Investors are closing in on a complex $60 million deal for Jungle Island, the animal theme park on city-owned Watson Island with a troubled financial past.
On Thursday, Miami commissioners will consider approving the transfer of the lease from the park’s private ownership group to ESJ Capital Partners, an Aventura-based real estate firm with strong backing from European investors.
It’s the first step in a planned, multi-year rebranding-and-renovation project that ESJ hopes will make Jungle Island into one of Miami's premier tourism destinations.
“Jungle Island is an incredible jewel, located right on the water, situated right between Miami and Miami Beach,” said Alexander Tachmes, an attorney at Shutts & Bowen who is representing ESJ. “The park has a lot of potential and — with some improvements that our client will make — we think it will be a great investment.”
Proposed additions include a zip-line, water features, better dining options and more entertainment, according to John Dunlap, Jungle Island’s president, and a former director of the San Diego Zoo.
Current owner Bern Levine bought Jungle Island in 1988 (it opened in 1936) and eventually moved the park from Pinecrest to Watson Island along the MacArthur Causeway where it reopened in 2003.
Ten years later, Levine hired Dunlap to revitalize the attraction after it suffered during the recession. Jungle Island has required several government loans to stay afloat.
“We were highly involved in trying to go out and find a group to bring in capital,” said Dunlap, who unveiled a new master plan for the park after taking over. “We will stay on to help implement the new strategy. ... We’re trying to be a little bit more Miami. We want to expand our market to teenagers ... and people coming to Miami for the nightclub scene and good restaurants as an exciting day-time attraction.”
In September, when the Miami Herald broke the news of the pending sale, both Miami Mayor Tomás Regalado and Commissioner Ken Russell spoke positively of the planned improvements. Watson Island sits in Russell’s district and his opinion is likely to sway other commissioners.
The city was still completing its due diligence on the deal Tuesday.
Discussions with city officials have included the prospect of building a hotel on the 18-acre site, which would require voter approval at the polls.
That might alarm some nearby residents.
“We haven’t seen the specifics and I don’t want to be prejudicial against Jungle Island, but I can say that we will be extraordinarily watchful of the way the city of Miami handles this,” said Roger Craver, who lives on the Venetian Islands and was one of the plaintiffs in a lawsuit filed against the city over another development on Watson Island. “The big issue is traffic.”
In the past, judges dismissed several lawsuits seeking to stop new projects, ruling the plaintiffs did not have standing. But on Election Day Miami voters gave every citizen the right to sue the city.
“Now we have a powerful new tool to hold the city’s feet to the fire,” said Craver, a leading member of the Coalition against Causeway Chaos, a nonprofit that campaigned for the charter amendment.
But ESJ says it is not considering a hotel at Jungle Island — at least not right away.
“We have a list of short-term improvements that will bring a lot more people to the park and increase cash flow,” Tachmes said.
Jungle Island currently attracts 430,000 visitors per year, according to Dunlap. He said its byzantine finances are finally in order but wouldn’t confirm that the attraction is turning a profit.
Here’s how the $60 million price tag breaks down. Most of it is debt assumed by the buyer, not cash paid to the seller.
The park owes approximately $30 million in principal and interest to the city of Miami, Miami-Dade County and the U.S. Department of Housing and Urban Development, Dunlap said.
ESJ will assume that debt at closing, as well as a loan from a private lender, deferred rent to the city and other obligations, for a total of roughly $45 million.
Levine and his partners will receive $15 million in equity. They’ll use $5 million to pay down park debt and will also be on the hook for a transfer fee to the city of no less than $150,000.
Dunlap said Levine contributed $16 million of his own money to Jungle Island’s move and re-opening.
“It was a labor of love,” Dunlap said. “No one is getting rich off this deal.”
Both the county and feds will have to sign off on the complicated transaction, a process that could extend into next year.