While this isn’t much to get excited about, it’s good to see that there’s at least activity surrounding the site’s that been sitting abandoned since it was severely damaged by Hurricane Katrina in 2005.
Be sure to check out Coaster101’s photos of Six Flags New Orleans in 2008.
From nola.com:
Southern Star President Danny Rogers described an ambitious timeline for the revival of the Six Flags park, saying he intends to begin construction in the fall and open the park ‘by the end of 2010’ But he offered only sketchy details about a project he said is still in the design phase. In a move that Mayor Ray Nagin said could provide much-needed momentum for the spotty recovery of eastern New Orleans, cable television giant Nickelodeon announced plans Tuesday to join hands with a fledgling Louisiana company to redevelop the abandoned Six Flags amusement park.
The deal, which calls for an initial investment of about $165 million, hinges on the ability of the alliance between Southern Star Amusement of Baton Rouge and Viacom, Nickelodeon’s parent corporation, to convince lenders to sink more than half that total into the project.
A few hours after Nagin unveiled the proposal at a morning news conference, the development team took its first step forward by winning the endorsement of the city’s Industrial Development Board to pursue up to $100 million in Go Zone Bond funding.
The plan — which Nagin said is not dependent on any local dollars — still needs the blessing of the State Bond Commission, which would allow the partnership to begin shopping for investors. The so-called GO Zone bond program was created by Congress to help entice new business to the storm-ravaged areas by allowing private investors to take advantage of low government interest rates.
The Six Flags site has been shuttered since it was swamped by Katrina’s floodwaters.
Assessing his prospects of lining up financing while the nation is still gripped by recession, Southern Star President Danny Rogers expressed cautious optimism. “It’s as solid as it can get at this point in these economic times, ” he said.
Asked why he thinks his project will fare better than an effort to restore the downtown Hyatt Hotel that’s been stalled by a failure to secure GO Zone investors, Rogers pointed to the strength of Nickelodeon’s famous kid brand.
“That’s a hotel,” he said, adding that his venture is affiliated with ” a worldwide recognized entertainment company.
“I don’t see any problem selling” the bonds, he said.
It is unclear how Tuesday’s announcement will affect talks with Big League Dreams, a California company, that is looking into transforming the Six Flags site into a multimillion-dollar, multi-stadium operation that would host everyone from little leaguers to adults who once dreamed of being professional athletes.
The proposal is being championed by City Council President Arnie Fielkow, who led a delegation of city and state officials to Texas recently to tour one of the company’s facilities.
In a written statement, Fielkow said the Nickelodeon project and his idea “are not mutually exclusive and could together present a very beneficial asset to our community.”
During his news conference, Nagin took a harder line, saying, “This site is the Nickelodeon theme park site. Let me be very clear and blunt about that.”
Nagin said the Big League Dreams proposal “is basically an unfunded dream.” If the sports complex cannot be funded at this time, he said, there are other areas of the city it can go later.
While the Industrial Development Board voted 8-2 to move Southern Star’s request forward, even supporters voiced doubts about the company’s ability to find bond buyers and raised questions about the firm’s financial acumen and managerial history.
Board member Farrell Chatelain Jr., who along with Susan Good voted against bond approval, seemed most skeptical.
“I think the message is good, ” Chatelain said of the plan to refurbish existing rides and reopen the park. “I don’t think the messenger is strong enough in financing to get it done.”
Board members also were unable to get firm answers on the financing plan.
While the bulk of the money to rebuild the park would come from the GO-Zone bonds, Southern Star board member David Crais said the company has had “many conversations” with investors who could contribute as much as $5 million to the project.
Crais declined to provide details of those talks.
The company also said it has an equity investment of $20 million to $30 million in the park, but it was unclear if that claim referred to the value that Southern Star has assigned to the rides currently on the site.
Rogers would not answer questions about the funding sources after the meeting. A man identifying himself as Rogers’ director of security said he was hurrying to another meeting.
Rogers qualifications were also called into question during the meeting. Southern Star, a start-up Baton Rouge company, recently opened an office in New Orleans. The Six Flags project would be its first.
Rogers, who said he has worked in the amusement park business since he was 10 years old, acknowledged that the New Orleans park would be the first that he has owned and operated.
Chatelain said that experience “doesn’t mean that you are capable of running a huge organization like that.”
Rogers responded that “Nickelodeon will oversee everything we do from start to stop.” However, Viacom officials have said they have no plans to operate the park.
It was the lack of a concrete financial plan and potential investors that drew the most doubt from the board.
“This is a project that everyone wants to see go forward, ” said board member Allison B. Randolph, III. “But we would like to feel comfortable that there are some financial commitments in place.”
Randolph said he had “grave concerns” about Southern Star’s ability to raise money. But, he eventually voted in favor of the bond allocation because it would give the company a better shot at finding potential investors.
Southern Star may ask for another $50 million GO-Zone bond allocation in the future, Crais said.
During the earlier news conference at City Hall, Rogers described an ambitious timeline, saying he intends to begin construction in the fall and open the park “by the end of 2010.” But he offered only sketchy details about a project he said is still in the design phase.
“It’s a work in progress, ” he said.
Howard Smith, Nickelodeon’s vice president for recreation, said while his network is involved in other entertainment venues, the proposed New Orleans project would be its first-ever outdoor theme park and its largest such venture.
Last year, the company opened Nickelodeon Universe in the Mall of America in Minneapolis, Minn. Nickelodeon also has built attractions in other regional parks, including Universal Studios in Orlando and Hollywood, Fla., and similar projects in Australia and Germany.
Smith said his 30-year-old network, which reaches 500 million homes worldwide, intends to use its marketing muscle to bring visitors to New Orleans. “We will marshal our resources to get them to come to the park, ” he said.
In addition to renovating existing rides, Rogers and Smith said their plan calls for adding new rides and several ‘water based” attractions. They did not elaborate on the types of rides or the size of the footprint for the park.
Under the terms of the agreement, Nagin said Nickelodeon will receive a licensing fee, while the city will retain a “leasing arrangement” with Southern Star. He did not elaborate.
Discussing the project’s potential economic impact, Nagin was effusive.
“This is huge, ” he said. “I don’t know what we could have done better. . .I don’t know if we could have found a better partner. Anyone who owns land in New Orleans east is probably sitting pretty good right now.”
Six Flags, which still holds the lease to the shuttered park, has filed for Chapter 11 bankruptcy protection. As a result, Nagin said any plan to move the Southern Star plan along would need approval from a judge.
Nagin said talks with Six Flags are ongoing. “They are supportive of us redeveloping the park, ” he said..
Nagin’s administration is attempting to refinance $15.2 million in outstanding federal loans that the city made years ago to spur construction of the amusement park. The city has been paying $1 million a year to supplement $1.4 million from Six Flags to make the $2.4 million annual payment that has been due on the loan.
Administration officials estimate that the refinancing could save the city $700,000 to $800,000 a year.
Frank Donze can be reached at [email protected] or 504.826.3328. Jaquetta White can be reached at [email protected] or 504.826.3494.
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