Conneaut Lake Park is moving out of bankruptcy and to new private ownership.
U.S. Bankruptcy Court for the Western District of Pennsylvania has approved Trustees of Conneaut Lake Park’s sale of the amusement park and its assets to Keldon Holdings LLC for $1.2 million in cash.
Judge Jeffery A. Deller signed off on the order approving the sale late Tuesday afternoon. Court approval of the sale requires public access to the park’s property to continue. Certain parts of the property have deed restrictions requiring it to be open for use by the general public.
Assets sold include the amusement park and its rides, water park, beach area, Hotel Conneaut, Camperland campground, and any active leases on assets such as the hotel and the park’s water system.
Deller’s approval of the order came following a 35-minute court hearing via videoconference Tuesday morning that included a language change regarding potential taxes on the sale.
While the order states the sale is exempt from taxes such as real estate transfer tax under the U.S. Bankruptcy Code, any taxing authority that claims it isn’t exempt has 14 days from the date of Tuesday’s approval order to object. If an objection is filed, a hearing then would have to be held, according to the order.
Todd Joseph of Keldon Holdings attended Tuesday’s videoconference hearing but didn’t address the court. Joseph declined Meadville Tribune requests both Monday and Tuesday for an interview about Keldon’s plans for the park. Joseph did say via email he would “do a media session at some point soon.”
The transaction may close as soon as the end of this week, Jeanne Lofgren, an attorney for Trustees, told Deller during Tuesday’s hearing.
Under terms of the purchase and sales agreement between Trustees and Keldon, the deal is to close within 60 days of the court’s approval of the sales order.
Trustees of Conneaut Lake Park is the nonprofit corporation that oversees amusement park operations. It filed for federal Chapter 11 bankruptcy protection in 2014. Bankruptcy court rules required court approval for the sale of any assets.
In January, Trustees filed a motion with the court to auction the park’s assets for at least $1.2 million. Keldon, based in Narbeth outside of Philadelphia, had approached Trustees in December about a purchase of the amusement park and its assets.
Trustees’ auction plan filed with the court required a minimum bid of $1.2 million, with Keldon Holdings LLC listed as a qualified stalking-horse bidder.
A stalking-horse bid is an initial bid on the assets of a bankrupt company. The stalking-horse bidder sets the minimum bid.
On Jan. 21, Trustees filed an expedited motion with the court for a proposed sale of the park’s assets via a public auction in Bankruptcy Court.
The COVID-19 pandemic meant Trustees couldn’t open Conneaut Lake Park in 2020. Without any real income from 2020, Trustees couldn’t open for the 2021 season, Lofgren said.
It meant Trustees needed to sell the park to someone who had the capacity to operate it, she added.
Thirteen potential bidders had looked at the property during the course of the proposed sale, according to Lofgren. Of those, 10 went through the bid procedures, but Keldon was the only bidder interested buying all the park’s assets with the public-use deed restrictions.
No other qualified bids were submitted to bankruptcy court by the Feb. 19 deadline, leaving Keldon as the buyer.
The $1.2 million proceeds from the sale will be put into escrow until final details are worked out on payments to the park’s remaining secured creditors.
Lofgren estimated that all secured creditors that have known claims against the park would get 60 cents on the dollar.
Jim Becker, executive director of Trustees of Conneaut Lake Park, said the sale is being timed to allow Keldon to open Conneaut Lake Park for the 2021 summer season, if it’s able to do so.
Becker said his understanding is Keldon intends to operate the amusement and water parks just as in past years.
“We’re doing our part to get to the (real estate) closing table as quickly as we can,” Becker said of the assets being transferred by early May at the latest.
Conneaut Lake Park traditionally operates between Memorial Day and Labor Day each summer. However, the COVID-19 pandemic remains a wildcard for 2021.
“It’s all going to depend on the status of the pandemic and the status of existing restrictions, I would imagine,” Becker said whether the park would open during 2021. “The restrictions for amusement parks and places like that have not been lifted yet” by the state. “The buyer is going to have to still comply with all those social-distancing-related activities and how to handle those.”
Transitioning the park back to private ownership was the goal of the Trustees of Conneaut Lake Park and the Economic Progress Alliance of Crawford County, the county’s lead economic development agency, said Becker, who also serves as executive director of EPACC.
Trustees of Conneaut Lake Park has been a volunteer board “with the sole purpose of making things better out there,” Becker said of the group’s role in preserving the park for the public. “They got nothing out of it but the right to be involved in doing something good to save a community asset.”
The EPACC took on saving the park as a community development project. It had acted as staff for Trustees in carrying out park operations.
“The taxing bodies being paid off after 17 years of back taxes; paying off so much of the secured creditor debt; selling those lots along the lakefront that now have new homes built on them providing more to the tax base for those same taxing bodies; infrastructure improvements at the park; double-digit growth in ticket sales year-over-year with $1.4 million in ticket sales in 2019, we thought was all pretty significant,” Becker said.
“It all paid off,” he said. “If the Alliance hadn’t stepped in so many years ago, you wouldn’t have a park out there.”
Gary Harris of Cleveland, the former owner of Conneaut Lake Park who deeded the property over for public use in 1997, said Tuesday he was pleased with the sale. He called it “a new day” for the park.
“I am glad that it appears that the Conneaut Lake Park assets will be sold to a capable owner who will hopefully return the park to its former glory,” Harris said in a statement to the Tribune. “I applaud the decision of U.S. Bankruptcy Court Judge Jeffery Deller that any purchaser of the park assets must allow free access to the public as the land of Conneaut Lake Park was donated for this purpose.”
“I wish the new park owners the best of success, and I am hopeful that all citizens from Pennsylvania, Ohio and elsewhere will be able to once again enjoy the beautiful beachfront and the parkland setting of Conneaut Lake Park,” he said. “There is simply no other place like it.”
According to the park’s website, the amusement park on the west side of Conneaut Lake opened in 1892 as Exposition Park. Among its landmarks is the Blue Streak wooden roller coaster, which dates back to 1938.