The site, located on the shore next the northern end of the Sydney Harbour Bridge was in 1806 part of a farm. But in 1924 the site was taken over by large workshops and equipment used to build the Sydney Harbour Bridge. However in the early 30s a gentleman named Herman Phillips turned the area into first version of Luna Park.
Opened in 1935, the new park was based on the park of the same name at Coney Island, New York and mimicked earlier editions in Australia set up in Melbourne (1912) and Glenelg in Adelaide (1930).
During WWII it was a popular date destination particularly for servicemen, despite the neon lights having to be dimmed as to not draw enemy attention. The popularity among servicemen drew prostitutes to the area and fights were common place, especially between American troops and local servicemen.
The park operated for over 40 years until tragedy struck. Sadly there was a fire on the Ghost Train ride which killed 5 children and 1 adult in 1979 which caused the park to be closed. New owners took over the lease and replaced many of the older rides with new rides, opening the park again in 1982.
The park closed again in 1988 due to safety concerns and after major restorations it reopened in 1995 with more new rides including the Big Dipper (2nd edition). However locals complained about the noise from this particular ride causing operating hours to be reduced. The Big Dipper was later sold to Dreamworld in Queensland.
The park yet again went into administration in 1996. After several years and law changes to allow for the site to be used as a multipurpose venue the park reopened in 2004 and was listed on the State Heritage list in 2010.
http://www.lunaparksydney.com/history, retrieved 1 August 2015
https://en.wikipedia.org/wiki/Luna_Park_Sydney, retrieved 1 August 2015