Six Flags lawsuit may halt New Orleans purchase
Southern Star Amusement, a somewhat unknown amusement investment company, may have to wait to purchase the long-shuttered Six Flags New Orleans park. The company placed a bid to buy the lease from Six Flags Inc. in 2007 after Six Flags attempted to buy its way out of the multi-year contract but has been unable to reach a deal since.
Now it seems that the purchase of the park could be further delayed due to the ongoing litigation between Six Flags Inc. and the city of New Orleans over the alleged abandonment of Six Flags New Orleans, says Mayor Ray Nagin's spokesperson Ceeon Quiett.
"There would be several conversations about some of the outstanding issues before anyone moves forward with this particular site," Quiett told New Orleans City Business. "There are some things they would have to consider assuming. We do have some outstanding issues and litigation going on."
However, Southern Star president Danny Rogers does not seem discouraged in his company's bid to purchase the property. "We believe the comfort level will be there for investors once more details come out about the project," said Rogers.
One of those "details" Rogers refers to could be media juggernaut Viacom's increasing interest in the Southern Star purchase of the property. Viacom has installed its Nickelodeon brand in various amusement properties in the past and may be looking to do the same once the park is under Southern Star management. This lends some credence to the recently-shot-down rumors of a Nickelodeon rebranding of the New Orleans park.
The Industrial Development Board, the nonprofit organization that authorizes funds for larger city projects, will consider a new proposal this Tuesday to allow Southern Star Amusement to reopen the park. [New Orleans City Business]
First of all, Six Flags is in bankruptcy, that puts an automatic stay on any lawsuit filed against it. So the mayor's office needs to own up on that one.
Second, who do the assets (the rides and attractions) belong to? If they are the property of the Six Flags' estate, then they are probably going to be sold as part of the restructure. Southern Star had better be ready to bid on those.
I would be extremely surprised if Viacom were to license anything to a one-off group that has no other property to mitigate risk. Look at the beating the Hard Rock brand took when a one-off was built just two years ago under their banner, only to end up in bankruptcy.
Excellent points, Ariel. It will be interesting to see the future of this property as it develops. I imagine not a whole lot will come of the Six Flags-New Orleans lawsuit and it seems only counterproductive to the city's want/need to get the park (any park) up-and-running again. Especially considering they're suing a company that seems to have little or no money to spare.
Viacom, however, is a giant company with tons of money to spend. I wouldn't be too very surprised to see them gamble on this property, if only to expand their brand's presence to a new market. Keep an eye on Lifthill for further news and let us know if you come across any interesting information.
Thanks!