SBA closes books on Rocky Point, gets back loan plus interest
The Small Business Administration and the state were once adversaries over the future of the former Rocky Point Amusement Park. The SBA was courting developers to pay big bucks for the property on behalf of creditors while the state and city sought to reduce development and even save the park for the public. Now the SBA’s director, Office of Liquidation at U.S. Small Business Administration, Thomas Morris, praised the people who worked so hard to preserve Rocky Point for the people.
“The people there have been terrific,” Morris said, and went on to name Senator Jack Reed, Congressman James Langevin, Mayor Scott Avedisian, members of the City Council and the Department of Environmental Management who all played roles in the deposition of the 124-acre property through sales to the city and the state, but it took a long time.
The SBA served as the court appointed receiver for Moneta Capital after the park closed in 1995 and filed for bankruptcy. Following an auction of the property, a company representing luxury homebuilders, Toll Brothers, was given exclusive rights to the property with a bid of $25 million. A 399-unit housing and condo development was proposed for the land, but before the formal process of state and city review, the housing market softened and Toll Brothers pulled out of the deal. Successive developers bid on the land, offering scaled back developments.
Throughout, SBA District Director Mark Hayward sought to recover as much as possible for the agency and other Moneta creditors. Hayward maintained there was interest in the waterfront property from local developers here as well as high rollers from outside the country. As it turned out, the entire park was preserved for public use through two separate sales.
In 2008, with the prospect of the expiration of a $2.2 million federal matching grant, the city and state came up with a plan to satisfy a priority creditor with the sale of 41 acres of shoreline to the city. The match for the sales price of $4.4 million was met with $1.4 million from the state and another $800,000 from the city.
The sale of the remaining park to the state was approved this February by Federal District Court Judge Ronald Lagueux, for $9,650,000. That money came from a bond issue approved by voters in 2010.
The Department of Environmental Management is now looking to cleanup of the property with the demolition of what remains of the Shore Dinner Hall, the Palladium and the remaining cottages on Rocky Beach. Gov. Lincoln Chafee has budgeted $2.5 million for the work. No plans for how the park will be developed have been drafted yet, although at a public meeting hosted by the non-profit Rocky Point Foundation, scores of ideas were presented. The foundation was instrumental in getting the bond issue in 2010. It plans to issue a report to the state. It may also conduct additional public sessions as the state readies to open the land to the public.
Morris reported that the SBA books on Rocky Point as virtually closed at this point, with the distribution of the sale’s proceeds to the creditors.
“We essentially got all the money we advanced, plus some interest,” Morris said of the SBA.
He said this included carrying costs for the park as well as what the SBA paid the city in taxes. This represents loans and payments relating to Rocky Point, but not to all that SBA loaned Moneta Capital.
“Moneta isn’t over yet,” said Morris, referring to loans for other Moneta projects.
About 12 other Rocky Point creditors did not do as well. Morris said, of the $2.4 million they were collectively owed, they received only $520,000. Morris did not identify the other creditors but said they included pension funds.
Morris called the process of liquidating Rocky Point assets a “lengthy but a good experience.”
He said he also learned a lot of history, including a professional baseball game had been played at the park when professional games were usually played at team-owned parks, and that prize fights had been held at the Palladium. He concluded that, in its heyday, the park was really a big deal and a significant venue for major events. He also said he doesn’t recall ever seeing so much asphalt for parking.
“We got help from everyone,” he said of Rhode Islanders. “It was a great experience.”