From The Times-Picayune:
Nickelodeon ends licensing agreement with Southern Star
Not quite three months after announcing the alliance, cable television giant Nickelodeon said Monday that it has ended its relationship with Southern Star Amusement, the fledgling Louisiana company it had partnered with in August to redevelop the abandoned Six Flags amusement park in eastern New Orleans.
“Nickelodeon has ended its licensing arrangement with Southern Star Amusement for the proposed outdoor theme park in New Orleans due to Southern Star’s failure to meet important contractual requirements and deadlines,” Nickelodeon said in a statement.
Joana Roses, a spokeswoman for Nickelodeon, would not elaborate on the decision.
Southern Star Amusement Founder and President Danny Rogers said Nickelodeon had imposed an unrealistic time line on the company for raising money to fund the project given the dour economic climate and the fact that Six Flags, the park’s previous operator, is still winding its way through bankruptcy court, something he believes has been a complication in convincing potential investors to open their wallets.
“Investors are not going to invest until they see a clear ownership of the land,” Rogers said. “These projects are hard to do, I don’t care who you are. In today’s economy, it’s difficult.”
Southern Star planned to spend more than $150 million redeveloping the park, which did not reopen after Hurricane Katrina. In addition to renovating existing rides, the company’s plan called for adding new rides and several water-based attractions.
Nickelodeon, a division of the media giant Viacom, had agreed in August to lend its name, marketing strength and cache to the park through a licensing agreement with Southern Star. The company had not planned to make any financial commitments to the park.
The plan had received the blessing of the Industrial Development Board and was enthusiastically supported by Mayor Ray Nagin.
But the project appeared to be in trouble late last month when Southern Star asked the State Bond Commission to withdraw its request for $100 million in Hurricane Katrina business development bonds after the company failed to post $500,000 with the state treasury the day before the commission’s meeting. Under commission rules, an applicant for a Gulf Opportunity Zone bond must post .5 percent of the amount of the GO Zone bonds sought to “show good faith, ” commission Director Whit Kling said in October.
Nagin became “extremely concerned” about the future of the project after the bond commission meeting, his spokeswoman Ceeon Quiett said.
The city subsequently asked the company for a list of their investors and for financial statements, none of which was produced, Quiett said.
But Rogers said it’s the city that has not acted in good faith. Southern Star needs a “memorandum of understanding” from the city that it intends to lease the property to the theme park operator so that it can properly market to potential bond buyers.
“If you don’t give us what we need how can you possibly expect us to come up with those kinds of numbers,” Rogers said. “This is like what comes first the chick or the egg.”
Last month, The Delaware court presiding over the bankruptcy of Six Flags Inc. agreed to allow the theme park operator to terminate its lease with the city of New Orleans for the eastern New Orleans theme park.
Rogers said he had also grown uncomfortable with the size of the project after Nickelodeon was brought aboard.
“We were having a lot of concerns with what they were going to do because the debt was getting much higher than we were comfortable with,” Rogers said.
Southern Star plans to move forward with its plan for the park, perhaps appearing before the bond commission later this year.
“Nickelodeon, it would have been nice to have them aboard, but at the same time the project stands on its own merits,” Rogers said. “If they want to leave, God bless them. They never put a penny into it in the first place. We’re pretty much the last shot. If we don’t do it, no one will.”
Nickelodeon’s prepared statement, however, suggests that it is open to lending its name to another company were one to express interest in developing the project.
“Nickelodeon still believes that New Orleans is a viable location for a licensed Nickelodeon-themed destination, and we remain open to exploring options for moving this project forward,” the statement said.
Jaquetta White can be reached at [email protected] or 504.826.3494.
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