By Dan Murphy
As Westchester County residents continue to get through the final weeks of winter (with very little snow) a story about Playland, the county-owned amusement park in Rye might warm our readers’ hearts.
But while the thought of a visit to Playland, the beach and the boardwalk might warm our hearts, the fact that Westchester County, and in return, the taxpayers of Westchester, have paid $2.5 million in legal fees to fight a lawsuit with Standard Amusements over who has legal control to manage and operate the amusement park is not good news.
And the $2.5 million is only a preliminary number because the two parties appear far apart and not close to settling the case, and the case is only in the discovery phase, with depositions, and an eventual trial date, resulting in millions in additional legal fees.
The lawsuit stems from an agreement reached back in 2015, between Westchester County government and former County Executive Rob Astorino and Standard Amusements, which gave Standard the keys to Playland, to manage and operate the park for 30 years. While an agreement was reached, Standard never actually operated or managed the park, which was supposed to happen last year.
Standard was required to make investments to the park in preparation for its takeover in 2019, but with the election of George Latimer in 2017, disagreements between the county, and whether Standard was living up to its investments in the park, it resulted in Latimer terminating the contact based on a clause in the contract that required Standard to invest millions in Playland.
Just before the contract was terminated last year, Standard filed for bankruptcy, but is claiming that the bankruptcy is based on the fact that Westchester County terminated the Playland contract.
The agreement reached by Standard and Astorino required Standard to invest $27.5 million and Westchester County to invest $30 million in Playland. Other terms of the agreement gave Standard the right to take a majority of the profits before sharing them with Westchester County.
Many experts, and former employees at Playland, claimed that the agreement was “a sweetheart deal” for Standard Amusements and required Westchester and its taxpayers to pay millions in capital improvement but have no control over the park or reap any profits.
County Executive Latimer argued that position, that the Standard-Playland deal was a bad one for Westchester taxpayers, but the contract was terminated because Standard didn’t live to their end of the bargain.
Standard has argued that the Latimer administration wanted out of the deal and has concocted a breach to get out. The bad blood between both sides continued when Standard accused Playland and Westchester of operating the park with unsafe conditions and health concerns over the food served.
The county has said the relationship with Standard is beyond repair. The City of Rye has also filed suit in the years since Standard was awarded the contract. That suit was dismissed on appeal last year.
Another dispute arose when Standard Amusements replaced its CEO Jack Falfas, who was the only employee and member of Standard with amusement park experience, without notifying the county.
“Far from being a qualified and reliable private steward for this important public asset, Standard has repeatedly engaged in underhanded, deceitful conduct that has fundamentally undermined the county’s ability to receive the fruits of the agreement,” wrote attorneys from the Law Firm of Paul, Weiss, who are representing Westchester County.
Latimer has clashed publicly with former Journal News reporter Phil Reisman, who now hosts a radio show on WVOX 1460 AM. Latimer recently called into the show, when the topic turned to Playland.
“If the county loses the lawsuit, a private company runs Playland for the next 30 years,” said Latimer. “There’s no metrics that will be identified as to whether they’ve succeeded and there’s no way for the county to claw it back after five years or 10 years, and those are also factors that can be mentioned.”
Latimer’s argument is a valid one, although it is now becoming an expensive one with legal fees. Why give Standard Amusements the right to operate and manage Playland if they are now bankrupt, with no employees with amusement park experience, and they have not invested the required millions into the much-needed capital projects.
Westchester continues to question whether Standard has access to the money it said it did to fund its improvements and live up to its end of the contract. The company was audited by Westchester as their relationship soured and the county has contended it need more information about the nature of the investments and identity of investors.
Standard denies the allegations. “Standard Amusements has always been transparent and truthful about its financial backing,” said Standard Amusements and its founder Nick Singer, who grew up in Westchester and said he wanted to restore the park to its former greatness. “At the end of 2016, Standard had an opportunity to refinance its capital commitment and did so with the full knowledge and consent of Westchester County.”
But the firing of Falfas, and the disagreement between Falfas and Singer over his compensation, further muddies the waters of who will actually operate the park for Standard if they were ever given control. Falfas testified that he had to sue to receive his compensation, and was eventually paid $400,000, which Standard identified as dollars it had invested in the park.
Westchester County’s attorneys claim: “The county and Standard met several times to discuss potential resolutions of the disputes, but no agreement was reached. Standard became increasingly belligerent and unprofessional in its actions toward the county.”
As the legal battle continues, the only issue in question are the legal fees for the county and its taxpayers. And what happens if Westchester loses the lawsuit, and is on the hook for damages against Standard Amusements? Do the millions in legal fees eventually become tens of millions in legal fees and damages?
