MYRTLE BEACH, SC Freestyle Music Park's new owners have signed a $20 million mortgage with a foreign lender, fueling more speculation that the theme park may be planning to reopen.
FPI US LLC, which purchased Freestyle out of foreclosure last summer, is listed as the mortgagor in documents filed Dec. 22, 2011 with the Horry County Register of Deeds office.
The mortgagee is identified as Ysanne Trading Limited, a company organized and existing under the laws of the British Virgin Islands and based in Nicosia, Cyprus, documents show.
The $20 million mortgage was recorded nearly five months after FPI US bought the park for $7 million at a foreclosure auction Aug. 1, 2011.
Property records identify FPI US as the lender to FPI MB Entertainment, previous owners of Freestyle Music Park.
FPI MB bought the park out of bankruptcy for $25 million in February 2009, but the park fell into bankruptcy later that year.
FPI US was the approved bidder at the Aug. 1 foreclosure sale, according to a letter from Horry County Master in Equity Cynthia Graham Howe.
A deed from the Aug. 1 foreclosure sale was also filed Dec. 22, immediately before the $20 million mortgage was signed, records show.
David Slough, an attorney representing FPI US, couldn't be reached for comment as of this posting.
In an Aug. 8, 2011 e-mail to the Chronicle, Slough said his clients had three options. The owners could sell the park, lease it to a third party or try to re-open it, he said.
"Since the foreclosure just occurred, no decisions have been made on either of these options," Slough said. "At this time, there is no paperwork from the foreclosure sale showing the sales price of $7 million. A deed will be entered in the next few weeks conveying title from the Master in Equity."
Now that the deed has been entered, the $20 million loan could suggest Freestyle's new owners are preparing to re-open the park, said Brad Lofton, president and CEO of the Myrtle Beach Regional Economic Development Corporation.
"That's what it sounds like to me, unless they're using that site as collateral to finance another site, but that's unlikely," Lofton said.
If the park is preparing to reopen, it would represent the second major property development in the Fantasy Harbour area this year.
On Dec. 30, 2011, General Electric Credit Equities sold 52.29 acres at the old Waccamaw Pottery to Num 3W LLC for $7.5 million, according to the Horry County Register of Deeds office. The new investors plan to revitalize the old malls.
Lofton said revitalization of the both the park and malls would be an extremely positive development for the Fantasy Harbour area.
"I think they [Freestyle and Waccamaw Pottery] provide a synergy for each other," he said. "Folks going to the theme park would patronize the food court and retail areas of the mall."
Holley McMillen, sales manager for the Clarion Hotel and Conference Center, which is located near both sites, said reopening the park would be a major boon for the hotel.
"Maybe that means they are putting money into the park and hopefully reopening it," McMillen said. "Whether they could reopen by the summer I don't know. If they were to reopen they would need to hustle."
Reopening the park, originally built and packaged as Hard Rock Park, wouldn't be impossible.
FPI MB Entertainment reopened Freestyle Music Park on May 23, 2009 after purchasing it out of bankruptcy on Feb. 19, 2009.
More details of this developing story will be posted as they become available.
The former Freestyle Music Park likely will stay closed for a third consecutive summer as time is running out for a new operator to come in and get it ready by the time tourists start rolling in, experts said.
There’s only three months before the traditional kick off to the summer season in May, not leaving much time for a new owner or operator to close a deal on the 50-acre park off U.S. 501 in Fantasy Harbour, rebrand it, possibly change it by adding new rides, line up required ride inspections and do whatever else needs to be done before the park - which has been closed for two and a half years - is ready to greet visitors. “The possibility of that is remote at best,” said Tom Hiles, a consultant on the project.
FPI US LLC, the mortgage holder that reclaimed the park property through the Horry County foreclosure auction in August, had aimed to find a buyer or group to operate the park in time for this summer. Talks with interested groups continue, and FPI still is confident the theme park could work under the right operator, said Franklin Daniels, a Myrtle Beach attorney who represents FPI. “There are continued discussions [with interested groups],” he said.
In December, FPI US filed paperwork with Horry County showing it had mortgaged the property for $20 million with Ysanne Trading Limited, a firm based in the British Virgin Islands. Daniels said that money is needed to cover the expenses associated with the property, including security, power bills, consultants and maintenance workers who regularly run the rides to keep them in shape. It’s such a large amount to ensure FPI has enough until the property is sold without having to go through the process again, he said. “They needed a credit line for helping pay the expenses of the limited operations they have until it is sold,” Daniels said.
Some remain optimistic the park will be back for 2013.
“It’s at least a year down the road, best case scenario,” said Alain Wizman, director of commercial real estate with Keller Williams in Myrtle Beach who has been talking with prospective buyers. “In my opinion, it’s impossible to do at this time [for this summer].”
But it has been done. FPI MB Entertainment LLC bought what was then Hard Rock Park out of bankruptcy in February 2009 for $25 million, rebranded it as Freestyle Music Park and opened by Memorial Day that year. But the park was short-lived, operating only for one summer before falling into financial troubles amid the recession. The park hasn’t operated since then.
Though the Freestyle owners pulled off an opening in three months, some say it’s not something that should be tried again, especially because the park has been closed for much longer this time than when the Freestyle owners bought it about six months after it closed. The park still employs a maintenance worker to regularly run the rides to keep them in shape, Daniels has said.
“The last group that tried that was ineffective in their attempt,” Wizman said.
If the park were to reopen, it would be a second shot in the arm for an area that’s felt neglected in recent years with the closed theme park not luring visitors to the area and the run-down property once known as Waccamaw Pottery and the Waccamaw Factory Shoppes, which houses only three tenants.
But new life is in the works for the former shopping center. A group of investors bought the former Waccamaw Pottery for $7.5 million with plans to gradually bring in new stores, restaurants and entertainment venues and rehab the property. Neighbors have said that work – including landscaping and boarding up busted windows – already has improved the area and made it seem safer.
A few new stores could open there by the summer, though it will take up to two years before the full mall reopens, officials have said.
Those plans won’t influence the theme park’s timetable, officials said. The theme park isn’t connected to that property anymore – Hard Rock Park owners once had planned to demolish the shopping center to make way for development including lodging properties and stores that would tie into the theme park. The down economy took that planned project, dubbed “Paradise City,” off the table.
Still, bringing new life to the area, as the new owners of the Waccamaw Pottery aim to do, helps, Hiles said.
“Anything you do in that area would be a plus,” he said. “There is no doubt about it.” Some experts have said that a theme park, especially one in that location miles off the beach, isn’t a viable project for the Myrtle Beach area, where tourists come to spend their time on the beach all day, not at a theme park, they said. And the park’s failures – twice under two different owners – might turn off prospective investors, they say. The owners have learned lessons from the park’s two failed seasons, Daniels has said.
Amusement parks such as Family Kingdom and The Myrtle Beach Pavilion Amusement Park, which closed after the 2006 season, have worked here because they are smaller parks right off the beach where tourists could walk to and spend a few hours – not a whole day – and pay much less, said Jay Coley, a co-owner of Imaginations dancewear and costumes, the only store open at the former Waccamaw Pottery that has daily hours. “I don’t think that would ever be an amusement park that will work,” he said, pointing toward the former Freestyle Music Park. “It’s a bad location. I don’t think it will ever make it.”
But others say it can work; it just needs the right operator and a better economy than what the others faced. “I think it is an extremely viable project,” Wizman said. “The two attempts that were made were not planned as well as they could be. But with the right tools, it could be an extremely successful project.”