City Hits Playland Operator with Unexpected $3.6 Million Tax Bill
Private operator Standard Amusements just completed its first season running Rye Playland, taking over from Westchester County. Due to an ongoing multi-million dollar capital improvement project, the park opened late and the beach and pool did not open in the 2022 season.
But the roller coaster ride from Standard, whose owner Nicholas J. Singer fought long and hard to win the long term operating contract, just got a bit more wild.
In a letter this past May 26th to the Westchester County Tax Commission, the ironically named City of Rye Tax Assessor Patrick McEvily notified the County of a change in the tax exempt status of Playland Park. He stated the City of Rye intends to send Standard Amusements a tax bill of $3.6 million in the Spring of 2023.
The City argues the County has transferred “complete control” of Playland to Standard Amusements for the 30 year management agreement. “Portions of publicly-owned property used for private for-profit purposes must be assessed and pay real estate taxes on the portion of the public property devoted to “for profit” uses,” said taxman McEvily in his letter to the County.
Standard Amusements is a for profit Delaware LLC, and a subsidiary of United Parks, and owner and operator of amusement and water parks. United Parks is a subsidiary of Purchase Capital, an investment firm that serves the family office of Nick Singer. This control and structure is behind Rye’s justification of the $3.6 million dollar tax bill.
Standard Does Not Want to Get on This Roller Coaster
As one might imagine, Standard disagrees with the City’s tax assessment. “The City’s analysis for revoking Playland’s tax exempt status is wrong,” said Standard attorney Alfred E. Donnellan of DelBello Donnellan Weingarten Wise & Wiederkehr, LLP in a letter to authorities. Donnellan cites various case law before conclusion “Standard’s management of – and profit from – Playland are irrelevant to the tax-exemption legal analysis.”
Emails from the summer and fall of 2021 between the City and Standard obtained under FOIL show the City unsuccessfully negotiating with Standard’s Nick Singer in regards to the reimbursement of City costs related to Playland. “I feel Rye’s approach to date has been fairly one-sided and does not recognize that a) several major categories of cost (particularly police) will decrease under SA’s management and b) the substantial positive impact that will benefit the community,” said Singer in the emails.
Sewer, Police, Fire & Ambulance Costs
The City of Rye incurs real costs providing services to Playland, its staff and its visitors. In a memo to Standard Amusements in the summer of 2021, Rye City Manager Greg Usry outlines a rough cut of direct costs. The memo includes the cost of sewer ($25-30K, potentially tripling in the next few years), police ($231K), fire ($32K) and EMS ($35K).
Strange Bedfellows
One entity coming on the side of Standard is Westchester County. County Executive George Latimer, who lives next to Playland and fought against Standard Amusements for many years, is siding with the operator Standard Amusements.
“Playland is a public park open to public use,” Latimer told MyRye.com. “It is exempt from real estate property taxes under state law. The County owns the park. The fact that Playland is managed by a private company does not change that result. When I served as a City official, I understood that truth, and so has every prior City Administration in the past 30 years. The current City Administration’s decision to challenge that understanding is their prerogative but I’m confident a court of law will reaffirm the superior authority of State law. The City has its fiscal challenges and we are always ready to discuss how we can help. Attempting to tax County property that is by State law not subject to tax is not one of those ways.”
A win for Rye might create similar challenges for Latimer across the County’s park system.
This $3.6 million tax bill roller coaster will continue in court. This story was first reported by LoHud.com.
Selected documents from the FOIL request:
- Standard June 21st letter to Rye & Rye City May 26th letter to County
- Rye City letter to County June 1st on taxable areas
- Rye City to Standard memo on Playland Costs Summary 7.30.21
- 2021 Emails – Standard and City of Rye
- Rye PD and FD costs Final BST Co. Letter re City of Rye
- Amended Playland Management Agreement
