Is it the End of the Line for the New York Wheel?
Staten Island's long-awaited New York Wheel is no longer back on track, and the project may soon be abandoned for good. The massive NYC observation wheel, which has been plagued by problems from the start, is facing closure as the main investors say that they are ready to cut their losses and pull out of the project. According to a report in the Wall Street Journal, Jeffrey Feil and Lloyd Goldman, the lead partners in the project, are considering abandoning the Wheel as they have been denied their tax-exempt bond request. After months of negotiations, the New York City Economic Development Corporation rejected the developer’s request for support for the project in the form of a $380-million Municipal Revenue tax-exempt bond. The City said that they felt the risk involved to finish the Wheel was too great and stated that public funds are “too scarce and valuable to be leveraged for this venture.”
However, a comment written by the executive editor of Staten Island Advance, Brian J. Laline, explained that these so-called PILOT (Payments in Lieu of Taxes) bonds are not guaranteed by the city or financed by them. The city simply acts as the mediator, and the bonds, which are free of city, state and federal taxes are insured by the investors so minimizing the risk. So, even if riders on the wheel do not generate enough cash to cover the bonds the insurance will cover it, meaning there is no financial obligation or risk for the City. The original estimated cost of the project was $450 million, but the long delays due to walkouts, legal battles, and lawsuits with the original contractor who went bankrupt, has cost all of that $450 million, and to finish the project a similar amount will be required.
If the project somehow is completed, the New York Wheel will become the largest Ferris wheel in the world standing 630 feet tall. It would be located on public land on the St. George waterfront of Staten Island. It was expected to generate 500 permanent jobs and investors are also committed to building a $5 million dock as well as other facilities which could be enjoyed for free by visitors. New ferry terminals and routes would help to transport the 3 million visitors needed each year for the project to break even. Initially, there was great enthusiasm about the prospect of increased tourism in the area, and the Staten Island waterfront suddenly became an interesting investment prospect. Several major projects such as Lighthouse Point, and Empire Outlets, began development, and the future of these projects is uncertain if funding is not obtained for the Wheel.
Currently, the massive concrete bases for the Wheel are in place and 93-percent of the wheel parts are built. Many of these are spread through six different countries around the world, while others are in a Brooklyn warehouse. The next few weeks are crucial for the future of the Wheel as court deadlines have been set which will determine the future of the existing parts, and the entire project. If the backing is not forthcoming, the original contractor, Dutch-based Mammoet-Starneth will auction off the existing parts. However, there is still time and hope that funding will be achieved and that a new company, possibly, according to SI Live, the American Bridge Company, who built the Las Vegas High Roller, will be signed up to complete the project.