THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, June 21, 1996 TAG: 9606210482
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY ALEX MARSHALL, STAFF WRITER
LENGTH: 106 lines
For the second year in a row, Nauticus is bringing in fewer people and less money than it did in its previous season.
Nauticus has failed to meet budget projections in attendance and revenue every month this year - its first of year-round operation.
Despite being open during winter months for the first time this year, the battleship-gray building has come up at least $500,000 short of projected revenues for 1996.
Nauticus' leaders said they are cutting salaries and promotional expenses, and reworking debt payments to make ends meet. They pledge to balance the budget this year without additional city help.
``I don't expect to go back to the city for money,'' said Lee Acors, director of finance at Nauticus.
The City Council spends about $1 million annually on Nauticus to supplement payments on $35 million in bonds sold to build the attraction. It also applies the taxes Nauticus pays to Norfolk - roughly $500,000 annually - to the debt payments instead of the city treasury.
David T. Guernsey, Nauticus's president since January, said Thursday that the key to turning the facility around is getting citizens to appreciate the attraction more.
``I think this place is going to work, but it's not going to happen overnight,'' Guernsey said.
The center has reduced prices for an all-encompassing ticket from $14 to $10.95. That meant, however, eliminating a $7.50 general admission ticket that did not include some of the most popular attractions.
Nauticus has pushed to sell annual memberships, something other museums, zoos and science centers around the country have found important.
So far this year, Nauticus has sold about 1,900 memberships, significantly more than had been projected. A family can visit Nauticus and then apply their ticket prices to the $60 family membership fee, which allows unlimited visits for a year. Last Saturday night, 500 members came out to a private showing of Nauticus's new exhibit on underwater recovery, Deep Sea Treasures, Guernsey said.
But the center has competition locally. The new $37 million expansion of the Virginia Marine Science Musueum opened this month.
Guernsey said the two could complement rather than hurt each other.
``The Marine Science museum will bring more people to Hampton Roads,'' who can also visit Nauticus, Guernsey said. ``I am a huge proponent of it. We need to co-promote this region.''
Acors said the two sell different experiences.
``If you want to see a 3D IMAX theater, you'll go to the Marine Science Museum,'' Acors said. ``If you want to have a hands-on experience with Virtual Adventures - and if we get the word out - you'll come to Nauticus.''
The Marine Science Museum was never expected to pay for itself. Virginia Beach spends $3 million to $3.5 million annually to support it. Most of this pays the museum's debt service on the new expansion, said E. Dean Block, director of management services in Virginia Beach.
``We've never said that the Marine Science Museum would make money,'' Block said. ``From its inception, it was viewed as a community asset, like a library or a fire station.''
Nauticus, however, was supposed to not only draw people downtown but pay its own way. Consultants predicted the center would draw 850,000 people annually.
These unrealized promises have proved a thorn both to Nauticus and overall city endeavors. Many citizens have said they are now suspicious of assurances by the city that MacArthur Center mall will not need support.
In its first year in 1994, after opening in mid-summer, Nauticus drew 436,000 people, well below the break-even mark. But it was still one of the most popular attractions in the state.
Open nine months in 1995, the center drew only 278,000.
Scheduled to be open all year in 1996, the center has so far drawn just under 80,000 people over the first five months. Acors said the center will probably not meet its revised projections of 330,000 visitors this year because of poor winter figures.
The center expected to draw 15,000 visitors monthly in January and February, and 20,000 in March. Instead, it drew 5,464 in January, 7,253 in February and 13,767 in March. Bad weather hurt attendance, as well as lack of planning for special programs or tour bookings, said Acors and Guernsey.
Nauticus did better in April and May, but still came in under projections and less than the numbers from the previous April and May.
The center had expected to draw 35,000 people in each of the past two months, but 24,600 visited in April and 28,700 in May.
By May 1, the center had taken in $350,000 for 1996. Nauticus officials had budgeted $847,000 in revenue over the first four months.
To offset the gap, Nauticus officials have sold unused office equipment, cut salaries and certain promotional expenses. They have also extended a 5-year, $4.1 million loan from NationsBank into a 10-year repayment plan, which has helped reduce quarterly debt payments from $300,000 to $120,000.
But the attraction is likely to face a budget crunch next year. In November 1997, the center is scheduled to begin paying $140,000 a month in rent to the city. The $1.7 million a year is to be used to repay the construction costs. Those debt payments are now being covered by a $3.2 million prepayment by the National Maritime Center Authority, a private foundation which runs the attraction.
If the attraction does not become self-supporting, the city will have to ask itself how it defines success, Guernsey said. What if Nauticus draws 400,000 people who have a good time and learn something, he asked, but the center still needs some financial support?
Would that be a failure?
``What do you mean by success?'' Guernsey asked. ILLUSTRATION: Color photo
David T. Guernsey, Nauticus president
Chart by JOHN CORBITT, The Virginian-Pilot
Nauticus Still Struggling: Attendance, Revenue
KEYWORDS: NAUTICUS ATTENDANCE by CNB