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.”
Change the scheme, Alter the mood! Electrify the boys and girls if you would be so kind!
Very odd/creepy post coming... but I am in the library and this kid in front of me who is a foreign exchange student has his iPad out. What is his background display? Freakin Hard Rock Park. He is with a girl, there is a large body of water in the foreground, and a giant guitar in the background. I suddenly felt a little sad that I never got to go to this park. It just looks so cool. Besides telling you about my not doing homework sidetracks, I wanted to mention that some people went to this park. People who weren't even from this country. Was it the locals that were the problem?
Land that was once supposed to be the site of a hotel for the now defunct Hard Rock Park will be sold at Horry County’s foreclosure auction Monday, with court filings revealing more details about how optimistic developers were about the project. The 27-acre tract along the Intracoastal Waterway was bought by Myrtle Property Owners II, LLC for $8 million in October 2005, about three years before Hard Rock Park opened and then closed after one, failed summer in 2008. The still vacant property – dubbed the “waterway parcel” and sold by Rosen Investments, whose manager Dick Rosen also was an investor in the theme park -- was intended for a Hard Rock hotel to support the theme park, according to court documents.
The park formerly known as Freestyle Music Park is seen across an open field. Freestyle Music Park was originally built as Hard Rock Park with a hotel planned to be built next to the park. The land the hotel was going to be built on is now headed for foreclosure auction Monday.
Myrtle Property Owners said in court filings that Rosen Investments and the theme park developers “consistently and egregiously misrepresented financial and other details of the theme park project as well as its overall likelihood of success.” MPO also said in court filings that it wouldn’t have bought the property if it hadn’t been for those claims. “We don’t think any of that took place,” said John Copeland, a Myrtle Beach attorney representing Rosen Investments. “We don’t think any of that has any basis in fact.” Attorneys in New York and Myrtle Beach who represent MPO in the case couldn’t be reached for comment. MPO made those claims against Rosen and the theme park developers in requesting the case go to arbitration in New York, which was denied.
The auction of the land is the latest in the fallout from the twice-failed theme park off U.S. 501 in Fantasy Harbour, near the Intracoastal Waterway.
Hard Rock Park, which officials said cost $400 million to build, opened for the summer 2008 and shut down for good after the season. It was bought out of bankruptcy for $25 million in early 2009 and reopened as Freestyle Music Park, which also failed after one summer and ended up in bankruptcy.
The Hard Rock theme park’s developers expected several million thrill-seekers would visit the park during its first year and that its earnings before interest, tax, depreciation and amortization -- a measure of a company’s operating performance -- would hit $61.8 million that first year – projections that MPO and others look back on and say were outlandish.
Developers expected 3.09 million people to visit the theme park during its first year in 2008 and projected that would increase by 9.3 percent in 2009, 4 percent in 2010 and 3 percent in 2011 before leveling off with a “conservative growth rate thereafter of 1.4 percent through 2017,” according to a feasibility study MPO said it was provided before buying the waterway land for the Hard Rock hotel, which was never built.
“Twenty-five percent of the people who visit Myrtle Beach would visit the park? When you put it in those terms, it does seem rather unreasonable,” said Horry County Councilman Gary Loftus, pausing to break the numbers down further. “We are talking 10,000 people a day, each and every day of the year – and that includes January, February and March. There is no way they are going to get 10,000 [visitors] October through March.”
In 2005, Rosen, the former CEO of then-Myrtle Beach based electronic parts maker AVX Corp., approached individuals, including Amnon Bar-Tur and real estate developer Ziel Feldman, about investing in Hard Rock Park and the land for the hotel, according to the court filings. Bar-Tur -- cofounder and managing partner of Safe Harbor Capital Partners, which has invested millions in real estate in the United States and United Kingdom -- and other investors eventually formed Myrtle Property Owners I to invest in the theme park, and Myrtle Beach Property Owners II to buy the land for the hotel.
Those committing millions of dollars to a project should do their research before signing any checks, said Loftus, who wasn’t involved with the theme park project. “If you didn’t do due diligence, is that my fault?” he said.
Since the park’s failed season, experts have said that the ticket price was too high for this market, though in the feasibility study cited in the court filings the developers said the $47 ticket price “is attainable and probably conservative for 2008.”
“As planned, the theme park was far too high-end, sophisticated and expensive for the anticipated market,” MPO said in its court filings. “The inaccuracy of Rosen’s representations was something that was known to South Carolina local residents such as Rosen, but not to claimants, who did not live in South Carolina.”
Rosen and theme park developers provided MPO projected budgets and performance estimates in 2005 for the Hard Rock Park that “were inaccurate and misleading, and used them with the intent to deceive” Myrtle Property Owners I and II, which borrowed $5 million for the deal, and two of its investors personally guaranteed $2 million so MPO II could purchase the waterway lot, according to court documents.
Myrtle Property Owners said in court filings that it was given false information about the park’s budget and projections and that the hotel was a “necessary condition for the theme park project to be realized.” Bar-Tur also invested in the theme park.
The feasibility study given to Myrtle Property Owners II said that, as a result of the development of the Hard Rock hotel, an additional 59,670 visitors annually would go to the theme park, according to court filings.
“In fact, Rosen simply desired to sell a parcel of land for which he had no other use. The hotel was not a necessity, but merely a pretext for Rosen to dump the waterway parcel,” MPO said in court filings. Copeland said that wasn’t the case.
About a year ago, Rosen filed a case in Horry County seeking payment for the waterway lot where the hotel was planned, saying Myrtle Property Owners owed the $8 million purchase price and $960,865.57 in interest from Sept. 3, 2008 to April 17. Past due notices were mailed to Myrtle Property Owners on May 12, 2009 and June 3, 2009, Rosen said in court filings.
“The money wasn’t paid,” Copeland said. “It’s just a straight sale that the buyer didn’t pay for.”
The land for the hotel will go to the highest bidder at Horry County’s monthly foreclosure auction at 11 a.m. Monday in Courtroom 3B at the Horry County Government and Justice Center.
Copeland said he wasn’t sure how much the property might go for. “Your guess is as good as mine,” he said. “Anybody who wants to bid can.”
Theme park fallout
The park, including its signature roller coaster that twists along George Bishop Parkway, has sat idle since fall 2009 when it shut down after its failed summer as Freestyle Music Park.
The mortgage holder, FPI US LLC, took back the property in August during the county foreclosure auction. Officials had aimed to find a buyer and reopen the park for this summer, but that didn’t happen.
At the end of last year, the former Waccamaw Pottery building, which was to have been demolished to make way for a planned “Paradise City” mixed-use development tied to the theme park, sold at the end of last year to investors aiming to rehab and restore the former shopping hub with new shops, restaurants and attractions. One new business, Block Party Nightlife, has moved in.
Loftus said that if Hard Rock Park had been successful, it could have given the beach a much-needed major new attraction that could have jumpstarted growth in the industry. “That’s what we were hoping the Hard Rock Park would be,” he said. “I wish it would have made it because it could have been helpful all the way around.”
Change the scheme, Alter the mood! Electrify the boys and girls if you would be so kind!
^Upon reading that, it seems that news report is sounding like a eulogy one would hear at a funeral service.
"We are gather here today to pay our final respects . . .
During my one and only visit to Hard Rock Park back in the summer of 2008, I had a great day at the park and would have loved to return on a future date. I even bought a T-shirt - The Moody BluesNIghts in White SatinThe Trip - because that was my favorite ride inside the park. I was looking to return in a couple of seasons to hopfully ride any new additions to the park (Believe me, the park had plenty of room for expansion).
Then what happened? Hard Rock defaulted, a new group comes in to save the day, we get a watered-down park they named Freestyle Music Park, and they too kicked the bucket within a season. So much for any return trip I may had planned.
So who's to blame for this incident? The economy, the owners, the President? Heck, you can be like Milli Vanilli and blame it on the rain, but you cannot blame it on me because I was there for one day during my Myrtle Beach vacation.
But it seems to me that since this project is long dead, then let's bury it. Can I get an "Amen"?
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