San Diego to Sue SeaWorld for Failure to Pay Back Rent of Over $12 Million Today … or Maybe Tomorrow

by on September 7, 2023 · 1 comment

in Ocean Beach, San Diego

It seems we’ve been hearing for months now that San Diego will move on SeaWorld for not paying back rent and penalties of over $12 million it owes the city. And now we’re told that if SeaWorld missed its midnight deadline, the city will sue for breach of contract. Here’s the latest by U-T reporter Jennifer van Grove in Wednesday’s edition.

By Jennifer van Grove / SDU-T / Sept. 6, 2023

The city of San Diego will Thursday move forward with a breach-of-contract lawsuit against SeaWorld San Diego if the theme park fails to meet a midnight deadline to pay $12.2 million in outstanding rent and penalties, the city attorney’s office said Wednesday.

With just hours left before the city-imposed deadline, SeaWorld has yet to respond to an August notice of default, a spokesperson for City Attorney Mara Elliott’s office said.

The notice, delivered to San Diego Park President Jim Lake and SeaWorld Entertainment CEO Marc Swanson on Aug. 7, warned that the publicly traded company was in default of its lease agreement with the city and that the theme park would face litigation if the past-due sum wasn’t paid in full by Sept. 6. SeaWorld did not indicate Wednesday whether it planned to make the payment. A spokesperson cited a company policy not to comment on potential litigation. …

SeaWorld San Diego has a long-term ground lease with the city, expiring in June 2048, for 190 acres of waterfront property on Mission Bay. The company’s minimum annual rent, which is adjusted every three years, was set at $10.4 million, plus a 3 percent surcharge, for the time period in question.

At issue is nearly $8.9 million in unpaid rent for the period between Jan. 1, 2019, and April 30, 2022, as calculated by the City Treasurer’s office in a lease audit conducted last year. The outstanding sum has been compounded by nearly $3.4 million in interest charges and late fees, with interest continuing to accumulate. The city issued invoices on Oct. 24, Nov. 2 and June 30 seeking payment, but no payments have been received.

The missed payments are a hangover from the pandemic, when SeaWorld was forced to close its amusement park in response to county and state mandates. The San Diego park closed for five months between March 2020 and August 2020, and then again for two months between December 2020 to February 2021.

SeaWorld has previously said that it was not required to make its minimum rent payments during forced shutdowns, but city officials have countered that the company’s rent could be deferred but not waived. The company, like other city tenants facing financial hardship, was offered a 24-month repayment plan. …

In the report, SeaWorld said it paid $500,000 in rent in calendar year 2020, $11.1 million in rent and charges in 2021, and $13.6 million in rent and charges in 2022.

In May, San Diego City Council members authorized legal action against its long-time tenant. Elliott, the city attorney, said at the time that SeaWorld was the only city lessee to withhold pandemic-era rent payments, and that taxpayers should not have to absorb the company’s debts and liabilities.

{ 1 comment… read it below or add one }

Frank Gormlie September 11, 2023 at 10:51 am

Cannot believe that no one – not even gravitas — made a comment about the SeaWorld Barbie graphic.


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