The financial condition of the Fair was a matter of intense media debate. The promises of 70 million in attendance proved to be vastly overestimated. The World's Fair Corporation, prior to the 1965 season, operated lavishly and without heed to the consequences of a much reduced gate figure and without proper accounting controls and oversight in place. The result was that the Fair was nearly bankrupt as it entered its final season. Only a combination of reduced spending, higher admission prices and a huge influx of visitors in the waning days of the Fair reduced the loss for the 1965 season and, in turn, for the entire run of the Fair.

As the Fair went into the 1965 season, it was beset with tenants who could not operate their exhibits because they were insolvent. The Fair, nearly bankrupt on its own, was forced to bankroll major exhibits at the Fair or face the prospect of substantial numbers of padlocked and shuttered pavilions. And at the close of the Fair it faced huge write-offs in uncollectable receivables from exhibitors. This financial drain also took its toll on the Fair.

On October 26, 1967, The Office of the Comptroller of the City of New York (Mario A. Procaccino, Comptroller) issued the Third Supplemental Report on New York World's Fair 1964 -1965 Corporation Covering Operations from Inception to December 31, 1966. In excerpts from this report, a true picture of the Fair's financial difficulties at its close (and through the demolition period) can be seen:

The following is presented as a summary of the results of our examinations from inception to December 31, 1966:

1. The financial condition of the New York World's Fair 1964-1965 Corporation, as at December 31, 1966, barring any unfavorable court decision on the numerous legal actions against it, discloses that there will be barely sufficient funds available to meet its outstanding obligations.

2. The net loss resulting from the operation of the Fair amounted to $21.1 million. This is in sharp contrast with the projections released by management during the early stages when it was freely predicted that the exhibition would wind up with a surplus of over $50 million.

3. The extent to which the Fair's various service contractors were permitted by management to control the spending of funds, particularly with respect to procurement matters during the pre-opening period and the 1964 season, has been commented on before in our prior reports. It was this policy that contributed to a large degree to the loss of over $20 million during the first year of operation. That this error was not repeated in the 1965 season is indicated by the fact that the loss during this period was held down to approximately $1 million. Whereas revenues for the two years were almost the same, expenses were cut back sharply in the second year, especially in the areas of contract services by Allied Maintenance and Pinkerton's, with the result that 1965 showed a vastly improved picture. It is now clear that if some of these economies had been instituted earlier by management that the losses sustained by the Fair would have been considerably less. Expenses should have been kept more in line with revenues for it was obvious almost from the beginning that the Fair Corporation would never realize the profits indicated in its early projections.

4. The Fair was faced with the dilemma of either evicting delinquent tenants with the consequent denuding of large portions of the exhibition area, or to continue to subsidize concessionaires so as to give the appearance of full occupancy. Management chose the latter course and in a few instances the Fair chose to advance monies to insolvent firms for the same reasons. In so doing, it had to charge off as bad debts more than $6 million of accounts and loans receivable.

5. The failure of the Fair Corporation to enforce the requirements in its agreements with exhibitors and concessionaires for the posting of a bond or other security to guarantee the cost of completion and post Fair demolition of their buildings and for the payment of rent resulted in considerable additional expense and loss of revenues to the Fair Corporation.

6. In order to carry out the terms of the lease with the City with respect to the requirement to restore the park area to the satisfaction of the Commissioner of Parks, and to conserve funds therefore, it was necessary for the Fair Corporation to reach an accord with the noteholders whose remaining claim was $22,421,750 at the end of 1965. After prolonged hearings, a court approved settlement was reached for the payment of $4 million. Adding this sum to the $47,457,250 previously paid on the notes, the Fair Corporation returned about 38.4 cents on each dollar it borrowed, not including interest paid to the end of October, 1965.

Following the settlement payment of the $4,000,000, plus accrued interest, the unpaid balance of $18,421,750 remaining in the Promissory Notes account was canceled on the books of the Fair Corporation.

To remain within the limits of its remaining assets the Fair petitioned the Board of Estimate for approval of a reduction in its earlier commitment to the city in connection with post Fair restoration and general and administrative expenses by $2,737,910 thereby eliminating the recorded deficit of $21,159,660 from the Fair Corporation. The estimated cost of post Fair operations was thereby reduced from the original $11,580,000 to $8,842,090. As of December 31, 1966 the Fair had expended of this amount a total of $6,193,647.24 leaving a balance of $2,648,442.76.

7. In spite of its experience in dealing with construction contractors, the Fair found itself obligated to post a bond to guarantee payment to two demolition contractors who had been awarded lucrative contracts during the pre-opening construction period. This action forced the Fair to incur additional expenses during the post-Fair period.

8. The original estimate of post closing general and administrative expenses amounted to approximately $1.4 million. However, when it became apparent that the Fair Corporation would be unable to complete its post-Fair demolition and restoration work within four months after closing the exhibition period on October 17, 1965, as required under the lease agreement, the extension of the post-Fair period to December 31, 1967 required an upward revision of post-Fair general and administrative expenses to $4.3 million, a three fold increase of the original estimate for this category of expense.

9. Since the Fair Corporation wound up its operations without sufficient funds to complete the park restoration program originally planned, the Triborough Bridge and Tunnel Authority appropriated over $6 million for additional park work including a zoo, ballfields, picnic areas and general landscaping in various areas of the restored park.

10. The New York City expenditures for facilities and improvements to be retained post-Fair were as follows:

11. Estimated cost of Exhibitors Structures to remain post-Fair are as follows:

12. Although the Fair Corporation has been named as defendant in numerous legal actions involving approximately $14 million, it is management's and also the Fair's general counsel's opinion that the Corporation has valid legal and equitable defenses to these suits.

No provision appears to have been made in the post-Fair estimates of wind-up costs other than a sum of $367,000 identified as "Close out and Final Litigation."

30,691,720

$57,090,388.45

 18,021,802.80

 $39,068,585.65

 14,344,163

 18,279,192.75

 16,347,557

$20,789,392.90

9,794,225

17,270,647.49

816,252

217,008.53

26,928,034

$38,277,048.92

$03,212,017.69

18,593,632.42

2,218,015.60

874,340.39

172,972.03

100.250.00

8,073.05

136,338.09

54,419.51

$025,369,958.78

$00,0558,937.87

38,230.40

 90,100.00

 $00,687,268.29

$064,334,275.97

16,879,599

$22,676,049.79

10,196,730

20,284,210.86

598,033

146,102.58

27,674,362

$43,106,363.23

16,347,557

14,067,353

30,414,910

2,812,246 

 33,227,156

$02,938,680.82

15,175,949.59

2,393,410.81

534,423.05

48,748.04

315.70

7,147.68

35,167.45

$021,133,843.14

8,727.07 

$00,096,552.63

$064,336,759.00

64,334,275.97

$128,671,034.97

The open accounts receivable at December 31, 1965 totaled $5,162,012.19.

The balance in these accounts covered the amounts owed the Fair Corporation for ground and concession rents, as well as charges for water, electrical usage, service connection fees and various other services provided to exhibitors.

...it should be observed that fully eighty-four cents of every dollar outstanding was considered doubtful of collection at December 31, 1965. The year before the estimate had been only sixty-nine cents of each dollar remaining unpaid.

The main reason for this large loss on accounts receivable was that many concessionaires were permitted to continue operating even after the Fair Corporation knew that the tenants could not meet their obligations.

$0,036,304.98

$0,028,178.09

5,113.89

5,113.89

11,592.23

11,592.23

249,563.02

219,563.02

17,436.12

16,267.95

61,179.36

61.179.36

49,609.32

49,609.32

39,847.89

39,847.89

37,839.25

37,839.25

5,683.64

5,683.64

51,414.54

51,250.00

98,090.90

97,283.81

271,021.49

271,021.49

330,870.80

330,845.80

331,255.74

331,255.74

56,744.45

53.534.36

19,301.72

16,591.12

10,690.87

5,690.87

295,780.94

255,681.23

31,778.20

12,540.49

538,414.07

538,414.07

27,646.89

27,646.89

38,646.34

36,146.34

248,330.33

242,330.33

145,607.78

145,607.78

38,294.36

24,667.15

11,529.33

4,529.33

22,792.39

22,792.39

Total

At the close of 1965, the balance in this account was $3,001,273.95. This amount was owed to the Fair Corporation by several exhibitors who had been advanced varying sums when they ran into financial difficulties and had to be assisted either to complete their pavilions or to remain in business.

During 1965 some collections were made from the Belgian Village and Pavilion Property, Inc. which reduced somewhat their outstanding balances. As to Pavilion of American Interiors, its debt increased during 1965 by $50,000.00 when the Fair had to make payment, as guarantor, on a note executed by the exhibitor with the First National City Bank.

Although remaining loans receivable are considered totally worthless, the Fair's legal counsel stated that the accounts have been left on the books because of litigation involving these accounts and the Fair.

$0,812,617.29

$0,800,350.46

1,348,275.77

1,348,275.77

 450,000.00

 450,000.00

390,380.89

Total

$3,001,273.95

$2,598,626.23

The Fair Corporation's failure to enforce the demolition security deposit requirements under the lease agreements with exhibitors resulted in additional expense for the Fair since many exhibitors defaulted on their obligation to demolish their pavilions. The cost of demolition, consequently had to be borne by the Fair without, in most cases, any chance for recovery of such a cost from the parties involved.

The full amount owed [to the Fair Corporation] by the Better Living Pavilion on December 31, 1965 was ... $516,299.33. Furthermore, it appeared ... that the group in control of the concession would also abandon its building and leave the demolition to the Fair Corporation. The early estimates were that this would necessitate an additional expenditure of $600,000.00 by the Fair for demolition. On January 14, 1966, however, the Fair Corporation concluded an agreement with Better Living Associates in which the latter agreed to demolish its own structure and, in addition, to pay the sum of $200,000.00 as settlement in full of its debt. The $200,000.00 was thus received by the Fair and the difference written off to the reserve for bad debts.

90,000.00

10,000.00

3,000.00

5,500.00

2,480.00

2,300.00

79,020.00

3,500.00

8,200.00

1,900.00

2,800.00

32,000.00

42,000.00

1,000.00

6,500.00

12,000.00

13,349.00

9,349.00

4,349.00

6,349.00

7,349.00

1,349.00

2,349.00

6,500.00

5,400.00

63,000.00

8,900.00

14,800.00

10,300.00

20,000.00

7,500.00

10,400.00

$0,565,643.00

The amount of $175,251.23 set up as a liability to Greyhound at the Fair represents one-half of the accounts receivable in the amount of $350,502.46 as rent due the Fair from the International Cable Ride Corp. (Swiss Sky Ride).

Greyhound at the Fair had obtained exclusive transportation and sightseeing rights under its agreement with the World's Fair Corporation to operate as the transportation and sightseeing concessionaire on the Fair grounds. Therefore in order to get the Swiss Sky ride and the Monorail Ride as concessions to operate on the Fair grounds, the Fair Corporation had to include the Greyhound Corp. as a participant to share in the rental income collected by the Fair from the two amusement rides. Under the terms of a subsidiary agreement between the Fair Corporation and Greyhound at the Fair Inc. the latter would receive 25% of the Fair's share of rental received from the Monorail ride and 50% of the rental received from the Swiss Sky Ride. However, the Swiss Sky Ride operators have refused to pay the Fair the amount of $350,502.46, claiming that the Fair Corporation had already received the maximum amount in rental called for by the rental agreement. The Swiss Sky Ride operators have placed the $350,502.46 in Escrow until settlement of its lawsuit against the Fair.

High Tension Electrical Conversion

Conversion of the electrical system to Park Department requirements.

Alterations to Permanent Park Pools

Installation of permanent lighting and water effects in decorative pools at Unisphere site. United States Steel Corporation contributed $100,000.00 toward the cost of the lighting and other work.

Reconditioning of Swimming Pool

Rehabilitation of the swimming pool for public use at the Amphitheater.

Reconditioning of Buildings

Reconditioning of the former Singer Bowl and other buildings for permanent park use.

Pitch-Putt Gold Course

Construction of an 18 hole pitch and putt golf course and starter house and equipment

Holly Planting and Landscaping

Mainly in Unisphere area and at Exedra at former Vatican Pavilion site.

Flushing Meadow Park Restoration

General repairs to pavement, lighting system and overall landscaping

Sale of Street Lighting Equipment

Cable Salvage

United States Steel Corp - Donation - Lighting at Unisphere Site

Other Credits - Net