THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, November 30, 1994 TAG: 9411300463
SECTION: LOCAL PAGE: B01 EDITION: FINAL
SOURCE: BY ALEX MARSHALL, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 71 lines
Nauticus has cost more and made less money than expected this year. To help it meet its debt payments, the city is preparing to surrender $575,000 in taxes from the facility and to underwrite another $5 million in Nauticus loans.
The City Council on Tuesday scheduled a public hearing for Dec. 20 at 2.30 p.m. on the proposals. With several Nauticus critics now on the council, they are likely to cause debate.
The council discussed the proposals in a closed-door session.
City Manager James Oliver and Councilman Mason Andrews later said Nauticus was essentially doing well. The new money was necessary, they said, because construction last spring of the Aegis Theater and Virtual Adventures exhibits had unexpectedly added to the cost of the project.
These debts were really capital costs, and should be paid through long-term bond debt, they said.
Councilman Herbert Collins, a longtime critic of Nauticus, said he ``had a real problem'' with the proposals. He did not say whether he would vote against them.
Assistant City Manager Darlene Burcham, who oversees the project, said Nauticus directors had been overambitious in expecting to meet the high, first-year capital costs through operating income.
City staff is proposing that the meals, admission and sales taxes the project now contributes to city revenues - this year an estimated $575,000 - be used in the future to help meet the project's debt payments.
Burcham said the Harbor Park baseball stadium has a similar tax arrangement. The money the city receives from the stadium's sales and other taxes is used to help the park meet its million-dollar annual lease payments, she said.
The council hopes to make downtown a tourist and convention center, and a highly visible attraction like Nauticus is part of the plan. Eventually, city officials say, the project should pay for itself, if only by attracting visitors to the city.
Nauticus cost more than $50 million. The city spent $19 million preparing the site for the long, battleship-gray exhibit and building the pier on which it sits. The rest of the money came from $33 million in city-backed loans to the facility. If the new loans are approved, the project will have a debt payment next year of $3.5 million, Burcham said.
Mayor Paul Fraim said Nauticus could have met its expenses without more city help ``if the numbers had been a little better.''
But attendance this year - projected to be around 475,000 - has been good, Fraim said.
Nauticus, which opened June 1, did not have a full season this year. Also, the big, extra-admission attraction Virtual Adventures did not open until August. That cut down on attendance and revenue, Burcham said.
Nauticus is open four days a week this fall, 10 a.m. to 7 p.m. Thursday through Sunday. On Dec. 22, Nauticus is scheduled to open seven days a week through Dec. 31. Nauticus will close in January and February.
An early study said the project needed to attract 750,000 people annually to break even. But Burcham said visitors have been spending more than expected, so the break-even point will be lower. The additional spending has helped revenue come close to projections, even though attendance has been off, Burcham said. ILLUSTRATION: Color photo
Nauticus, which cost more than $50 million to build, opened June 1.
KEYWORDS: NORFOLK CITY COUNCIL NAUTICUS
by CNB