After years in the red, Jungle Island makes new promises
In an effort to make itself profitable, the struggling Jungle Island attraction is asking the city of Miami for more land. Commissioners are questioning the park’s ability to deliver after 15 years of what the mayor calls 'broken promises.'
07/05/2012 5:00 AM
09/08/2014 5:57 PM
When the owners of the aviary attraction known as Parrot Jungle made a bid for prime, city-owned land on Watson Island, they came to the Miami City Commission with a list of promises:
Three-quarters of a million annual visitors. At least $400,000 in annual revenue for Miami’s coffers. Six hundred new jobs.
Fifteen years later, the only promise kept was the number of new jobs.
Jungle Island, as the attraction is now called, hasn’t paid rent to Miami in three years. Instead, it has sucked public money from Miami and Miami-Dade County, which have floated the park more than $26 million to cover rent, back taxes and payments on a loan from the U.S. Department of Housing and Urban Development.
Now, with Jungle Island threatening to default on the 20-year federal loan — on which there’s still $15 million to pay — the park wants the city to double down.
Jungle Island officials say an unnamed investor has offered to build a hotel, restaurants and shops on Watson Island — but only if the city extends the park’s lease for an additional 50 years and gives it 13 more acres of waterfront land on Biscayne Bay. This time, they say, the project is sure to make money for the city.
“Unfortunately, this is a story of broken promises,” Mayor Tomás Regalado said.
The City Commission was supposed to take up Jungle Island’s request last week, but deferred the discussion to allow for more negotiations.
There is pressure to move swiftly: A $2 million payment on the federal loan is due in August. Park owner Bern Levine says Jungle Island can’t make the payment, leaving Miami and Miami-Dade County to make the payment once again, as they have for years as guarantors of the loan.
City administrators have made their position clear: “I want the entire $2 million paid [by Jungle Island], no strings attached,” City Manager Johnny Martinez said.
There has been another roadblock. Jungle Island has asked the city and the county to forgive its entire $26 million debt in exchange for a share of the park’s profits moving forward.
City officials are willing to consider the proposal, but only if they receive a portion of the attraction’s revenues instead.
Commission Chairman Francis Suarez said he is leery of “compounding one bad deal with another.” But he sees the potential of an expanded Jungle Island and a proposed revenue-sharing arrangement with the city.
“In the past, the city has been giving,” Suarez said. “In this case, the city will be getting.”
Commissioner Willy Gort said he is skeptical.
“I have to be convinced that their plan can actually be accomplished,” he said.
Regalado, who sat on the City Commission when many of the previous Jungle Island deals were brokered, says it’s all déjà vu.
Fifteen years ago, Levine told the city that Jungle Island would attract 750,000 annual visitors after its move from Pinecrest to 18 acres on Watson Island. He envisioned tourists streaming in from the nearby Port of Miami and Miami-Dade’s landlocked southwestern suburbs.
Attendance the first year was closer to 450,000. For a range of reasons, through economic booms and busts, the number has remained constant to this day.
At first, the park followed through with annual rent payments to the city. But it struggled to pay down the federal $25 million loan it took out to finance its move to Watson Island. Miami has so far covered about $13 million in principal and interest, city records show.
Jungle Island’s financial situation only grew more dire. In 2009, the City Commission voted to lend the park $800,000 to cover unpaid property taxes — a move intended to stave off default on the federal loan. Commissioners also deferred the park’s yearly $400,000 lease payments through 2013.
Jungle Island officials point out that Levine and his business partner, Ron Krongold, have invested more than $21 million of their own money in the struggling attraction. They also took out a $10 million loan from a private bank, which they later refinanced.
“They have stood behind the project, the employees and the operation,” said park lobbyist Brian May, who spoke for Levine. “Now, they are coming to the table with a plan that won’t cost the public any money.”
The park’s finances have been the subject of intense scrutiny.
Jungle Island has had to submit annual audited financial statements to the City Commission. The statements show consistent losses for the past five years, according to a Miami Herald review of the documents.
Of late, park officials have seen “modest increases” in overall revenues, May said. Still, he said, a dramatic overhaul of the business plan is needed.
“The challenge is that under the current economic model . . . [Jungle Island] is unable to meet its loan obligations without additional investment,” May said. “This requires a much more comprehensive long-term plan.”
At least three commissioners have said that they want to know the name of the secret investor. Levine has said he won’t identify the investor, and some city officials have privately speculated that no such investor exists.
Suarez has raised additional questions over Levine’s other businesses, and how they fit into the Jungle Island enterprise.
“We need to see if the subsidiaries are making money on the park,” he said.
City Manager Martinez said he has asked city auditors to look into the other businesses. The auditors confirmed they are combing through records relating to Jungle Island’s finances, but would not elaborate on the details of the examination.
May said he does not believe the other businesses relate to Jungle Island.
Representatives for the park and the city are continuing negotiations. But changes to the lease, from additional years to giving the park more land, would have to be approved by voters in a referendum — and the deadline to get an item on the November ballot is fast approaching.
If the two sides can’t reach a deal — and Jungle Island can’t make the August loan payment — the city could try to foreclose on the property. City officials could also find a new operator, or start over with an entirely new project.
Regardless, Commission Vice Chairman Marc Sarnoff says Miami needs to find a way to regain control over the property. And that may or may not include Jungle Island.
“It’s very hard to trust people who have never been able to follow through,” he said.
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