Thursday, January 8, 2015

Watson Island Update: Surprising Profit, New Opposition

 By John Dorschner
    After years of struggle, Jungle Island is suddenly turning a profit on paper, but the huge swing from repeated losses appears to be due primarily to changes in the way it reports its finances.
    Meanwhile, the other major tenant on Watson Island, Island Gardens, is still in search of financing after more than a decade on the drawing boards, and the mayor of Miami Beach is joining its vocal opponents in trying to shut the project down.
    The financial reports of the self-described "Miami"s No. 1 family attraction," obtained through a public records request from the city of Miami, show that in September Jungle Island reported a year-to-date loss of $1.17 million. Its October report indicates it netted $301,432 for the month, while showing a year-to-date net income after allocations of $1.36 million -- a swing of $2.5 million in one month.
    Spokeswoman Rachel Pinzur declined to explain what happened.  "As a privately held institution, Jungle Island does not discuss its finances or accounting practices."
    Jungle Island is required to make monthly financial reports to the city because its revenue determines the rent it pays the city. In October, the rent came to $65,007, considerably higher than $38,216 paid in September, but park leadership has noted in the past that attendance fluctuates by large amounts depending on time of year. In October, admissions brought in $451,402, compared to $253,030 in September.
    One notable difference in accounting:  In September, the park listed fixed income expenses year-to-date of $1.7 million. That included how much the park spends on interest for its loans and for depreciation. That category is missing from the October report.
    Another item of interest: In October, Jungle Island earned almost as much money from its banquet facilities ($442,000) as it does in amusement park admissions ($451,000).
                                                 EXECUTIVE SHAKEUP   
 Jungle Island President John Dunlap continues to make changes in his management team, which has gone through considerable turnover since he took over in June 2013.
    Recent changes: Christopher Gould, general manager of a Fort Lauderdale hotel, becomes managing director, dealing with day-to-day operations, replacing a staffer Dunlap brought with him from San Diego. Eric Eimstad has been named chief marketing officer, moving over from the Miami Seaquarium. Kevin Henderson, from the Minnesota Zoological Garden, is moving from snow-removal issues to handing tropical plants as he takes over as senior operations manager/facilities.
    Spokeswoman Pinzur explained the changes: "Jungle Island is embarking on the largest endeavor undertaken in the attraction’s 78-year history. In doing so, Jungle Island has sought the very best leaders in the industry to help oversee park operations while the company's president remains focused on the master plan project."
    Bern Levine, Jungle Island's lead owner, said he continues to have confidence in Dunlap's leadership. "He's doing great," he said in a telephone interview.
                                  FLAGSTONE KEEPS SEEKING FINANCING
    On the other side of the island, Island Gardens continues to make slow progress in creating a marina for megayachts -- the first step for a massive high rise development that was supposed to have been finished a decade ago.
    Flagstone Property Group continues to looking for funding for its $700 million project. In September, Greenwich Group International, a major investment firm, said it expected to find investment partners for Flagstone "within two months." Greenwich did not respond to a recent query about the investors. 
    Flagstone spokeswoman Bettina Inclán Agen emailed: "Flagstone is in discussions with several prospective parties interested in investing in various components of this world-class development and North America's only super-yacht marina."
     Inclán stated: "Island Gardens is on schedule and on pace. One of the first items set for completion at Island Gardens is North America’s only super-yacht marina. The first phase of the marina will be finished during the first quarter of 2015, with final completion of the marina being accomplished towards the end of the year."
    Meanwhile, a judge has thrown out a lawsuit by some Miami residents who alleged that the Flagstone deal with the city violated the city's charter because it required only $2 million a year in rent when it should be paying $7 million, based on appraised property value.
    A third amended complaint by seven residents, led by Stephen Herbits, was filed in late December. Among other charges, the lawsuit charges that the development would be a disaster for traffic moving along the causeways between Miami and Miami Beach. Their website is
    They're getting increased support. Miami Beach Mayor Philip Levine posted on his Facebook page that the Flagstone project "will be detrimental to our already fragile and overburdened traffic infrastructure namely traffic on the MacArthur Causeway. I will continue to oppose this project and have instructed our City Attorney to explore all legal remedies available to the City."