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Newsmaker: Herbert Brill / Conneaut Lake park trustee banking on stock offering

Monday, August 13, 2001

By Milan Simonich, Post-Gazette Staff Writer

CONNEAUT LAKE, Pa. -- Thieves and bad management almost killed the 109-year-old amusement park on the waterfront here.

Herbert Brill, the court-appointed trustee overseeing Conneaut Lake Community Park, hopes to revive the park through a public stock offering. "We don't have a nickel of working capital, "he said. (Annie O'Neill, Post-Gazette)

Now Herbert Brill hopes to revive Conneaut Lake Community Park through a public stock offering.

Brill, the park's court-appointed trustee, says lining up stockholders may be the last hope for saving a place that has great sentimental and economic value to Crawford County residents.

At first glance, the park appears to be humming along this summer as a nonprofit community enterprise. Its Blue Streak roller coaster is flying high, and crowds are filling up the park, especially on weekends.

But Brill, 67, said all is not well.

A retired lawyer who spent much of his career working for developers and corporate clients from New York to Florida, he knows a shaky business when he sees one. Conneaut Lake park is just that.

"We don't have a nickel of working capital," he said last week.

Brill said the park 90 miles north of Pittsburgh can turn a consistent profit, but it first needs to make improvements to its amusements, hotel and concession operations.

Even though it saw 40 percent of its June dates washed away by rain, the park made more than $167,000 during the first six weeks of its season, from Memorial Day through July 11. For the year, though, it reported a loss of $200,353.

The figures were listed in Brill's report to Crawford County Common Pleas Judge Anthony Vardaro, who is overseeing the park's management since it was turned into a community enterprise a year ago.

Heavy off-season maintenance expenses and bills left over from previous operators accounted for the continuing financial problems.

Two of the park's past three private owners went bankrupt. The third, Gary Harris, was sentenced to 27 months in prison for federal tax evasion in an Ohio case.

Brill found a business in disarray when he took over as the park's trustee in February. For instance, he said, it didn't have a single working cash register. That meant nobody had an accurate means of tracking sales.

"Theft was rampant," he said.

The fundamental flaws that plagued the business have been patched up. Brill installed modern cash registers, added two new rides and climbing walls, and spent $60,000 to repair the Sky Ranger ride. One of the park's top draws, the Sky Ranger had been idle for four years.

Much more must be done. That's where the stock sale would come in.

Brill said the venture can give Conneaut Lake park long-term profitability by providing enough money up front to fix its myriad problems.

Under his plan, which is subject to the judge's approval, stock in the park would be offered to Pennsylvania residents. Investors might see their dividends tied to the park's economic growth, which Brill said could be decent if the operation is run well.

The price of the stock and the precise workings of the sale still have to be determined. Brill said he is certain, though, that the offering will be made no later than next spring and that it would be limited to Pennsylvania residents. This would allow the deal to move ahead much more quickly than a national offering regulated by the Securities and Exchange Commission.

"The stock sale is not just a possibility," Brill said. "It's really much more of a probability."

As the park exists now, it is only a shell of what it could be.

This summer, Brill had to close about 30 of the park hotel's 120 rooms. With their rusty sinks and general disrepair, they were not fit to be rented.

But the hotel, Brill said, could be a wonderful draw. He calls it the kind of place that F. Scott Fitzgerald wrote about in "The Great Gatsby." To him, the whole park has the flavor of a diversion from the 1930s.

Brill became the park's trustee by happenstance. He moved to Crawford County about 18 months ago, when his wife took an administrative job at Allegheny College in Meadville.

At a party one night, Brill met the previous park trustee, Bill Jorden. Jorden planned to run for a judgeship, so he needed somebody with business expertise to take on the job of trying to keep alive Conneaut Lake park. Brill seemed to have the right mix of experience and energy.

He was teaching a couple of business courses at Allegheny College, but he had time on his hands. Brill said he thought a practical try at economic development might be fun.

"How often does a guy my age get the chance to make a go of an amusement park?" he said.

The problems he found were enormous. So were some of the bills he inherited.

For one, Jorden billed the park about $100,000 for services provided by him and his law firm.

He charged about $25,000, or $100 an hour, for his work as trustee. Jorden also hired his law firm to represent him in park matters. That led to another $75,000 in billings.

The judge will decide how much money Jorden will get. Brill, who is being paid a flat rate of $36,000 a year as trustee, said he did not believe anyone in the trustee's job should be able to bill by the hour.

Another adversary for Brill is former park operator Harris. From his prison cell, Harris is claiming that he still owns the park's rides and leases on parts of its real estate. He is suing to reclaim what he says is his.

Harris' lawyer, Craig Markham, said Conneaut Lake park probably would have folded in the 1990s had Harris not rescued it from a bankruptcy.

"He's an easy target because of the [tax-evasion] activities that put him in prison," Markham said. "But here's a guy who pulled the park out of bankruptcy and provided it with real estate worth millions."

For a time, Harris was a hero to many in Crawford County. Brill would be regarded the same way if the stock sale he envisions can help turn the long-suffering attraction into a money-making business.

The odds seem to be against him.

"This custodian is running things just by the skin of his teeth," Markham said of Brill.

Brill knows it's true, but he also said that could change. He said saving the park is a priority for the whole community.

When the park was shut down for parts of 1995 and 1996 after a private operator went bankrupt, shop owners reported sales declines of 40 percent.

"Everybody around here has good memories of the park," Brill said. "But we can't pay the bills on good memories."



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