Following substantial damage caused by Hurricane Katrina in 2005, the park was closed to the public to make efforts to repair and reopen it.

As a result, city officials became more diligent in securing the park and banning tourists, tasking the New Orleans Police Department with patrolling the abandoned site and arresting trespassers.

An option to demolish and clear the land was explored in 2019 following complaints from residents, which was estimated to cost the city $1.3 million.

[9] In the meantime, the city continued to generate revenue from the property by occasionally leasing the park to various production companies as a filming location.

[21] Rides included Mega Zeph, a wooden roller coaster track built on a steel frame to prevent termite infestation and withstand hurricane-force winds.

The intent was to rebuild the Zephyr, but it was a smaller roller coaster, so that idea was scrapped in favor of the current larger Mega Zeph.

However, once Katrina was forecast late on Friday, August 26, to hit New Orleans directly, the weekend reopening was canceled to prepare for the storm and begin evacuations.

On the morning of August 29, 2005, just after sunrise, Hurricane Katrina made landfall in Southeast Louisiana, resulting in 1,464 deaths and over $100 billion in damages.

The park grounds are located on a low-lying section of Eastern New Orleans, with a 6-foot (1.8 m) earthen flood berm running along the perimeter, creating an artificial basin.

After the park's drainage pumps failed during the storm, the berm retained the combination of rainwater and seawater overflow from Lake Pontchartrain caused by Katrina's massive storm surge, submerging the entire park grounds in corrosive, brackish floodwater to a depth of 4 to 7 feet (1.2 to 2.1 m) for over a month.

On July 1, 2006, having announced that the park would be closed "at least" through 2007, Six Flags announced that it had concluded its damage assessments and declared the park to be an "effective total loss"—with no desire or intent by the company to undertake the prohibitive cost of rebuilding—and was in negotiations with the City of New Orleans to make an early exit from the 75-year lease that Six Flags entered into on the property in 2002.

[31] In January 2007, Six Flags officials revealed to the New Orleans Times-Picayune that the company was suing its insurers for the remaining $17.5 million in coverage.

[32] Though the park was located in New Orleans East near some of the area's more affluent neighborhoods, the park was originally budgeted to bring in tourists from the city's downtown attractions to supplement the city's relatively smaller population base (New Orleans had been experiencing a declining population before Hurricane Katrina).

[34] Batman: The Ride was reassembled at Six Flags Fiesta Texas in San Antonio and opened under the new name Goliath on April 18, 2008.

Bayou Blaster and Sonic Slam were removed in 2008 and taken to Great Escape in Queensbury, New York, where the ride was refurbished and reopened under the name Sasquatch on May 10, 2009.

The Road Runner Express was removed in 2009 and taken to Six Flags Magic Mountain in Valencia, California, where it was refurbished and reopened on May 28, 2011, under the same name.

As late as the fall of 2009, the Six Flags website said the company was "still in the process of settling claims with its insurers due to substantial damage caused by Hurricane Katrina," adding that the park would remain closed.

The statement ended with "We know that it is still a difficult time for the residents of New Orleans and we remain committed to working with the city in support of the recovery efforts.

[48] In this series, Joo documented the abandoned or historic structures of New Orleans, which remained ten years after Hurricane Katrina.

He also documented portions of revitalization in the community of New Orleans to show how the area has been rebuilt after one of the most significant natural disasters in United States history.

The abandoned amusement park in that game features a partially flooded site, a similar entranceway, and a roller-coaster that strongly resembles the Mega Zeph.

The documentary features visuals of the park in its current state and interviews with past employees, fans, and developers interested in rebuilding the property.

[54] As of April 11, 2010, the site was still shut down with no clear future since the city of New Orleans owned the property by this time, and the plans for the Nickelodeon-branded theme park fell through three months after bonds failed to come through.

The park would be revamped to reflect Louisiana's history and heritage, with one of the proposed sections paying tribute to the now-defunct Pontchartrain Beach, which closed in 1983.

Southern Star planned to take possession of the property before the lease was established to provide preliminary security and repair/cleanup services.

The lease would not have taken effect until Southern Star had taken possession of the property, started the cleanup process, and provided proof of funding to the city.

Eight entrepreneurs stepped forward to suggest turning the property into a power plant, a theme park, or even an outlet mall.

[58] On March 6, 2012, New Orleans gave the green light to build Jazzland Outlet Mall to Provident Realty Advisors and DAG Development.

In October 2021, New Orleans Mayor LaToya Cantrell announced Bayou Phoenix as the partner chosen to redevelop the site.

[68] On August 15, 2023, the New Orleans Redevelopment Authority approved the Bayou Phoenix development proposal to move to the next phase.