Following Gualandi's death in 1988, Leach became involved in several controversies that brought greater scrutiny upon the Waterloo Foundation for the Arts. The most controversial was the so-called "land swap" that allowed
BASF corporation to build a large corporate headquarters on land that had once been part of
Allamuchy Mountain State Park. The Waterloo
board of directors subsequently brought in a new management team and throughout the mid-to-late 1990s tried to rebuild trust in the running of the village. In 1995, a concert-goer died at a
Phish concert that had attracted 30,000 people even though only 18,000 tickets were sold. Events like this had completely overwhelmed the area's limited access roads and caused considerable friction with the surrounding towns. The foundation began downsizing the concerts around this time. In the period from 2003 to 2006, the Waterloo Foundation for the Arts had received $900,000 from the
State of New Jersey for general expenses, along with more than $300,000 since 2000 to cover repairs. As the state showed increasing displeasure with the village's operation, the $250,000 the group had expected to receive, which would have been used towards the $2 million operating budget for the site, was cut from the 2007 state budget. Waterloo Village was shut down in December 2006, except for the privately owned Waterloo United Methodist Church, which has a small but dedicated congregation and continues to operate as it has for over 150 years. In the period beginning in 2006, the Village was only open intermittently. Percy Leach died in 2007 leaving the organization's future uncertain. ==Reopening==