A settlement has been reached over the lease for the former Six Flags New Orleans site - paving the way for a $165 million Nickelodeon theme park to replace it.
Six Flags New Orleans closed after Hurricane Katrina in August 2005 and has never reopened. Parent company Six Flags filed for bankruptcy protection in June, and has now reached an agreement with the city of New Orleans to terminate the remainder of its lease.
Following the deal, there are plans for Southern Star Amusements (a startup company) to take over the site and construct the Nickelodeon park. The group has apparently struck a licensing agreement with Viacom's Nickelodeon to use its characters in the park, though no opening date or construction timetable has yet been announced. Of the $165 million needed, $100 million is set to be raised via Gulf Opportunity bonds, which are designed to encourage rebuilding of Katrina-hit areas.
The deal will help Six Flags as it strives to reduce its $2.4 billion debt mountain. The company's lease for the New Orleans site was set to run until 2017, at a cost of $1.4 million a year. To escape the lease, it will pay the city of New Orleans $3 million upfront, along with 25 percent of any insurance proceeds it receives for Katrina damage above $65 million.