Divorce, Irvine Style : Wrecking Ball Poised Over Meadows, Water Park

It has been described as one of Orange County’s longest and most contentious marriages. Small wonder that a wrecking ball may figure in the breakup.

For the better part of three decades, Harry Shuster, the South African-reared businessman and founder of the defunct Lion Country Safari wild animal park, has feuded with his landlord, Irvine Co., over Shuster’s attempts to turn a profit on 300 acres of prime land near the intersection of the Santa Ana and San Diego freeways.

To hear Shuster tell it, he’s a scrappy David who has dared to go toe-to-toe with Orange County’s development leviathan, which has used its considerable muscle to frustrate him at every turn.

Armed with a tenacious attorney and plenty of chutzpah, Shuster saw his crowning achievement by landing the $10-million Irvine Meadows Amphitheatre and the neighboring Wild Rivers water park over the objections of Irvine Co. Those subtenants have provided Shuster’s United Leisure Corp. with the lion’s share of its revenue since the animal park went belly up in 1984.

Now, in what can be interpreted as either a fit of pique or a steely negotiating strategy, Shuster is threatening to tear down the very facilities he fought so hard to attract.

That is, unless Irvine Co. pays him to go away quietly when his master lease expires Feb. 28.

“We deserve to be compensated for the value of the improvements,” Shuster, chairman, president and chief executive of publicly held United Leisure, said in a recent interview from his Los Angeles offices. “They will not get them for free.”

It is vintage Shuster and just a taste of the bad blood that has flowed between tenant and landlord over the course of their 29-year lease.

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Although some longtime observers quietly admire Shuster for his feistiness, few believe he can or will make good on his threats, given the latest explosion of legal action triggered by his saber rattling. Even his tough-talking attorney says the businessman would rather cut a deal than fire up the bulldozer.

But Irvine Co. executives, clearly irked by the 11th-hour maneuvering, appear to be in no mood to offer a generous parting gift to a tenant some view as an opportunistic gadfly.

“It would be crazy for us to give in to his mind-boggling, spiteful threats,” Irvine Co. spokesman Larry Thomas said. “The wrecking ball is now in his court.”

The battle of egos has some observers shaking their heads at the high-stakes standoff, and bracing for the worst.

“It’s like a nasty divorce where they are using the children to spite each other,” said Mike Ward, an Irvine city councilman and former mayor.

It wasn’t always this way.

When Shuster arrived from South Africa in the late 1960s, the theme park industry was in the midst of a building binge. The time appeared ripe for a project the likes of which Americans hadn’t seen before: a drive-through preserve where tourists could view free-roaming wild animals from the safety of their vehicles.

Shuster’s investment group eventually struck a lease deal with Irvine Co. for 500 acres near the juncture of the Santa Ana and San Diego freeways in Irvine.

Convinced that Lion Country Safari was going to be “the next Disneyland,” Shuster says, he pushed for a 55-year lease, but Irvine Co. was only prepared to go 29 years with the newcomers.

That, Shuster says, led to the insertion of a clause allowing his company to remove any improvements when the lease expired, as long as the company wasn’t in default on any terms of the master lease agreement.

“It was an insurance policy to ensure good-faith negotiations” for compensation or a lease extension, said Shuster, 61. “I didn’t want to find myself in the position of handing them the keys to my Disneyland.”

Fantasyland is more like it, according to Irvine Co. attorneys, who say there was never any assurance, written or otherwise, that Irvine Co. would negotiate to extend Shuster’s lease.

Something Shuster and his landlord do agree on is that the relationship was cordial, at least in the early going.

The animal park was a sensation when it opened in June 1970, drawing a million visitors in its first season.

But the energy crisis, soaring operating costs and fickle tourists soon threw the park into the red. Shuster says Irvine Co. was gracious, taking back 200 acres of vacant ground and renegotiating the lease to make it easier for Lion Country to pay its bills.

That warm cooperation turned chilly when an investor group that included Donald L. Bren took charge of the company in late 1977, Shuster says. The new landlords rebuffed at least three deals that would have brought new money, amusements and theme-park-style attractions to the animal park.

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“They threw up one roadblock after another . . . because they wanted us off the property,” Shuster said.

Irvine Co. executives dismiss those claims as nonsense and counter that many of Shuster’s plans simply weren’t uses allowed under his master lease.

Push came to shove around 1979, when Lion Country sued Irvine Co. for interfering with its attempts to draw new business and investors onto the property. That suit was later dropped in exchange for Irvine Co. consenting to the construction of the Irvine Meadows Amphitheatre, which opened in 1981.

But a flurry of similar litigation erupted in 1986 and ‘87, when the company threw up hurdles to the opening of the Wild Rivers water park. The attraction eventually opened, but the upshot was a 1993 trial in which a jury awarded Lion Country, which by then had changed its name to United Leisure, $42 million in damages.

The company never collected, however, because the following year a judge ordered a new trial. United Leisure’s appeal to that ruling is pending.

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The biggest potential losers in the current dispute undoubtedly are the owners of Irvine Meadows and Wild Rivers. They face the prospect of watching Shuster tear down multimillion-dollar facilities and profitable businesses he didn’t contribute a dime to develop.

Both have filed suit to stop him. They claim United Leisure owes rent to Irvine Co., putting it in default on its master lease agreement and thus disqualifying it from removing the improvements.

Shuster’s attorney denies the claims. He says the subtenants knew that their projects might not live beyond February and that they factored that time period into their calculations in making the decision to build in the first place.

Although an Orange County Superior Court judge refused this month to grant an injunction preventing United Leisure from pursuing permits and forging ahead with its demolition strategy, nearly everyone involved acknowledges that just about anything could happen.

“We’re looking at all our options,” Irvine Meadows attorney Ronald Brown said. “We’re still in the early rounds.”

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Leisure and Its Lease

United Leisure Corp. and its landlord, the Irvine Co., are embroiled in a major dispute over United’s lease agreement and its right to demolish two recreational facilities on the land. Here are the claims made by both as well as by owners of the Irvine Meadows Amphitheatre and Wild Rivers water park:

United Leisure Corp.

* Says it has lease agreement allowing demolition of amphitheater, water park and other improvements when master lease expires Feb. 27. Says it is in compliance with all lease terms, giving it a green light to proceed with demolition if it chooses.

* Argues that clause was designed as a deterrent to prevent Irvine Co. from getting, for free, improvements that United Leisure battled Irvine Co. to put on the property in the first place.

* If improvements remain, United Leisure wants compensation from the Irvine Co. for leaving behind two profitable tenants.

Irvine Co.

* Concurs United Leisure has right to remove improvements, but only in compliance with all terms of master lease.

* Says United Leisure owes back rent and therefore is in default and not entitled to remove structures.

* Claims it never agreed to negotiate lease extension with United Leisure.

* Points to judge’s ruling last year indicating there is nothing in the lease agreement requiring the Irvine Co. to compensate United Leisure for improvements left on the property.

Amphitheater and water park owners

* Claim United Leisure has no right to demolish structures because it is in default on master lease with Irvine Co.

* Say United Leisure transferred right of removal as part of their sublease agreements.

* Both have already negotiated lease extensions with the Irvine Co.

Source: Times reports