Report calls for re-evaluation of Playland agreement with Standard Amusements

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Westchester County Executive George Latimer said the county will invest millions of dollars and get little in return under the terms of a contract negotiated by former County Executive Rob Astorino”™s administration to privatize management of the Playland amusement park in Rye.

Latimer”™s office released the findings of a new report on the park management deal to the media on May 7. At a news conference, Latimer criticized several provisions of the contract that Astorino signed with Standard Amusements LLC to operate the park.

Latimer said the deal was evidence the prior administration viewed the 30-year contract more as a way to get the amusement park off the county books, rather than improve Playland.

“I think it is fair to say that there are individuals serving in the last administration who have said publicly … they didn”™t believe that we should have an amusement park,” Latimer said. “I think the lack of commitment to looking at Playland as an asset is what undermines this overall arrangement. You will negotiate the deal very differently if you see this facility as I do, which is, this is the jewel of our park system.”

The deal between the county and Standard Amusements, a company backed by a Manhattan hedge fund, calls for the county to spend $33 million in capital investment, along with pool reconstruction costs of $9.5 million. Standard Amusements, meanwhile, is responsible for $27.5 million in investment, $14 million of which is earmarked for rides. The county is also required to make additional investments for the maintenance of the park.

The county”™s Board of Legislators approved the deal in May 2016.

After Latimer took office at the start of this year, the county board called on his administration to review the deal. The report was led by Latimer”™s Director of Operations Joan McDonald and County Attorney John Nonna. Among the complaints alleged in the investigation:

Standard Amusements still owes $1.25 million out of a $2.25 million upfront payment on the contract.
The Astorino administration allowed for five extensions on payments Standard Amusements owed to the county under the deal without prior approval from the Board of Legislators.
Neither the county nor Standard Amusements undertook a detailed assessment of the renovations needed to be done at Playland. The county estimates the park needs $125 million worth of renovations, which the report said could require the county to pay out between $65 million and $95 million beyond its initial commitments.
The county will not receive a share of the profits until Standard Amusements has fully recouped its initial payments of $2.25 million and capital investment of $27.5 million. By Standard Amusement”™s calculations, noted in the report, that means the county would not receive any profit share until at least 11 years after Standard Amusements takes over Playland management.
Standard Amusements is in default on a material term of the contract: that the company provide an experienced amusement park operator to lead the park. The person the company originally named, Jacob Falfas, has apparently left the company and has not been replaced.
The agreement with Standard Amusements covers 100 percent of the salary for the 30 county employees at the park, but only 30 percent of fringe benefits.

playland standard amusements — A worker uses a bulldozer to prepare the beach at Playland for opening in May. Photo by Bob Rozycki

At the news conference, McDonald expressed concern with another provision that requires Standard Amusements to make its capital investment only after the county has made half of its promised investment.

“When the private entity doesn”™t have skin in the game in the beginning, that”™s not a great thing,” McDonald said.

Nonna said there are three main legal issues the county must address regarding the deal. First, has Standard Amusements met its financial obligations to this point, and can the company meet all future obligations?

Second, if the contract is not beneficial to taxpayers, can it be renegotiated?

“And finally, if we can”™t renegotiate, can we terminate the agreement?” he said. “Is that more beneficial for the taxpayers? What is best for the taxpayers is our responsibility ”“ and that is the way we have to look at the legal issues.”

Latimer said the report was delivered to Standard Amusements and its attorneys. His office also plans to reach out to the company for a meeting.

Asked to respond to the report, Standard Amusements Partner Nicholas Singer provided a short statement by email through a spokesperson.

“We are pleased Westchester County has completed its review and look forward to engaging with the county to resolve any concerns as expeditiously as possible,” Singer said.