Jungle Island, the perennially cash-strapped zoological park on Watson Island, is short the $2 million it needs for a federal loan payment due in August.
That’s troublesome news for Miami and Miami-Dade County, which are on the hook for up to $40 million should Jungle Island default on its federal debt obligation and other city and county loans.
Park owner Bern Levine says an outside investor is poised to help with the loan payments — but only if Miami extends the attraction’s lease for another 50 years and expands its footprint Watson Island. Levine says the arrangement is necessary to attract a hotelier, restaurants and retailers to the property and make it financially solvent.
Not so fast, says Miami Mayor Tomás Regalado.
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“What they’re asking is impossible,” Regalado said. “If they really want to continue their conversation with the city, they have to come up with the $2 million.”
His succinct analysis of the situation: “Like every deal in the city of Miami, it was a bad deal.”
The decision ultimately rests with the city commission, which will discuss the park’s future at a special meeting Tuesday. Commissioners are not expected to take immediate action.
In addition to extending the lease, Jungle Island wants Miami and Miami-Dade County to forgive about $26 million in debts in exchange for a profit-sharing arrangement.
Brian May, the park’s lobbyist, said with the looming likelihood of default, the larger proposal would save taxpayers money because the third-party investor would pay off the loan. May would not name the investor.
“What we’re offering is a plan to take the taxpayers off the hook going forward,” he said.
May added that Jungle Island’s plan would allow for the redevelopment of Watson Island and the addition of waterfront restaurants and shops.
Any changes would have to be approved in a public referendum in November.
Jungle Island has a long history in South Florida. The park first opened as Parrot Jungle in 1936 in what is now Pinecrest.
Nearly 60 years later, voters passed a referendum allowing the attraction to relocate to Watson Island. The move was partly financed by a $25 million loan from the federal Department of Housing and Urban Development. Both the city and the county agree to serve as guarantors.
The park signed a 60-year lease with Miami and opened its doors to visitors in 2003.
But attendance figures were never as high as expected. At first, park officials blamed the post-9/11 tourism slowdown. They later pointed to the economic downturn and the construction of the Port of Miami tunnel.
“It’s been one challenge after another challenge,” Levine said.
Jungle Island was able to defer its payments on the HUD loan until this year. The park also amended its lease with the city, enabling rent payments to be pushed back, too.
But over the last decade, Miami and Miami-Dade County have had to loan millions of dollars to Jungle Island.
The lingering economic slowdown has not helped. Of late, the park is averaging about 450,000 visitors annually — about 250,000 shy of the attendance figure Levine once predicted.
Although Jungle Island is not currently in default of any financial obligation to Miami, a $2 million payment on the HUD loan is due in August.
Levine says that’s just not possible under the current circumstances. But City Manager Johnny Martinez called Jungle Island’s proposal “unacceptable.”
“They need to live up to the terms of their lease,” Martinez said. “We don’t want to expand it any more.”
Rejecting the deal, however, could have negative consequences on the city’s finances.
Should the park default on the HUD loan, 80 percent of the $15 million balance would fall to the city, the remaining 20 percent to the county.
Miami commissioners have several options. They could foreclose on the property. They could solicit bids for a new attraction on Watson Island, or use the land for another purpose entirely. Or they could approve the park’s proposal.
“Whatever decision we make is a bad decision,” Vice Chairman Marc Sarnoff said, fearing that the city might have to pony up the pending payment in the short term until the matter is resolved.
Levine is adamant that Jungle Island is worth saving. He points out that the park employs more than 600 employees, and is one of the few family-friendly attractions in Miami.
“We do a great deal of stuff for charities,” Levine said. “We have thousands of school children and campers who come here.”
Regalado sees it differently.
“The fundamental problem is that [their business plan] isn’t viable,” he said. “They want to stay on the same route.”