park, in a recently revised proposal. Standard Amusements LLC of Manhattan proposes putting up $30 million to bring in new rides and attractions. If the county and company can”™t work out all the details by March 31, Standard may terminate the deal.
“This park needs an injection of capital,” Kevin Plunkett, deputy county executive, told the Board of Legislators parks committee on March 7. “The question is: Do we do it alone or do we do it with a partner to remake Playland?”
Playland is distinctive. It is the only government-run amusement park in the United States, according to Biederman Redevelopment Ventures in a report prepared for the county last year. It has rare, historic rides, Art Deco architecture, an ice rink that operates year-round, a swimming pool and beach, and a boardwalk with great views of Long Island Sound. It has been a beloved playground for generations of county residents since 1928.
The unique venue even attracted the attention of an ambitious real estate mogul who has since turned his attention to a greater opportunity. A few years ago Donald Trump discussed erecting a world-class roller coaster and staging episodes of “The Apprentice” game show there, Rob Astorino, the county executive, disclosed recently. Trump reportedly lost interest because the site lacked potential for residential development and because the county wanted to maintain control of the land.
Despite Playland”™s allure, the county has a big problem. Maintenance has been deferred, facilities are outdated and attendance has been falling, according to the Biederman report. It runs up millions of dollars a year in deficits.
Without private investment, Plunkett said, the county must either continue to pour money into infrastructure improvements by itself or it can allow the park to deteriorate and become even most costly to fix later.
The county wants Standard”™s commitment to bring in new rides and attractions quickly.
Standard wants the county”™s commitment to repair infrastructure quickly. It needs certainty, Plunkett said, that it can recover its investment and make a profit.
The county has plans to renovate the Music Tower Theater, the Colonnade and the administration building; fix bathrooms, food structures and the parking lot; and improve the shoreline.
The proposed deal has tight deadlines. Standard must spend at least $5 million by opening day 2017, and at least $3 million of that threshold must be on new rides and tangible improvements. The county must expend at least half of its construction budget by the end of 2017.
The deal is structured for 30 years. If each side honors its commitments, Standard will take over management and operations. The county will get an annual management fee, beginning at $300,000 and then adjusting yearly for inflation. When Standard starts turning a profit, the county will receive a share, beginning at 8Â percent and rising to 12Â percent by the 21st year.
Legislators on the parks committee urged Plunkett to tighten the contract language.
Lyndon Williams, District 13, worried that the term “net profits” was too vague and that the county “can get nothing” in profit sharing. David Gelfarb, District 6, wondered if Standard could run up management fees to its parent company, a hedge fund. Â Benjamin Boykin, District 5, said it appears that taxpayers shoulder all the risks. MaryJane Shimsky, District 12, said the county”™s deadlines seem too aggressive.
Plunkett said the county has built safeguards into the deal. Standard must submit an annual operating budget for county approval, and the county has the right to audit the budget and challenge the numbers. The deadlines are necessary, Plunkett said, to keep projects moving and assure Standard that Playland is worth a $30 million investment.
He noted that the county has flexibility to trim its budget. Renovations of the Tower and the Colonnade, for instance, could be taken off the construction schedule for now, saving $20 million.
Plunkett said he would continue negotiating with Standard for more precise language to protect the interests of the county.
“I think we can get there,” he said, by the March 31 deadline.
The aging park is scheduled to open for the 2016 season on Saturday, May 7.
