The Westchester County Board of Legislators last week approved a bankruptcy court settlement with Standard Amusements regarding the management of Playland Amusement Park in Rye.
The settlement, which the board approved 13-4, was negotiated by the county and Standard – the terms of which were previously approved by the bankruptcy court.
The agreement gives the county significantly improved terms compared with the 2016 agreement, which had become the subject of a dispute in Standard’s bankruptcy reorganization filing.
The choice legislators faced was voting to approve the settlement, with its improved terms, or against the settlement, thereby sending the case back to bankruptcy court where Standard could move to assume the 2016 contract.
Under the settlement, Standard will invest millions more in rides and food and other improvements at Playland than under the 2016 agreement.
The settlement also gives the county significant new oversight over Standard’s operation of the park — controls that were not in the 2016 agreement. These new oversight powers include the power to review and approve Standard’s construction plans, approval of new rides, new and more specific financial reporting requirements for Standard, and county approval of an annual operating plan for the park, among others.
In addition, the settlement contains new terms under which Standard can assign the contract to another company. The county will now have the ability to object to an assignment, and there are new requirements that any company that might take on the contract must have years of amusement park management experience and demonstrated financial resources.
There are also improved financial terms for the county. Under the 2016 agreement, the county shared only in Standard’s net profit and only after Standard recouped its capital investment. Under the settlement, the county will be paid from the beginning out of gross revenue over $12 million. The county also will receive an annual fee starting at $300,000 in 2022, increasing to $400,000 in 2023 with annual adjustments thereafter.
If Standard fails to generate at least $12 million in gross revenue per year for four straight years, the county may terminate the contract.
The settlement also heads off expensive litigation in the future by hiring a commercial arbitrator, to be agreed to and paid for by both parties, to resolve disputes.
Any county workers at Playland, not hired by Standard, or who do not want to work for Standard, will continue to be employed elsewhere by the Parks Department. Standard is committing to continuing to hire a diverse slate of young seasonal workers during the summer as well as older workers.