Six Flags wants out of New Orleans, offers the city a deal
Posted Saturday, July 1, 2006 11:39 AM | Contributed by Jason Hammond
The company that owns Six Flags New Orleans does not want to re-open the flood-ravaged eastern New Orleans theme park, and has sent a proposal to the city that would allow the amusement company to walk away from its 75-year lease, according to documents. Six Flags Inc. has offered to pay the city $10 million to cover rent to the city, give the city 66 acres of land the company owns adjacent to the park, and give the city 20 percent of its insurance proceeds above $75 million. The amusement parkhas been closed since Hurricane Katrina.
They were waiting for some insurance figures to trickle in. Sounds like they haven't gotten any reimbursement yet, though it's obvious that the coverage wouldn't be enough to rebuild back to how the park was before the flood. SFNO was never a profitable property, and now there's hardly anyone around to visit let alone work there. Rebuilding is just a money pit.
Ray Nagin is right to hold Six Flags to their deal, his city is bankrupt and needs everything it can get. Gary Story and Kieran Burke where foolish enough to ink a 75 year contract, so Six Flags is going to have to pay dearly just to walk away from this mess. I'm speculating SF is going to need to throw in another $10m on top of that.
I am reading that correctly? That SF will receive 75 million in insurance proceeds? Sounds to me like they are going to come out ahead on this deal. The odds of SFNO ever pulling in 75 million in a single year are non-existent, or even over a decade. The original lease deal was a good idea, lock in a low lease payment over a long term. Similar to some of their other properties, like SFMW, where they lease and it's to the chain's advantage. Katrina shattered those plans pretty quickly, and it's evident that it could easily happned again given the location of Jazzland, so to keep the property would be high risk.
If Six Flags were able to recoup $75m+, but in actuality they only had $27m in flood coverage. So in the unlikely event the insurance companies really pay out, Six Flags is willing to share - but I dont think they are really expecting to recoup that much.
Precisely. Which is why I moved to Orlando as I had already seen the handwriting on the wall immediately after the storm that the odds of being able to continue living in NO and still have a "home park" were slim and none.
Actually , I don't have a problem with SF leaving the New Orleans Market. BUT I have a problem with several other items.
1. The Zephyrland waterpark fiasco in which SF purposely killed because they did not want any competition.yet they , I honestly believe had no intention of building a waterpark themselves.
2. Poor management of the park and poor ride conditions at the park which made the park undesirable, It wasn't that the city did not embrace it , It was the way the park was Run, Nasty and with rude employes to boot. Poor ride maintenance and just a flat out I could care less what the paying customer thinks day to day attitude.
3. Removal of rides to replace them with greenspace, That was a complete line of BS, Quoting patrons that they wanted less rides and more greenspace.
4. Posting on their website that they want to help the City of New Orleans recoup after the Katrina Devastation.. Total BS
5. If they want out thats fine, then leave , but leave the insurance monies that may be rewarded, to be used for what they were meant to be used for..as for as the 20% over 75 mill.. that won't happen because they won't get that much back so the 20% is a mute point. They forged a low fee long term lease and they did that for a reason, Make them pay the remainder of the loan that is due and leave with NO rides.. I believe they will try to recoup the Batman ride and the Jester ride which were some of the latest additions and probably in the best of shape due to their height. I wouldn't let them make a penny off of these rides.. Leave them alone and if need be let them rot in place. I can see it now come ride the newly refurbished Batman the ride that survived the Katrina Storm at SFGM.
They purposely caused the local patrons in the surrounding areas to do with out . For that attitude which the park chain is guilty, I say pay through the nose. Hopefully our Mayor has the forsight to hold them to the fire, and He will because I don't believe he wants to be known as the Mayor that left the city oweing a $20 mill loan to HUD
^SFGRAM already has a B:TR,it was the protoype so why would they need another one?The park was so badly damaged,as was the rest of the city that there is simply no need to even try to salvage anything out of it let alone try to repair it.
Most of the rides have also been partially or entirely submerged underwater for almost a year now which permanently damages the electrical/mechanical systems & would probably cost more than they're worth to repair.
My hunch is the city will let SF out of the contract only if SF pays off ALL of that $20m HUD loan. This offer of 20% of anything over $75m from insurance is just smoke and mirrors, SF ain't gonna get that much.
Indeed, it sucks for the south region to lose quite a few parks in such a quick span. Pretty amazing that a small fry park like Dixie Landin is now the biggest player for 300 miles.
It was a typo. What I meant for clarification purposes is that they will want to remove the latest additions at the park that were in some part salvagable and move them to other parks not just SFGAm and make money with a comment below them saying they survived the Katrina storm, come ride !! They will probably call it "Bandit" For going in and stealing it from the city.. Shame on SF for taking advantage of a city that is almost broke, trying to just get a grip on day to day events and you are trying to leave it with a loan note. When will they get that BS comment off of the Website and change it to something more realistic, Like get ready for the Banana. The real point is that SF hasn't been to the park but for a short time and only to clean it up for inspection and nothing as for as preventative was done since the park closed. That told the locals that SF had made this decision earlier in the year and did not want to include it in the conference call just recently released. I guess that what is called 'Business".. I can just hope our Mayor who is a former Businessman has the savvey to show them "Who's the Man".
I think before it's all over you will see Six Flags file for chapter 11 bankruptcy protection, which will allow them to reorganize, sell off some assets and possibly allow them to get out of the New Orleans deal or at least allow them to make some sort of better payment plan with HUD.