Rocky Point Amusement Park; Warwick Neck, Rhode Island

An aerial view of the former Rocky Point Amusement Park, on Warwick Neck, where the U.S. Small Business Administration hopes to recoup nearly $14 million in bad loans and other costs by acquiring the property's deed. The site is scheduled for auction July 29, but the SBA is confident that prospective bidders will be deterred by a thicket of city planning and zoning restrictions.

The beloved amusement park, closed since 1995, is likely to be deeded to the Small Business Administration, which could sell most of the property to a developer.

WARWICK -- For sale: amusement park, a little old and run down, but with character. Great residential development opportunity. If you've got more than, say, $10 million lying around, it could be yours.

The former Rocky Point Amusement Park will be up for auction on July 29, but while there are many interested developers, the chances are slim that the valuable property will be sold.

In fact, government officials say they doubt that anyone will bid on the 123-acre property, and they expect the deed will fall to the Small Business Administration, which administers the park in its role as court-appointed receiver for former owner Moneta Capital Corp.

The SBA would own the property in return for nearly $14 million it has lost in unrecovered loans and other costs over the last few years -- pending U.S. Bankruptcy Court approval. The SBA would then be able to negotiate privately with developers looking to acquire the former amusement park on Warwick Neck, probably for residential development.

There's still a chance, however, that a prospective buyer could come to the auction, raise a placard, and take home Rocky Point.

"There are clearly parties interested, but I think it's a little unlikely that anybody steps forward," said Mark Hayward, district director for the SBA.

The demands of the City of Warwick and a thicket of planning and zoning problems make a sale unlikely on the 29th.

First, the city plans to make any project conditional on the developer's deeding much of Rocky Point's beach and dock areas to the city to be turned into park land. Second, the park is a patchwork of different zoning classifications that need to be consolidated before any work could be done.

Mayor Scott Avedisian said developers are loath to buy first and hash out those details later, especially when they could wait and negotiate an all-inclusive deal with the SBA and the city.

"We've been going along with the assumption that after the auction, SBA will have total control of the property," Avedisian said.

City Councilman Carlo E. Pisaturo Jr. said that he has spoken to a number of interested developers, and they have all been amenable to the idea of deeding land to the city, if the city made certain zoning changes at the property.

"Whatever developer comes in to do anything with Rocky Point will have to come before the council," said Pisaturo, who represents Warwick Neck.

Pisaturo and others interviewed in the last two days said they had heard proposals from many developers over the years, but only a few remain serious contenders. They would not identify the developers involved in current discussions.

THE CITY'S GOAL of acquiring shoreline property got a shot in the arm this week when Sen. Jack Reed announced that he had secured $1.8 million for Warwick for that purpose. If and when a developer buys Rocky Point, the city could use the money to buy land in addition to, or in lieu of, what the developer might donate.

Avedisian said he is exploring the conditions for using that money, and whether matching funds from the city are needed.

The auction will be held at the park, at 10 a.m. on Tuesday, July 29. The advertisement states that all improvements, including the "world famous shore dining hall and cliff house with panoramic views of Narragansett Bay" would be included in the sale. A $100,000 down payment is required.

ROCKY POINT went out of business in 1995. Most of the rides and attractions were sold off to parks around the country in 1996. The remaining buildings are in poor condition, but the view of Narragansett Bay is second to none, and the SBA believes it is the largest developable property on the bay.

Rocky Point has been up for auction before, but SBA ownership has been a possibility only recently. A decision in Bankruptcy Court this spring allowing an SBA takeover if no developer bids on the property makes it likely that this auction will be Rocky Point's last.

Tom Morris, director of the SBA's Office of Liquidation, said this is a moment the agency has been anticipating for some time, a final step before negotiating a possible sale.

In other attempts to sell Rocky Point in the last four years, the minimum bid was set at $10 million. But until this January, potential buyers faced another hurdle: a daunting list of unpaid property taxes and water bills. The SBA settled with the city for more than $1 million, clearing the way for a sale. The taxes since January remain unpaid.

Neither the SBA nor the city has set any conditions on the type of development they want to see at Rocky Point. Most proposals are for residential developments of various densities, but others range from retail and office space to an aquarium, Avedisian said.