THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Saturday, January 11, 1997 TAG: 9701110266
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY ALEX MARSHALL, STAFF WRITER
DATELINE: NORFOLK LENGTH: 106 lines
The directors of Nauticus formally asked the City Council Friday to make the riverfront attraction part of city government and end its status as a quasi-independent institution.
The move, if approved by the council Tuesday, would put Nauticus in the same status as the Marine Science Museum in Virginia Beach and other publicly supported attractions in the area. It would be a city-managed facility, much of whose expenses are paid by the taxpayer.
The change comes as Norfolk is building MacArthur Center, a $300 million downtown mall it believes will not require subsidies, and is lobbying for a $143 million arena to house an NHL franchise that will require taxpayer support.
Switching Nauticus to direct control by the city would not mean an increase in the debts Norfolk residents are responsible for, Nauticus and city officials said.
It will, however, end the premise under which Nauticus was originally built, that it be an independent body not relying on the city for either funding or management.
The council is expected to approve the move. It discussed the change in executive session this week, several members said.
``We can't board it up, and we have to use all the resources of the city to make this thing work,'' said Councilman Herbert M. Collins, who led an unsuccessful referendum campaign against the facility before coming to council. ``It's too much money to trust to anyone else.''
Mayor Paul D. Fraim said it was unrealistic for the city to have ever expected the museum to pay all its costs, including the cost of construction, without city help.
``No other large scale facility of its type is expected to pay both its operating expense and debt service,'' Fraim said.
Making Nauticus a city agency would mean the 40 full-time and 57 part-time employees of Nauticus would become city employees. The president of Nauticus, David Guernsey, would answer to City Manager James B. Oliver.
The National Maritime Board, which now runs the center, would become advisory.
The center failed to live up to expectations principally because not enough people came through its doors. When Nauticus was proposed, consultants estimated that 850,000 would visit annually and that the facility would not need any city subsidies. It has never approached those numbers in its 2 1/2 years of operation. In fact, it drew more people in its first six months - 435,000 - than it has in any full year since.
About 258,000 came through the doors in 1996, said Peter G. Decker Jr., a Norfolk attorney who recently became chairman of the Nauticus Board. Attendance was up in December, however, when the Titanic exhibit helped bring 17,444 people to the museum.
Right now, the city is paying about $1 million a year toward the center's debt service, which is the facility's largest single expense. In addition, the city is applying the center's meals, sales and admission taxes toward its debt service.
Regardless of who runs Nauticus, the debt payments are expected to increase dramatically toward the end of this year. This is because an initial prepayment of part of the center's debt by the private foundation - intended to help it get on its feet - runs out in November.
After November, the city will probably have to pay an average of $2.6 million a year in Nauticus loans, unless the facility's revenues skyrocket or more private donations are gathered.
The center needs about $300,000 in additional city money to meet its expenses for 1996, Decker said. He added that he was not sure whether the council would directly vote on this expenditure.
Decker said he believed Nauticus is actually a moneymaker for the city if the taxes on money spent on hotels, restaurants, parking and other costs by the 258,000 people who visited Nauticus in 1996 were figured into the equation.
Eventually, Decker predicted, Nauticus will turn a direct profit. He noted that it took Scope 25 years before it presented the city with its first surplus - $850,000 - last year.
``I look forward to the day when the director of Nauticus can call the city manager and say, `I've got a check for you.' '' Decker said. ``I see that happening some day.''
Turning Nauticus into a city agency would make it similar to Scope, Chrysler Hall, Wells Theater or the Harrison Opera House, Decker said, each of which receives substantial subsidies from the city, but are considered assets to Norfolk as a whole.
``I want to be a member of the family,'' Decker said. ``I want to be part of the success of downtown and not be part of something that is perceived as its singular failure.''
Decker, like other Nauticus officials, also said he expected the board and the center's director to continue improving the center to attract bigger crowds and make more money.
One step discussed by Guernsey and the board is to phase out the name Nauticus and refer to the facility only as the National Maritime Center. Decker said Friday this would probably occur.
Decker said the board's request should not be seen as any lack of faith in David Guernsey, the Nauticus president who came from Savannah a year ago.
``David Guernsey has a complete vote of confidence,'' Decker said.
Whether Guernsey would report directly to Oliver or be placed under the department of civic facilities director William Luther is up to City Manager Oliver, Decker said.
Putting Nauticus under city control contrasts with a trend in Norfolk to privatize some attractions. The city has split off the Botanical Gardens and has discussed doing so with the zoo.
Fraim said the move was not made without considerable thought.
``Obviously, we've had to take some very sober looks at Nauticus,'' Fraim said. ``It's another step in our effort to reposition Nauticus so it can fulfill its potential.''
There would be some cost savings, said Fraim and other city officials, because some management, marketing and financial services are now duplicated.
KEYWORDS: NAUTICUS