10 Million In Hand Jungle Island Seeks New Deal From Miami
Written by Patricia Hoyos on February 9, 2012
By Patricia Hoyos
Jungle Island is asking to restructure loan payments to the City of Miami to relieve financial strain after it negotiated terms with an undisclosed group to invest in the attraction.
"I think the bottom line is that right now the way the project’s financing is structured it’s really not working well for anybody," said Brian May, lobbyist for the Watson Island banquet hall and zoological park. "The debt payments are burdening the project and burdening the developers. They are having a very tough time making the payments on the HUD [US Department of Housing and Urban Development] loan and past debt that the city has paid."
Jungle Island has secured $10 million from investors to pay down its outstanding HUD loan, which was used to construct the park, said a letter sent to city officials Jan. 31. The investors’ offer hinges on the city agreeing to alter the debt structure by May 15, the letter said.
"Simply put, the current debt must be diminished considerably, and additional capital must be invested in the project, in order for the attraction to be financially sustainable in the long-term," the letter states.
Jungle Island still owes about $15 million of the $25 million loan, Mr. May said.
Miami Mayor Tomas Regalado said that besides the HUD loan, Jungle Island owes the city property taxes and rent that probably total another $15 million.
According to the letter, the city denied Jungle Island’s application in 2003 for an enterprise zone property tax abatement under the city’s Enterprise Zone Program. Eventually, Miami-Dade County acted on the application but Jungle Island still has property tax obligations to the city that weren’t contemplated in the park’s original financial projections, the letter states.
"There is no decision," Mr. Regalado said of a city response to the letter. "But we cannot continue with the policy that it’s "too big to fail’ and keep subsidizing Jungle Island."
Along with the letter, Jungle Island sent a $531,944 check for loan interest due the city and for the cost of refinancing the HUD loan.
Mr. Regalado said the city’s law department is reviewing the letter before depositing the check to ensure that accepting payment won’t obligate the city to accept Jungle Island’s requests
Besides restructuring its debt to the city, the park wants the city to lift restrictions such as height that limit development at Jungle Island, Mr. May said. He said he couldn’t discuss uses being considered.
With the remaining debt, it’s hard for the park to attract interest from investors to further develop it, Mr. May said.
Jungle Island, previously Parrot Jungle, moved from Pinecrest to manmade Watson Island in 2003.
In the letter, signed by Bilzin Sumberg land use attorney Albert E. Dotson Jr., the park blames tourism’s dive after the 2001 terrorist attacks and the 2008 recession for some of its problems. Although Jungle Island is modestly gaining annual gross revenues, the letter says, they aren’t enough for it to pay current debt. In addition, Jungle Island blames the loan’s interest rate for its financial burdens.