THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Saturday, January 18, 1997 TAG: 9701180364
SECTION: FRONT PAGE: A1 EDITION: FINAL
SERIES: Special Report: Part 2 - Nauticus: What Went Wrong?
SOURCE: BY TONY WHARTON, STAFF WRITER
DATELINE: NORFOLK LENGTH: 149 lines
When Nauticus opened in 1994, there were Nauticus comic books, Nauticus computer disks, and lots of Nauticus ads. The promotions budget, depending on what you included, was $2 million to $3.5 million.
But attendance didn't live up to projections right away. Nauticus had to tighten its belt. Advertising was slashed to $758,000. Attendance dropped. In the most recent budget, $326,000 was set aside for advertising - and attendance declined further.
``I think what we tried to do, once revenues weren't coming in at the forecasted rate, we tried to deal with it on the operating side, by cutting expenses,'' said Mayor Paul D. Fraim. In retrospect, the advertising ``may not have received the priority it should have.''
This week, the $52 million facility was turned over to the city of Norfolk to become a department reporting to the city manager. City officials are examining how to further cut costs, and are considering turning over the project to a private company, such as Disney.
In interviews this week with officials, consultants and others involved since before the launch of Nauticus, three possible explanations of the attraction's disappointing performance emerged: a falling-out between the original creators; budgets, particularly for advertising, that may have been too austere; and unrealistic expectations for attracting tourists to a city not known as a tourist magnet.
Spending was a theme often repeated.
Many Norfolk residents thought of Nauticus as an expensive gamble - the city put $44 million into construction and exhibits. The early promotions budget, depending on whom you talk to, ranged from $2.2 to $3.6 million.
Was it enough for an unknown high-tech science center?
``We were pinched on money for promotions,'' said Richard Goldbach, chairman of the Nauticus board when it opened. ``But I don't know that it made a difference to attendance.''
Dave Iwans of Group III Communications in Norfolk, which handled the early promotions, felt the initial budget was adequate.
But as Fraim said, after the first year, when the center didn't immediately live up to expectations, the ad budget was one of the first things to go. More than $1 million was bled off.
The city may have cut its own throat.
``Marketing is critically important,'' said Neil Winslow, who handled economic analysis on Nauticus in the early '90s for the Harrison Price Co., and is now head of the Warner Bros. theme park division. ``You've got to spend the money to get people in the front door.''
City officials acknowledge the cuts may have been too deep, too soon. Fraim said, ``There was an effort to shift portions of the marketing budget to the Virginia Waterfront campaign.''
But he admitted the Virginia Waterfront campaign was a ``broad-brush'' effort to promote Hampton Roads and did little to specifically advertise Nauticus.
The man who first designed the Nauticus exhibits thinks even they may have been done a little too cheaply, considering that the project was trying to sell itself as a cutting-edge technology center.
``The thing that is difficult is that you need a lot of money to pull it off,'' said Herb Rosenthal, who left after a falling-out with Nauticus' first professional director, Michael Bartlett.
``When you commit yourself to doing a high tech production, you really have to throw money at it to make it work,'' Rosenthal said. ``Youngsters have been to Disneyland, to EPCOT, they are graphically sophisticated. You just can't astound anymore with a mediocre production.''
Expectations tell the story of Nauticus - the expectations of city leaders and residents, in particular.
The city and residents expected Nauticus to draw enough customers to pay for everything, including operating expenses and construction debt. Nauticus' backers expected it to draw more than 800,000 tourists a year to a city that was not already a household name.
That didn't happen.
Goldbach, a member of the board of Nauticus and president of Metro Machine Corp., said there was less competition for the tourist dollar when Nauticus was planned than when it opened.
``No one saw this competition that was going to materialize,'' Goldbach said. ``I also don't know that any of our thinking really focused on the fact that we were trying to attract tourists into an area that traditionally was not a tourist destination, in an urban city like Norfolk.''
Many of the big-ticket projects in recent years, whatever else they had going for them, were in cities already known to tourists: aquariums in Baltimore and New Orleans, Opryland in Nashville, countless new attractions in Orlando. (Of course, Orlando was unknown when Disney opened there, but Disney makes its own rules.)
Yet Norfolk's identity for tourists was not insurmountable. The keys are not purely location and attendance, but financing and expectations, too.
``It's not surprising that the initial projections for attendance may have been too high,'' said Bonnie VanDorn, executive director of the Association of Science-Technology Centers in Washington, D.C. ``That's common in these kinds of attractions. Someone said to me, somewhat cynically, `Have you ever heard of a consultant that didn't deliver what you wanted to hear?' ''
She said such tourist attractions have to prepare for the possibility of a slump with their financing and through community support.
Look, for instance, at Cleveland's example.
Last summer Cleveland opened the Great Lakes Science Center, a project eerily similar to Nauticus - an interactive science attraction in a once-blighted urban area.
The Cleveland project cost $55 million and the combined exhibits ticket price is $9.95, both nearly identical to Nauticus. If Norfolk's experience is any indication, Cleveland should be going through some of the same nail-biting pretty soon.
Instead, it is hailed as a success. In the first two months 183,000 people visited the Great Lakes Science Center.
Why?
The Cleveland project was financed almost entirely through state and community support, and thus less pressure was put on pulling in hordes of tourists right away.
The state of Ohio chipped in $18 million for the science center, local corporations came up with $16 million, and local residents bought more than 5,000 memberships.
Nauticus never had that kind of financial or moral support in Norfolk.
In Norfolk, private support came to $5.5 million, which fell short even of the backers' $10 million goal. The state put in $3 million. Long-term loans paid for most of the attraction. There was even a petition drive against the project.
``I do think to some extent there was a local turnoff because of the controversy,'' Goldbach said. ``There were people who found it a convenient thing to run against. If it hadn't been Nauticus it would have been something else.''
City Councilman Randy Wright, one of the early skeptics, agreed people were turned off.
``It's never been sold to the community. There's always been an us and them feeling,'' he said. ``Compare Nauticus to the Air and Space Museum in Hampton or the Virginia Beach Marine Science Museum.
``People in those cities, whether they go to the facility or not, they speak of it with pride. People in Norfolk don't speak of Nauticus with pride.''
What comes next for Nauticus?
On Thursday Fraim and Wright said the city is looking for an outside company to buy or run Nauticus.
If that doesn't happen, however, Nauticus will not go away. The building could be closed and locked today, and the city would still spend more than $2 million a year on the debt alone.
``I don't see that there's any logical alternative but to stay the course,'' Goldbach said. ``It would be a terrible detriment to the city if it were just sitting there and not functioning.
``I've done some soul searching, but I keep coming out at the same place. We've got a wonderful facility and we just have to find the right strategy for it. But we do have to keep it in its first-class condition.'' MEMO: Staff writer Alex Marshall contributed to this report. ILLUSTRATION: Color photo of promotion piece
It now seems clear that advertising for Nauticus, such as this 1994
promotion, was cut too quickly and too deeply.
Charts
Annual attendance and Advertising budget