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Posts Tagged ‘Economic Development Corporation’

Under Construction:  Restaurant at Surf Ave and 10th Street in Luna Park. November 24, 2010. Photo © Bruce Handy/Pablo 57

Under Construction: Restaurant at Surf Ave and 10th Street in Luna Park. November 24, 2010. Photo © Bruce Handy/Pablo 57

At the corner of Surf Avenue and 10th Street in Coney Island, construction workers have been emptying rubble into a dumpster and digging up the street. It doesn’t look like much now, but by next season a $1.4 million sit-down restaurant with a view of the Cyclone roller coaster will be open for business.

As ATZ reported last week, the new restaurant will be run by Luna Park’s partner Sodexo, one of the largest food and facilities management companies in the world. Luna Park CEO Valerio Ferrari told ATZ that $1.4 million is being invested in the restaurant, which will be open year-round and feature waiter service and a variety of food.

Unlike the Sodexo-run restaurants set to take over what Ferrari described as “some but not all” of the Boardwalk businesses, this location is not controversial since the property was already vacant. Gregory & Paul’s Surf Avenue eatery closed after Thor Equities booted out Astroland two years ago. What’s controversial is corporate giant Sodexo’s highly unpublicized partnership with Luna Park Coney Island, which is itself a public private partnership with the City of New York. Why didn’t the NYCEDC issue a press release in May?

Since ATZ broke the news in Meet Sodexo: Luna Park Coney Island’s Partner for “On-Site Service Solutions” (November 23, 2010), readers have emailed us links to articles about everything from high prices in Sodexo-run college cafeterias in New York and New Jersey to the Washington Post’s “D” grade for the Sodexo-run cafeteria at the U.S. Department of Agriculture.

The most notable link is a press release from Attorney General Andrew Cuomo in July announcing “a $20 million settlement with food services provider Sodexo for overcharging 21 New York school districts as well as the SUNY system…” Said Cuomo, “This company cut sweetheart deals with suppliers and then denied taxpayer-supported schools the benefits. The state and federal regulations regarding such contracts exist to protect taxpayers, and I thank the whistleblowers for having the courage to bring this to our attention.”

Paul's Daughter on Coney Island Boardwalk. Photo © Tricia Vita/me-myself-i via flickr

Forty Year Old Business Being Replaced by Sodexo: Paul's Daughter on Coney Island Boardwalk. Photo © Tricia Vita/me-myself-i via flickr

New York Magazine’s Grub Street asked “Could a 40-Year-Old Coney Institution Be Replaced By a Corporate Cafeteria Giant?” Yes, according to Ferrari, Sodexo is expected to take over the Boardwalk outpost of G & P’s, now called Paul’s Daughter, so it looks like it will indeed be Goodbye to My Coney Island Equivalent of Proust’s Madeleine, barring a reprieve by a judge or the Mayor. Merde alors.

Our readers were equally unenthusiastic about a French multinational best known for running cafeterias for schools, corporations, hospitals, prisons and the military taking over the food operation at the People’s Playground and pushing out the indigenous Mom and Pops. “Sodexo was sub-contracted to handle all food & beverage services at the Fortune 50 corporation that I used to work for,” commented one of our readers. “In a nutshell, it is sterile, soul-less, generic food and beverage service.”

But that’s not why ATZ is unlikely to become a regular patron of the new Sodexo restaurant. As someone who works in Coney Island, we simply don’t have time or money to wait on line with the tourists. When we’re on the job, we brown bag it or a few of us will order from reasonably priced neighborhood places like Classic Heros and Pizza on the Run, which are just outside the amusement area. The prices at Luna Park’s Sodexo kiosks were on the high side for Coney Island. $5.00 plus tax for a cup of watermelon that could be bought for a couple of bucks from a vendor just down the block. $2.50 plus tax for a 20 ounce bottle of water which cost $2.00 in a vending machine across the street. Who’s pocketing the extra quarters and dollars?

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

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

Ask New York City’s Economic Development Corporation, the secretive, quasi-governmental entity that is the City’s vehicle for promoting economic growth. It is the NYCEDC that made the 10-year contract with Zamperla for $100,000 annual rent plus a reported 10% of the gross in the first year of operation and pulls their strings like a puppeteer.

Interestingly, an Associated Press article about the eviction of the Boardwalk businesses misreported that the company is “paying the city $1 million plus part of gross receipts.” We got a laugh out of that, but the reporter can be forgiven for thinking the correct $100K figure was so paltry as to be a typo. To put this number in perspective, consider that Boardwalk businesses like Ruby’s and Cha Cha’s have been paying $100,000 annual rent in recent years. As for Luna Park’s second year of operation, including who stands to earn what from the Boardwalk leases and Sodexo’s cut, neither the NYCEDC nor Zamperla is saying, despite ATZ’s repeated requests.

Last year when the Coney Island Amusement Operator RFP was issued, NYCEDC disclosed to potential bidders that “While we cannot share information on individual licenses at this time, we can report that in the past, the gross potential rent for the Boardwalk tenants was approximately $750,000 to $900,000.” Considering that the property is City-owned and was purchased with $95.6 million of public funds, do you think this information is proprietary or public? We’ll let you know when we receive the results of our Freedom of Information Law (FOIL) request.

UPDATE March 31, 2013:

Surf’s Up for CAI Foods in Coney Island, Sodexo Is Out. Sodexo’s departure had long been rumored and is something to cheer about. According to the partnership agreement, after 3 years either party was free to terminate the lease, with CAI having to reimburse the remaining value of Sodexo’s initial investment, with interest.

CIDC Map of the Coney Island Amusement Operator Sites.  Credit: Coney Island Development Corporation

CIDC Map of the Coney Island Amusement Operator Sites. Credit: Coney Island Development Corporation

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Related posts on ATZ…

March 31, 2013: Surf’s Up for CAI Foods in Coney Island, Sodexo Is Out

November 23, 2010: Meet Sodexo: Luna Park Coney Island’s Partner for “On-Site Service Solutions”

November 10, 2010: This Week in Coney Island: Party at Paul’s Daughter, Hypocrisy at NYCEDC

November 1, 2010: Out With the Old in Coney Island: Only 2 of 11 Boardwalk Businesses Invited Back

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