Koch family pulls out of Kentucky Kingdom deal

What a wild ride this has been ... for taxpayers!

(Editor’s note: This post was updated at 6:15 p.m. on June 15.)

What does Insider Louisville always say about bad news: Put it out on a Friday afternoon and the public never notices?

Not this time.

The Koch family who owns Holiday World amusement park up in Santa Claus, Ind. just announced they’re withdrawing their $15.6 million proposal to convert Kentucky Kingdom amusement park into Bluegrass Boardwalk.

In a news release, Natalie Koch states that, oops, the family woke up and realized they’d only be leasing the park (we, the people of the Commonwealth own it) and their business model demands they own amusement parks.

Bizarrely, the announcement comes just two days after Kentucky economic development officials approved Bluegrass Boardwalk for $3.9 million in incentives!

Koch family spokeswoman Paula Werne declined a follow-up interview. But Werne replied in an email that Natalie Koch would be available for interviews at Holiday World tomorrow.

Amanda Storment, spokeswoman for the Kentucky State Fair Board, which controls the 60-acre property adjacent to the Kentucky State Fair Grounds just south of downtown, did not return calls for comment.

We – the media – will be dissecting this deal gone wrong for the next week. All this comes after Ed Hart, who developed Kentucky Kingdom into Louisville’s No. 1 tourist attraction, was shut out by Gov. Steve Beshear and the Kentucky General Assembly, led by Rep. Larry Clark.

Hart proposed a $50 million revival of the park – closed since 2010 – in a deal that would have included the state issuing $20 million in bonds.

Last week, Hart told Insider Louisville that should the Koch deal blow up, it could cost Kentucky taxpayers as much as $70 million.

In a brief interview this evening, Hart declined to comment on whether he would come back with a new proposal: “I’m just trying to absorb all this.”

Hart added that he was not surprised by the Kochs’ withdrawal:

“Not at all. We predicted this from the beginning. (The Koch proposal) was only a defensive move to protect Holiday World.”

Hart added he believed there were always only three possible outcomes with the Koch proposal because the Kochs were – with a reopened Louisville theme park – creating their own competition since Holiday World is only 80 miles from Louisville.

“The best outcome (for Holiday World) was that Kentucky Kingdom never reopen. The second best outcome for them is that they open it as a small water park that didn’t compete with Holiday World. The third best outcome was that they have a long, drawn-out process with the Fair Board.”

Hart said the Kochs succeeded at the third, in his opinion: “(Bluegrass Boardwalk) wouldn’t have opened till 2014. Now, nothing can open for years after that! They bought themselves at least three years.

“That’s worth millions of dollars to them.”

So, here’s the announcement in full:

(June 15, 2012) Louisville, Kentucky —Following nine months of planning to reopen Louisville’s shuttered amusement park, Bluegrass Boardwalk, Inc. today withdrew from the project.

“We entered into this discussion last October with full expectation of leasing the park,” says Bluegrass Boardwalk CEO Natalie Koch. “However, we have come to the realization that leasing a park rather than owning it would take us too far from the business model my family has followed for more than 60 years.”

Koch says she and her partners were financially prepared to meet the challenge of reopening the abandoned park, however the many layers of governmental regulations and stipulations ultimately caused them to withdraw.

Koch says she and her partners believe reopening the Louisville park is still a worthwhile project and they wish the future operator well.

“It’s been a lifelong dream for my family to operate a second park,” says Koch, whose family owns and operates Holiday World in Santa Claus, Indiana. “It’s hard to walk away from what we believed was a winning partnership for Kentucky and our team. But at the end of the day, the terms of the project did not fit our business model. It was time to withdraw.”

A letter terminating the proposed lease agreement was delivered to the Kentucky State Fair Board this afternoon.

Here’s the back story on Kentucky Kingdom: In 1989, Ed Hart took over the failing Kentucky Kingdom amusement park, which began as an extension of the Kentucky State Fair. At its peak under Hart in 1998, Kentucky Kingdom drew about 1.8 million visitors. Kentucky Kingdom later was sold to Premier Parks, which became the Six Flags Entertainment Corp. chain of amusement parks, based in Grand Prairie, Texas. Six Flags Entertainment went through Chapter 11 reorganization in 2009. In February 2010, Six Flags officials announced they wouldn’t reopen the park after a lease dispute with the Kentucky State Fair Board, which owns much of the property.