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Coney Island Boardwalk 8 Lease Deal in the Works for 2011

Posted in Redevelopment, tagged Boardwalk, Coney Island 8, Zamperla on February 15, 2011| 14 Comments »

Easter Brunch at Paul's Daughter on the Boardwalk. April 4, 2010. Photo © Tricia Vita/me-myself-i via flickr

Looks like the Coney Island Boardwalk may not be corporatized and Sodexo-fied this summer after all! Sources tell ATZ that the Mom and Pops known as “The Coney Island 8” who have been fighting eviction since November are being offered leases for the 2011 season by amusement operator Zamperla. The lease is said to be prepared and waiting for the parties to sign on the dotted line on or before February 16th. That’s tomorrow, when both sides are due back in court for the hearing that was postponed from last month.

The deal has been on our radar for the past few weeks, which is why we’ve been uncharacteristically silent on the subject. Sources have been telling us the lease has many stipulations, including a confidentiality clause, and the deal could go either way. If the deal gets done, we predict Zamperla will once again be seen as the good guy for giving up their strong arm tactics of recent months. Out with the old, in with the new will be postponed till 2012 and visitors will again be able to enjoy a beer at Ruby’s Bar and french fries at Paul’s Daughter. Shoot the Freak is expected to move to a new location to make way for the Boardwalk entrance of Zamperla’s new Scream Zone, but the rest of the businesses would reopen in their current locations.

Shoot the Freak on Fourth of July. July 4, 2009. Photo © Tricia Vita/me-myself-i via flickr

The one-year reprieve for the Mom and Pops would end on November 1, 2011, when they will be required to pack up and go. The lease is said to be for the same amount of rent as previous years. Ruby’s, Paul’s Daughter, Cha Cha’s and others paid $100,000 for the season. An additional season would give the businesses an opportunity to set aside some money for moving costs and time to find a new location. Zamperla’s Central Amusement International has a 10-year lease on the City-owned property. As ATZ first reported last year, Zamperla also has an exclusive contract with Sodexo for food and facilities management.

Sources tell ATZ the lease stipulations include a confidentiality or nondisclosure clause, which would restrict the Coney Island 8 from making public statements about the situation. It won’t be the first time these businesses had to agree to zip their lips to keep their spot on the Boardwalk.

When Thor Equities owned the Boardwalk property, the majority of businesses had leases with a confidentiality clause prohibiting all public comments about the redevelopment of Coney Island, not only for the term of the lease, but for three years after its termination. Violation of this clause would have resulted in immediate eviction and a $10,000 fine for each instance of a violation. This clause prevented the businesses from participating in the public hearings that ultimately determined the rezoning and the future of Coney Island.

Ruby's Bar & Grill, Coney Island. Photo © Bruce Handy/Pablo 57 via flickr

With 62 days left till Coney Island’s official opening day, we applaud a deal that insures the Boardwalk will be open for business. At the same time, that doesn’t let the City and its quasi-governmental agencies in charge of Coney Island redevelopment–the Economic Development Corporation (NYEDC) and the Coney Island Development Corporation (CIDC)–off the hook for not including a provision for local small businesses when the City made their lease agreement with Zamperla.

In regard to the Boardwalk operators prospects, City officials were less than candid from the day the property was purchased from Thor Equities. At the press conference, which we watched live, Shoot the Freak owner Anthony Berlingieri posed a question to the Mayor, who was taken aback. The question was “Is there a place for us?” NYEDC’s President Seth Pinsky, who is a very slick talker, stepped up to the mike to reply. Pinsky said “Our intention is for the foreseeable future to keep all the tenants in place, certainly through next summer [2010]. And we’re going to be looking to work with each of you to figure out where it makes sense for the various tenants to remain as we build out the amusement park.”

Interestingly, that part of the press conference was excised from the version that went up on the web. If a reporter from the Brooklyn Paper hadn’t followed up with a story, it would have been excised from history.

As it turns out the EDC and their satellite the CIDC did not work with each of the businesses to see where it made sense for them to remain. Apparently the EDC figured out it didn’t make sense for the Boardwalk tenants to remain, but neglected to tell anyone except Zamperla. We called out Pinsky on this quote on ATZ and twitter when he had the nerve to tweet “Support your local small business” just as Paul’s Daughter was throwing their goodbye party. We invited him to the party, but of course no one from the City would show. City officials, both elected and appointed, refused to support or say a word to the press about the small local businesses booted off City-owned property in Coney Island. It will be interesting to see what if anything City officials will have to say about the new leases and future prospects for the Boardwalk Mom and Pops.

UPDATE March 8

Yes, all eight of the Coney Island 8 signed the agreement that will allow 7 of them–Shoot the Freak is out– to lease their Boardwalk locations for one final summer before they exit quietly. We tweeted our reaction this morning. What else is there to say? If you want more info on why the Mom & Pops are being forced out, read our posts on Sodexo.

AmusingZillion
In 2010 @NYCEDC got $100K rent from Ruby’s but only $11.25K from Sodexo 4 rent on City-owned property bought for $95.6M http://bit.ly/gNPci3

AmusingZillion
Happy we’ll be able to drink @ Ruby’s, eat @ Paul’s Daughter this season. But deal nothing to celebrate. #ConeyIsland small biz on way out

UPDATE March 6

Tomorrow, March 7th, the Coney Island 8 and Zamperla are due back in court over the Boardwalk evictions. A one-year lease deal ihas been in the works for weeks. Will they all sign?

UPDATE February 15, 7:07 pm

New York Mag’s Grub Street just talked with Coney Island Island 8 attorney Marc Aronson who says: “We’re working on something that’ll be an amicable resolution for all the parties and something that’ll be really just for both sides, and we’re really close.” He says he expects tomorrow’s court date to be postponed for a weeks, “at which point we’ll finalize the details of the stipulation or agreement.”

Grill House, Coney Island Boardwalk. Last day of season, Oct 31, 2010. Photo © Tricia Vita/me-myself-i via flickr

Sodexo Investing $2.4M in Zamperla’s Coney Island

Posted in Real Estate, Redevelopment, tagged Boardwalk, Central Amusement International, Coney Island 8, Sodexo, Zamperla on January 20, 2011| 8 Comments »

Under Construction: Sodexo Restaurant on Surf at 10th St, Coney Island. December 23, 2010. Photo © Bruce Handy/Coney Island Photo Diary via flickr

The French multinational Sodexo is investing $2.4 million in Zamperla’s Coney Island and has an exclusive contract to manage the food and facilities for the City’s amusement operator, sources told ATZ.

Sodexo has been Zamperla’s partner for “On Site Service Solutions” since Luna Park opened last May, though the partnership was not announced by the City and was known only within Coney Island until ATZ first reported it in November.

This season, Sodexo will operate food and beverage kiosks in the new Scream Zone in addition to Luna Park. The corporation, which is the 22nd largest in the world, also plans to open up their own restaurants at Paul’s Daughter’s Boardwalk location and the former Gregory & Paul’s on Surf Avenue across from the Cyclone. As previously reported last month, the Surf Ave restaurant is currently under construction.

Rendering of Luna Park's Main Gate Shows Luna Park Cafe on the Left Side

ATZ obtained a copy of Zamperla/CAI’s proposal to the City which describes the Surf Avenue restaurant. The decor sounds a bit like Ruby’s and the Coney Island History Project: “The Luna Park Café pays tribute to the long history of Coney Island with memorabilia and tributes from local residents and visitors from around the world. This unique environment provides the backdrop for quick service prepared-to-order meals. The menu will be designed to provide a more balanced meal option for visitors looking for a complete meal and will be a venue where ‘healthier’ alternatives can be found. Potentially a year round venue, the Luna Park Café will also serve as the primary point of food service for all team members where an employee discount will be available.”

Sodexo Kiosk at Luna Park Coney Island. May 31, 2010. Photo © Tricia Vita/me-myself-i via flickr

The proposal goes on to say that more extreme foods will be featured inside Scream Zone. “With thrill rides comes thrilling food and beverages which will use elements of spice, exotic-flavors, irregular sizes, and ‘u-decide’ the ingredient items where guests can challenge their imaginations. A kiosk-type portable network, as previously described, will be looked upon to enter this phase of the operation. A heavy emphasis will be placed on the design of each location to assimilate into easy accessibility from each attraction. This service plan provides the flexibility needed to keep Scream Zone evolving. A final count of locations has not been determined at this time but a similar strategy as used for Luna Park Phase I will be applied.”

In regard to the Boardwalk concessions in 2011, Zamperla’s proposal says they “will be combined and integrated into the food and beverage operations of Luna Park and Scream Zone. This is an important step in the presentation of Luna Park and Scream Zone from their beach points of entry. Structures would be improved and remodeled to mesh with the aesthetics of the respective parks. To be successful within the food and beverage part of the operation, this plan will constantly be reviewed and modifications made annually. New product development will always be looked upon, as well as the demands of the guests as ways to improve.”

Sodexo is known for its cafeterias and individually branded restaurants, but nationally branded subtenants are also brought in under franchising or licensing agreements for the appearance of variety. Whether the Sodexo client is a college, school, hospital, government, corporation or leisure destination, one constant is Sodexo’s completely centralized purchasing system, which requires clients to choose from a list of “Right Products.” Another term used internally by Sodexo is “Compliant.” Vendors who offer rebates are “compliant” while those that do not are “locked out,” according to investigative reporter Lucy Komisar in “Cafeteria Kickbacks: How food-service providers like Sodexo bilk millions from taxpayers and customers.” Last July, Attorney General Cuomo announced “a $20 million settlement with food services provider Sodexo for overcharging 21 New York school districts as well as the SUNY system.”

With just 88 days till the opening of Coney Island for the season on Palm Sunday –April 17, 2011– Zamperla’s Central Amusement International is locked in an ugly eviction battle with the Coney Island 8. The veteran Mom & Pops, including Ruby’s Bar and Paul’s Daughter, which have been Boardwalk favorites for decades, hope to remain. The Coney Island 8’s website claims, “Inside information suggests that Sodexo did not want to deal with The Coney Island 8 and therefore would not accept the contract with Zamperla without full control over all the food establishments.”

Sources familiar with Zamperla’s situation don’t expect the amusement operator to agree to any settlement that would allow the Coney Island 8 to remain on the Boardwalk since plans to make over the Boardwalk are well underway. Zamperla and Sodexo are said to be bringing in new businesses which have submitted letters of intent and now have leases in hand. Some of the newcomers have already gone in and measured the spaces or received the architect’s plans. Insiders characterize the Boardwalk makeover as a done deal. The next court date is February 16, just 60 days before Coney Island’s opening day. But it’s possible a settlement will be reached before then. A settlement would at least compensate the Coney Island 8 for the costs of those very unnecessary “business plans” and help them relocate in Coney or elsewhere.

Ruby's Bar & Grill, Coney Island. May 28, 2010. Photo © Tricia Vita/me-myself-i via flickr

Coney Island 8 Eviction Hearing Postponed Till Feb 16

Posted in Real Estate, Redevelopment, tagged Boardwalk, Coney Island 8, eviction, Zamperla on January 10, 2011| 2 Comments »

ATZ learned that the result of this morning’s Coney Island 8 eviction hearing was another postponement. The case has been postponed till February 16 at the request of Zamperla’s attorneys, who need more time to prepare. At the December 10th hearing, it was the Coney Island 8’s attorney who needed more time to prepare and requested the postponement. It means they need more time to study and respond to the papers served by the other side, so don’t expect to see what today’s NY Post calls a “surf turf war” ending anytime soon.

PS: Did we mention that we have a terrible cold and do not really feel like doing anything except napping? Please send over some homemade chicken soup!