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Neverland tourist attraction challenges

Marketplace Staff Jul 3, 2009
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Neverland tourist attraction challenges

Marketplace Staff Jul 3, 2009
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TEXT OF STORY

Renita Jablonski: As you may have heard already, a public memorial service for Michael Jackson is set for Tuesday morning in Los Angeles at the Staples Center. Until news of Tuesday’s service, there was a lot of talk a memorial would happen at Jackson’s former home — Neverland.

The Neverland Ranch is now in the hands of L.A. firm Colony Capital. There’s still a lot of talk about turning the property in Santa Barbara County into an attraction similar to Graceland — the home of Elvis. We’re joined now by Robert Rasmussen. He’s dean at the USC law school.
Thanks for being here.

Robert Rasmussen: Great to be here Renita.

Jablonski: The company Colony Capital, that owns the mortage to the Neverland property, do they have the right to go ahead and make this a tourist attraction?

Rasmussen: No. As with every land owner, you’re subject to zoning restrictions. I would doubt if this were zoned for business. And then you also have to worry about the traffic. If you wanted to develop the property where you had a lot of people going there all the time, you’d have to really develop the whole infrastructure around the area to handle that influx of visitors.

Jablonski: And Graceland attracts about 600,000 tourists a year.

Rasmussen: Right.

Jablonski: And the estimates on Neverland being an attraction is a lot more, something like a million I think I read in one place.

Rasmussen: It’s anybody’s guess now. It’s difficult to make projections of the future today given the intense excitement that’s been generated by the passing of Michael Jackson. What the actual demand’s going to be a year from now, two years from now, is really anyone’s guess.

Jablonski: So how would you explain the challenges here?

Rasmussen: The challenge for the handlers of the Jackson estate is that you know when you die, basically your debts are due in owing. So they owe somewhere between $400 or $500 million. They have a lot of assets. They have the Neverland Ranch, the interest in the Beatles catalog, the interest in Michael Jackson’s own catalog, and the likeness of Michael Jackson. All of these are valuable assets, but that’s all value based on money that’s coming in the future. So the challenge is how do you take this future revenue stream and find a way to use that to satisfy the current debts?

Jablonski: Have you seen anything else that parallels this sitaution?

Rasmussen: I think Michael Jackson is unique in so many levels. Even Graceland I don’t think is a good parallel in the sense that at least Graceland we always knew that was Elvis’s house, that’s where Elvis would retreat to, that’s where Elvis lived. Michael Jackson hasn’t lived in Neverland for years. Neverland I think is has a bit more checkered persona than Graceland did.

Jablonski: And of course that’s I guess part of the draw for some people.

Rasmussen: It’s part of the draw and it’s a very I think difficult decision: How are you going to maximize the value of Neverland? And remember Michael Jackson is basically a very complex business enterprise, and we’re now in a situation where that enterprise needs a restructuring. Is the family going to be able to get someone to come in and lend them new, fresh money in order to pay off their current debts?

Jablonski: Robert Rasmussen is dean of the USC Gould School of Law. Thanks so much for joining us again.

Rasmussen: Thanks Renita, it’s my pleasure.

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