THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, December 3, 1994 TAG: 9412030009
SECTION: FRONT PAGE: A10 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 57 lines
Nauticus - the high-tech National Maritime Center attraction on the downtown-Norfolk waterfront - is bringing in as much revenue as consultants had figured it would.
That's heartening.
But Nauticus' net cash flow isn't yet enough to cover operating expenses and full debt service on existing loans, long-term and short-term.
That's disappointing.
So the National Maritime Center Authority, which oversees Nauticus, is asking City Council to convert into long-term debt $5.2 million in short-term debt incurred to cover cost overruns for construction and exhibits. Nauticus could handle that.
City Hall staff is exploring the possibility of use of all or part of the half-million dollars a year that Nauticus will produce on site in municipal admission, merchandise and food taxes toward paying off the project's capital debt.
Norfolk borrowed $33 million to finance Nauticus' construction. Using private funds, the maritime authority has made $2.6 million in interest and principal payments on the debt. If City Council grants the authority's plea, and it should, Nauticus' long-term debt will rise to $38 million. Meanwhile, the authority seeks further donations from businesses and individuals.
Nauticus' plan calls for it to be self-supporting. City Hall expects Nauticus to (1) meet operating expenses, (2) pay off the construction debt and (3) feed taxes to the city treasury. There's good reason to believe that Nauticus can meet the first two objectives handily, and the third with effort. More than 400,000 sightseers have passed through the maritime center since its opening June 1. Some 475,000 people will have visited it by the end of this month. By a lopsided margin, most of Nauticus' customers come from outside Hampton Roads. Attendance is expected to reach 575,000 in 1995 and 650,000 in 1996.
While attendance is lower than projected, visitors' per-capita spending ($11.79) is higher. That's why Nauticus' revenue is in line with projections.
Like Harbor Park, Nauticus - which is both entertaining and educational - may need revenue from municipal taxes it collects for the city in order to thrive without burdening taxpayers. This is not revenue City Hall is counting on, though it would be welcomed. It would not exist if Nauticus did not exist.
Nauticus' visitors are boosting municipal-parking-garage revenue, hotel-and meal-tax receipts and Waterside festival marketplace sales. Convention business is up because of Nauticus' presence. No Norfolk taxpayer would be tapped if the National Maritime Center's 20-year debt were to be enlarged to $38 million and, as is possible, tax revenue produced by the venture itself were employed to keep it sound. by CNB