Another Carousel to save!
I have been on the board of the National Carousel Association barely a
few months when a major crisis has arisen (no connection, of course!).
The Broadway Flying Horses, a Seaport Village (San Diego, CA) landmark
for over 25 years and one of the oldest carousels still operating, is
in danger. Norton has gotten his hooks into it, and that usually
spells bad news for all concerned except for Norton and the dealers.
Background information, as reported in a recent article in the San
Diego Union-Tribune, is as follows:
"The carousel is part of a family trust established by the late
Morris Taubman, developer of Seaport Village. The Santa Monica
branch of U.S. Bank is trustee of the trust, and bank officials
decided to sell the carousel to pay taxes and provide a cash infusion
to the trust."
But bank officials are under the mistaken impression that the carousel
auction will "infuse" $800,000 to the trust (minus commission). The
fact is, this carousel -- a very nice Looff with a beautiful Bruder
organ and a recently refurbished mechanism -- will likely fetch about
half of the amount promised. Our greatest fear is that the dealers
will pool their interests, as they usually do at carousel auctions to
keep the prices low, and in this case, form a consortium and bid as
a unit, since the carousel purportedly is being sold only as a unit
in one lot.
The best and most recent valuation precedent for the San Diego machine
would be the Whalom Park carousel auction in April of 2000, in which
I have a personal stake. In this case, a park in financial difficulty
was forced by a local bank (Why are the banks always behind these
things?) to sell its carousel on short notice. Norton was brought in
and assured all concerned that this was a treasure and park officials
were given the impression that it would fetch around $850,000. It
brought only about $457,000 and the park netted only $411,000.
This machine was also a similar age Looff with many similar animals,
but it had a number of high-priced rare animals which the San Diego
machine lacks. But the San Diego machine is in much nicer condition
and comes along with that nice Bruder organ, so we expect that the
final price will come in about the same.
At this point, with an April 17 auction date approaching, we need
preservation-oriented carousel and organ aficionados to put pressure
on US Bank. Please consider helping us by writing to US Bank, and by
writing a letter to the San Diego area newspapers. We believe that
the bank is breaching its fiduciary duty to the trust beneficiaries
by making a decision to sell a trust asset based on an artificially
inflated value which will not be realized at the sale.
Perhaps replacing the carousel with $800,000 cash is a good move for
the trust, and that may be the basis for the decision to sell. But if
only $400,000 comes in, it may be impossible, with the smaller amount
of principal, to replace the trust income currently provided by the
US Bank is also being a bad corporate citizen. We believe that the
bank should hear from the public on this issue, since the bank's
goodwill is at stake and it would be better if they see that before the
damage is done. If the auction brings in a low price and results in
the carousel being taken out, it would result in potential liability
by the bank to the trust for causing a loss in trust value, and also
a public backlash of negative publicity. We'd like to see the carousel
remain intact, and preferably where it is, whether it is sold or not,
and that would benefit both bank and trust and public alike.
The contact person referred to in the article is John Davidson. He is
referred to as "the bank-appointed interim overseer" of the carousel.
The address I have for him is
1601 Cloverfield Blvd, Suite 3060
Santa Monica, CA 90404
Please feel free to contact me if I can provide any further
information, and please pass this information along to like-minded
friends who may not see it here.
Mark S. Chester