WPCNR COUNTY CLARION-LEDGER. SPECIAL TO WPCNR FROM County Legislator Benjamin Boykin, District 5, May 3, 2016:
On Monday, May 2, 2016, the Board of Legislators approved a revised agreement (“agreement”) between Westchester County (“the County”) and Standard Amusements, LLC. (“Standard”) by a vote of 13 to 4. In addition, the Board of Legislators approved spending $33.208 million in capital investments for Playland. I voted to approve the agreement and the capital spending.
Working with my Democratic colleagues, I restructured the agreement to save taxpayers millions of dollars by ensuring that Standard does not double count their management investment. I also had provisions included in the agreement to clarify that rides added to Playland by Standard could not be removed. These changes will permit the County to begin to share in net profits sooner and will reduce the financial impact on our taxpayers.
The key points of the agreement include:
- Standard will manage Playland for a term of 30 years
- Standard will make payments to the County of $2.25 million by June 15, 2016 of which $500,000 is non-refundable and $1.5 million will be placed in a special reserve account by the County, of which a portion may revert to Standard if certain conditions are not met
- Standard will invest $5.0 million in Playland prior to June 1, 2017
- Standard will make a management investment of at least $27.75 million and up to $32.75 million within five years
- Standard will continue to make additional capital investments in Playland over the 30 year term
- The County will make capital investments of at least $33.208 million, which were approved on May 2
- Standard will continue to co-manage Playland with the County and will take over full management in either 2017 or 2018 depending upon when the County has made at least 50% of its required capital investments which were approved by the Board on May 2
- Standard will pay the County an annual Management Fee of $300,000 which will increase by at least 2% per year
- In addition to the annual Management Fee, the County will share in net profits (after Standard has recouped its management investment) starting at 8% and growing to 12% over the term of the agreement
- Standard will pay the County rent for various booths and other items at Playland
When Standard takes over full management of Playland, the County will be reimbursed for 100% of salaries and overtime costs plus 30% of salaries for fringe benefits for County employees that will continue to work at Playland for Standard. After two years, Standard will reimburse the County for 100% of County employees’ costs for salaries and overtime and 100% of fringe benefits. County employees who will no longer work at Playland will be provided other jobs within the County at the same pay, pay grade and benefits. In addition, Standard will reimburse the County for police and park ranger services.
Playland will continue to provide summer employment opportunities for many youth in Westchester.
The Board of Legislators will decide to either replace or close the Playland pool by July 31, 2016. Standard will manage this area once the County has made its decision.
While not perfect, this agreement and Board approved capital spending will result in much needed investment in Playland by the County and Standard of at least $61 million. Taxpayers will not have to pay directly for $27.75 million of management investment that will be put up by Standard. Instead, the operating cash flow from Playland will be used by Standard to recoup this investment.
The $33.208 million capital investment by the County will cost the taxpayers approximately $2.6 million per year in principal and interest payments on the new debt to finance the County’s capital expenditures. These are needed capital investments in Playland that have been deferred by the County and would have been required regardless of an agreement. This $2.6 million will be partially offset by payments from Standard to the County for the annual Management Fee and net profits share.
Under this public/private deal, the County will continue to own Playland and will have considerable leverage over Standard. Playland will receive new rides and upgrades to the Park’s infrastructure, resulting in an updated and revitalized park for Westchester. Over time, the County will reap financial benefits and at the end of the term of the agreement, the County will continue to own Playland. Our historical Playland will be revitalized for us and future generations to enjoy.
Playland is opening on May 7 for the 2016 season. I am working to improve the customer experience for everyone with this agreement between Standard and the County. While neither party got all that they wanted, I believe that we negotiated a better situation for our taxpayers while enhancing this historical jewel.