Archive for the ‘SC Aquarium’ Category

Newspaper Spin

Monday, May 26th, 2008

I think you used to be able to count on newspapers for objective reporting on events taking place, but then maybe that was just big city newspapers that had competition or just when they were dealing with important national issues. I’m not sure if that was just a myth and the idea of a newspaper just reporting the facts was always an illusion.

These days, when it comes to local newspapers without competition and when it comes to local issues – I don’t know if you can really count on objective reporting or even factual reporting. They all seem to have an agenda and reporters and editors are instructed to tow the company line or are just told to soften things up – for the community’s sake – and advertisers.

When it comes to the SC Aquarium in Charleston, SC, and its financial well-being the Post & Courier in Charleston has decided to take the soft touch in reporting. They seem to be down-right protective at times – hoping readers will be able to read between the lines for the truth, but most won’t get it unless they are hit over the head with the facts.

The headline for an article posted on May 10, 2008, states, “Aquarium posts ’07 loss” and the subtitle is “Rise in admissions was offset by increases in development expenses”. The short story is – by increasing the aquarium’s admission price they were able to bring in more money than last year, but they lost money on bad fundraisers – so 2007 will record a $ 225,886 loss.

The reporter also said that this loss, “sunk the facility’s plans for a third consecutive year in the black.” This would imply that 2007 was just a bump in the road on the way to financial success. But, the “in the black” that he is talking about in 2005 and 2006 was gained by industrial titan board member, the late Jerry Zucker, getting the banks that hold the debt of the aquarium to restructure loans and in some cases write them off completely.

Debt is the name of the game – the aquarium lost $1.22 million in its first year of operation (2000-2001). That’s not bad, in 2003 the aquarium lost $2.3 million. In Aug. 2007, it was reported that the aquarium lost $5.4 million in its first four years of operation and has had its $11.75 million bank loan restructured five times. They currently have a deal with the banks to write-off a dollar of debt for every dollar paid on the debt – through 2010.

So “in the black” for the SC Aquarium means that if you can’t make your loan payments – you just get the bank to write them off and make them go away. How nice that would be for us all. Apparently the banks just can’t write the debt off as fast as the aquarium makes it. The debt write-offs have been as high as $500,000 at a time.

Back in 1984, the City of Charleston commissioned an aquarium feasibility study. After that report was made Charleston’s Mayor Joe Riley told area taxpayers that if they approved this aquarium – it would pay for itself by attracting 750,000 to 1 million visitors a year and become an economic engine for the area around the aquarium. To this date the only year visitors topped the 500,000 mark was during its first year of operation – and many of those numbers are based on free admissions and a special $1 admission weekend.

As far as being an economic magnet – the only commercial development – Fountain Walk – right next to the aquarium has had to close the doors on its I-MAX theatre, opened the year the aquarium opened its doors. I guess they couldn’t find any friendly banks to help them stay profitable. Nothing else has opened up around the aquarium except the Federally funded Fort Sumter Visitor Center and a parking garage. And, if the aquarium keeps raising its admission price to generate more admission revenue – attendance will just keep dropping from year to year – as it has since the day the doors first opened.

Hey – so what’s all this got to do with the arts – or the visual arts for that matter?

Well – in many ways this aquarium has robbed the public of many more worthwhile projects that could have taken place in the Charleston area. Like a major arts facility mentioned in my second installment of this blog. The $64 million plus (more like $70 million) that was wasted on this failed project could have gone towards a waterfront convention center which would have brought in conventions that now go to cities like New York, San Francisco, Atlanta and Baltimore. That convention center would have helped the local art community more than an aquarium has. All those write-offs could be contributions to art groups. A lot of money from the local private and business community that goes into propping up the aquarium every year could be going to the cultural community – which draws more people and visitors to Charleston than a fish tank. These fish tanks can be found in almost every state. South Carolina has a private one, built with private money, which is one of the most visited attractions in SC. And, it’s just 80 miles away in Myrtle Beach, SC.

But, lets come back to 2008 and the newspaper report of another year in the red for the SC Aquarium and how that happened – even with the bank debt write-offs. The newspaper article reported that the aquarium spent 77 percent more on development or fundraising (an additional $248,286) but posted only an additional 21 percent, ($200,228) in contributions. Two projects alone apparently were real duds. One was a plan for the aquarium to give out yearly Environmental Stewardship Awards. The newspaper didn’t say, but it seems the gala awards ceremony cost more than it brought in. And, the other project which lost money was the “Turtles on the Town” project. This was supposed to be like the famous “Cows on Parade” project in Chicago, IL.

“Turtles on the Town” was supposed to be a fundraising project for the aquarium’s Sea Turtle Rescue and Hospital. Here’s the basic idea. The aquarium was hoping to find 50 sponsors who would pay $5,000 each to sponsor a fiberglass sea turtle to be decorated by school children, amateur artists and professional artists. They ended up with 34 sponsors – 8 were funded by groups with taxpayer money (cities, counties and non-profit agencies). So right off the bat they took in $170,000 from sponsors. I’m sure the blank fiberglass turtles cost something and the artists were probably given some money to do their thing. Let’s say we subtract $2,000 each – that leaves ($170,000 – $68,000 = $102,000). The exhibit of the decorated turtles was part of the City of Charleston’s Piccolo Spoleto Festival so I’m sure the City of Charleston picked up the tab on installing the turtles around town. The Post & Courier was probably a media sponsor for the project so there should have been no publicity cost to the aquarium. The P &C did so many articles about the project that even their own reporters were sick of writing about it.

The turtles were later sold at an auction which took in another $104,000. That means the aquarium should have seen somewhere in the amount of $206,000 – more or less. Unless they threw another costly party to go along with the auction spending more than they took in. So the question is – how did something that took in over $200,000 from the public – help the aquarium lose money in 2007? Unless the project cost $250,000 to produce and I can’t think of how that could be. Fundraisers are supposed to make money. And, if this money was to go for a sea turtle rescue program and a hospital – what would that have to do with the aquarium’s general operating fund? I would think that the people who supported this project thought they were doing something extra for the aquarium.

This reminds me of the SCETV Endowment (a group which helps raise money for SC’s public TV and Radio station’s programing). You know, the folks who come on your public radio station, two or three times a year interrupting programing to beg for money to pay for the programing – as if the State of SC just purchased the equipment for people to look at. They say the money is to pay for programs like Car Talk, All Things Considered, and the classical music they play. I’m sure because of the name (ETV Endowment) contributors think they are paying into a real endowment and the station buys the programing from the profits the endowment earns every year, but guess what – there is no endowment fund – it’s just their name. Clever name isn’t it.

So, was the “Turtles on the Town” project really a fundraiser for sea turtles or for the aquarium? It doesn’t matter – somehow they lost money doing it. At least that’s one of the excuses they offered the Post & Courierreporter as to why they were in the red for 2007.

I just can’t get my head around this. The public gives the aquarium $272,000 in sponsorships and auction purchases for “Turtles on the Town” and they lost money. The aquarium tries to give out conservation awards and they lost money. They raise their admission prices so that they can take in more money for doing the same thing they did for a lesser admission cost and they lost money. Banks are writing off a dollar for every dollar they pay towards their debt and they lost money. That’s some kind of organization.

And, at the end of the article the executive director of the aquarium, Kevin Mills makes these two statements in discussing their accomplishments in 2007, “It’s a very good picture altogether. We’re substantially ahead of where we expected to be.” I guess that’s being optimistic – for sure. I guess they expected to be less successful.

Perhaps if they stopped doing fundraisers they would have more money at the end of the year. Maybe if they lowered their admission, more people would go to the aquarium bringing in more money. And, maybe they can find another rich and powerful board member who can “convince” the banks to give them a two-for – reducing their debt $2 for every dollar paid against the debt. But, frankly, I don’t think anything can help this bad idea turn into a good idea.

A past audit report done on the aquarium expressed concerns that the facility is wearing down and their is no money budgeted for upkeep and replacement. Another long term problem they don’t seem to be able to address.

This is all on Mayor Joe Riley’s hands – he alone doubled the size of the aquarium and took several decades to build it so that by the time it was opened – aquariums were not so special anymore. But then again – there’s nothing that Joe can do wrong, according to the good taxpayers of Charleston. But then that’s another installment – at another time.

Here’s an update.

The same reporter offered a business item story on tourism in the Post & Courier on May 12, 2008, about the Georgia Aquarium which is the world’s largest aquarium – built with private funding by the owner of Home Depot. The land was given by Coca Cola – unlike all the public funds that went into the SC Aquarium.

It seems the Georgia Aquarium, opened just a few years now (2005) is already adding on a new facility for a dolphin exhibit. The add on will cost $110 million. The entire SC Aquarium cost about $70 million.

Here’s the kicker, the Georgia facility has sold 7.3 million tickets since they opened – in 4 years – that’s twice as many as the SC Aquarium has sold in 7 1/2 years.

There is no way the SC Aquarium is going to be able to compete in the region for aquarium visitors – even if Charleston is a better place to visit than most other aquarium cities.

It’s just another example of one of Mayor Joe Riley’s “World Class” facilities he has built in Charleston which don’t hold up to close inspection or comparison. It just shows Joe doesn’t get outside of Charleston much to see real “World Class” facilities.

Please – no more fiberglass turtles or anything for that matter.