FOR IMMEDIATE RELEASE: April 11, 2013
Contact: Tom Staudter | ThomasS@westchesterlegislators.com | 914-995-2819 (office) | 914-815-4462 (cell)
Astorino’s “Asset Management Agreement”
With Sustainable Playland Held Over as Questions Abound
White Plains, NY – The resolution for the so-called “asset management agreement” proposed by County Executive Astorino that will cede control of Playland, Westchester’s 280-acre amusement park and recreation facility, to a not-for-profit entity called Sustainable Playland, Inc. (SPI) was held over by Westchester County Board of Legislators (BOL) Chairman Ken Jenkins (D-Yonkers) at today’s meeting of the County’s Board of Acquisition and Contract (A&C), as questions abound regarding the financial viability of the agreement.
Ever since Astorino chose SPI as the organization in October 2012 to run and “re-invent” Playland, the BOL Government Operations Committee, chaired by legislator Catherine Borgia (D-Ossining), has been carefully scrutinizing the proposals of the top four respondents, as indicated by the Administration. A financial audit of the four proposals initiated by the BOL is due any day now.
The BOL’s vetting of the proposals has generated a number of important questions about Astorino’s choice of SPI, and whether the not-for-profit organization will deliver the best financial deal for Westchester taxpayers, who will be on the hook for any County incurred costs at Playland not covered by the agreement.
Today, BOL Chairman Jenkins entered into the record of the A&C meeting several of these questions:
Question: Please explain why attendance is the factor being delineated for “greater county subsidies” when in fact the data as presented in the Adopted 2013 Budget book reflects a decrease in County subsidies.
The resolution authorizing Westchester to enter into a management agreement with Sustainable Playland, Inc. states that a downturn in attendance which has “translated directly into greater county subsidies going to support the budget to operate Playland.” While service indicators from 2009 to the present reflect a reduction in attendance, the net cost to operate Playland has not increased. Actual net costs in 2009 were $4,846,514, and actual costs in 2011 were $3,325,430. The 2013 Adopted Budget reflects a net cost to the County of $2,166,041(see page C504). Therefore based on the data presented in the Adopted Operating Budget of the County, the cost to the county tax payer to operate Playland has DECREASED.
Question: What is the rationale for the assumption utilized to calculate a $2,750,000 receipt of over a 10-YEAR PERIOD, when the resolution delineates the time frame to be “on the earlier of May 1, 2014 or the date each zone commences business operations and generates the first dollar of revenue from the activities and programs occurring in such Park zone after such Park zone opens to the public”?
The resolution states, “SPI has agreed to pay $3,250,000 to the County as follows: $500,000 on the Commencement due Date and the balance paid in installments of $500,000 for the Great Lawn Zone and $750,000 each for the Amusement Zone, Beach Zone and Field Zone on the earlier of May 1, 2014 or the date each zone commences business operations and generates the first dollar of revenue from the activities and programs occurring in such Park zone after such Park zone opens to the public. Yet the “budget box” included in the resolution reflects $500,000 to be received in 2013 and the balance of $2,750,000 to be received in the period 2014 to 2023.
Question: Since the revenue to be received by the County is predicated on the net operating income of SPI, how has the County determined the value of the revenue?
The resolution states, “Additionally, net operating income will be distributed as follows: a.) to the County 50% or more up to and including 100% of the net operating income after the payment of all operating expenses and capital expenses as approved in SPI’s Operating and Capital Budgets; b.) 25% to the SPI’s capital reserve fund until the amount therein equals $10,000,000; and c.) 25% to the SPI’s operating reserve until the amount therein equals $5,000,000.”
Question: According to County Executive Astorino, the agreement with SPI is designed to “stop the financial bleeding.” If that is the case, how is the remaining $2 million in annual debt service being paid for?
County Executive Astorino recently stated: “SPI will pay the county a base fee that could eventually total $4 million, provided all zones become operational as planned. SPI will also make annual payments to the County based on the park’s net operating revenue. SPI estimates this to be about $1.2 million per year once the park is fully developed. All of the SPI payments will go toward retiring the County’s existing debt for Playland of approximately $35 million.”
But the existing debt for Playland (including the Ice Casino) is in excess of $3.2 million in 2013 (per adopted 2013 budget book). Revenues of about $1.2 million per year “once the park is fully developed” will still leave approximately $2 million in debt for County taxpayers to shoulder.
Question: How will the County offset the approximately $4.4 million of interdepartmental costs which are now allocated to Playland and offset by revenues in the applicable County departments providing the services?
Added to the $2 million burden of continuing debt not presently met by SPI’s payments to the County, Playland also carries “interdepartmental costs” which equate to approximately $4.4 million in the 2013 adopted budget.
Question: What happened to the upfront payment of $4 million?
In his original announcement and press release on October 31, 2012, County Executive Astorino outlined an upfront payment of $4 million from Sustainable Playland, as well as a minimum payment of $1.2 million a year.
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