June 27, 2012

Bluegrass Boardwalk blues

Questions remain over Holiday World owners abandoning Bluegrass Boardwalk project

It appeared that the Kentucky Kingdom curse was over.

On June 13, the Kentucky Tourism Development Finance Authority approved $3.9 million in tax incentives for Bluegrass Boardwalk Inc. — comprised of the Koch family, owners of Indiana amusement park Holiday World — to breathe life into the Louisville park that has been dormant since 2009.

“Right now there are no major obstacles that we can foresee,” Bluegrass Boardwalk partner Mike Kamp told The Courier-Journal. “A thunderstorm may blow in and you don’t know what will happen. But we’re very optimistic that we’ll have clear sailings and blue skies in front of us.”

Just two days later, those blue skies became a F5 tornado, as Bluegrass Boardwalk announced they would immediately abandon the project, citing “many layers of governmental regulations and stipulations,” and having to lease the land instead of own it.

But the Koch family had already leaped the two biggest bureaucratic hurdles in this process — a 50-year lease agreement (and two 25-year options) with the Kentucky State Fair Board, who own the land, and completing the nearly four-month process of being approved for tourism tax incentives — which has left many scratching their heads… or questioning their motives.

One skeptic is former Kentucky Kingdom owner Ed Hart, whose bid to operate the park was denied last fall after a drawn-out 18-month process. Following the Kochs’ withdrawal, Hart has implied that they were only interested in Bluegrass Boardwalk as a “defensive move,” setting up Holiday World’s potential market rival for failure.

Though gauging the Kochs’ true motives by their public statements is a difficult task, correspondence between the company and Kentucky’s Tourism, Arts and Heritage Cabinet — obtained through an open records request by LEO Weekly — sheds more light on the matter, but also more questions.

Following their lease agreement with the Fair Board on Feb. 23, there was little public disharmony between Bluegrass Boardwalk and the regulatory structure they would later blame for the project’s demise.

However, behind the scenes on March 20, Holiday World president Dan Koch wrote an email to Tourism Secretary Marcheta Sparrow, warning that delays in obtaining a finalized lease and tax incentives threatened the park’s opening in 2013.

“Delays by non-Fair Board persons in acting upon our completed paperwork is causing us great concern and causing actual problematic delays in starting the revitalization of the park,” wrote Koch.

Despite these concerns, the process would speed up in late April, as Bluegrass Boardwalk was given preliminary approval for the tourism tax incentives. Todd Cassidy, executive director of Tourism’s Office of Financial Incentives, took great effort in emails to expedite the completion of the project’s economic impact study. Such efforts stood in stark contrast to the department’s interactions with Hart in 2010 and 2011, as correspondence LEO obtained by an open records request last year showed what more resembled a string of roadblocks in his way.

But doubts about Bluegrass Boardwalk became more serious — and public — on May 30, as the company announced it would delay the park’s opening until 2014, though not due to bureaucratic red tape. They claimed that “ride manufacturers” brought to the park said the infrastructure was left in shambles due to lack of maintenance, and that 75 percent of the rides were unusable.

However, their statement also mentioned that “detailed inspection” by “certified ride experts” had not begun at the site, as they were waiting for the lease to be signed. And in an email almost two months earlier to Secretary Sparrow, Dan Koch said they had met with ride manufacturers at the park, and their “revitalization plan is completely ready,” with no mention of poor conditions.

Fair Board CEO and President Harold Workman called the company’s description of the park as “a little overstated,” and spokesperson Amanda Storment tells LEO that this was the first time the Kochs had brought such concerns to their attention.

Following the company’s statement, Cassidy would forward an email just six days earlier from Mike Kamp to the economic impact consultant in which he says a steel coaster will be ready in 2013, “pending detailed ride inspection.”

Cassidy then emailed a co-worker that he would tell the Kochs “they will be presented for final approval on (June 13). Maybe that will calm them down.”

The incentives were approved on that day, followed two days later by the Kochs’ withdrawal from the project.

Natalie Koch says that the park’s condition had no role in their decision. But for any company interested in operating the park just down the road from Holiday World — enjoying record attendance with little regional competition — the black cloud over Kentucky Kingdom remains ominous.

Natalie Koch has insisted that they negotiated in good faith, and both Workman and Fair Board chairman Ron Carmicle agree.

“I’m really confused and surprised, I don’t know why this happened,” Carmicle tells LEO. “But I don’t think this was a diversionary tactic to slow this down or stifle competition. I think they came into it with good faith.”

LEO Weekly submitted questions to Holiday World concerning the remaining government regulations they had an issue with, and details on their inspection of the park. Their spokesperson replied they would no longer be making any comments about Bluegrass Boardwalk.

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