Report Prompts Westchester to Revisit Rye Playland Deal

WHITE PLAINS—A critical report that points to significant increased capital costs to be borne by the county has caused Westchester County Executive George Latimer to explore either renegotiating or perhaps terminating its contract with Standard Amusements, LLC to operate Rye Playland.

Latimer released a report on Monday authored by Joan McDonald, director of operations, and County Attorney John Nonna that cited potential breaches of the contract by Standard Amusements and also significant increases in the future capital costs at Rye Playland. The Westchester County Board of Legislators overwhelmingly approved the 30-year contract with Standard Amusements to operate Rye Playland, negotiated under prior Westchester County Executive Robert Astorino, in May 2016.

Westchester County Executive Latimer plans to meet with Standard Amusements as well as hold discussions with the County Board of Legislators on how best to proceed. He said the results of the report “reopens the dialogue on the future of Playland.”

“We have a contract in place… whether or not we renegotiate the contract, whether we terminate the contract or were we to feel that we needed to accept the contract as is, those are the options that are before us,” Latimer told reporters at the press conference. “Those are options that the Board of Legislators and the Executive Branch will work together toward and the people of Westchester will have a say in as well.”

Standard Amusements partner Nicholas J. Singer released a short statement in response to the release of the county’s report, “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,” he said.

The report states that a Department of Public Works/Transportation and Parks Department review estimates the state of good repairs necessary at Playland to be $125 million. That estimate is far above the repairs called for in the Standard Amusement contract that require Standard Amusements to invest $27.5 million in capital projects (including $14 million for rides) and holds Westchester County to be responsible for $33 million in repairs, plus $9.54 million associated with the pool reconstruction.

The report estimates the county could be responsible for an additional $65 million to as high as $95 million in additional capital costs, depending on investments made by Standard Amusements. McDonald was critical of the capital costs studies that were undertaken in connection with the contract.

McDonald also noted that the county believes the attendance estimates in the contract with Standard are overestimated, noting that Playland has recently averaged approximately 500,000 visitors each year. Standard Amusements has projected that Playland’s attendance would double to 1 million by 2020. The report also notes that Standard assumes revenue growth of 33%, 35%, 24% and 9% in years one-four of operation, respectively. The county described those attendance and revenue projections in the report as “a very optimistic and likely unrealistic assumption” that it added are not backed up by any market survey data.

Based on a host of issues cited in the report, McDonald said the county is seeking a “fair deal.” Nonna added, “The legal issues are really driven by three overall issues, first, is Standard Amusements capable of meeting its obligations under this agreement and have they met them? Second, if the likely financial impact over the length of the 30-year agreement is not beneficial to the taxpayers can we renegotiate to make it more equitable and fair? And finally, if we can’t renegotiate, can we terminate the agreement?”

Some of the other contractual or financial issues cited by Latimer, McDonald, Nonna and the administration’s report include:

• Standard Amusements owing $1.25 million to the county in its initial payment obligations.

• The county could be responsible for between $1.5 million to $2.5 million in personnel and fringe benefits costs associated with Playland employees for up to 10 years.

• Revenue sharing would not begin until year 11 of the agreement and since payouts are based on a net revenue basis, the county’s profit sharing could be minimal.

Latimer was critical of five extension/contract modification agreements reached between Standard and Westchester County prior to the Latimer administration taking office. The last extension dated Dec. 20, 2017, the county charges reverses the order of investment obligations and now requires Westchester County to fulfill its 50% threshold obligation by Jan. 31, 2019. Previously, Standard was required to invest $3 million in new rides before the county reached its 50% threshold. Now, Standard is required to invest the $3 million 90 days after the county reaches the 50% threshold. The County Executive charged that these extensions/contract modifications were entered into without the approval of the County Board of Legislators.

Latimer stressed that Westchester County will be operating Rye Playland during the 2018 season and the park will open on schedule on May 12. The park first opened to the public on May 26, 1928.