THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, August 23, 1995 TAG: 9508230509
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Long : 101 lines
Nauticus, Norfolk's much heralded maritime museum, was intended to be a tourism magnet for the city's downtown. The $52 million project was also supposed to pay for itself.
So far, it looks like the city's year-old attraction is meeting its bills. But the number of people paying to get in is nowhere near what was projected.
Nauticus officials are trying to downplay attendance and, instead, emphasize revenue, said Samuel B. Rogers, Norfolk's marketing director and the facility's interim executive director.
To meet expenses, Nauticus operators are cutting costs and using cash donations and a line of credit. They are also trying to better market the attraction in hopes of drawing larger crowds.
``I think it's beginning to turn the corner of its financial stability,'' said William H. Luther, Nauticus interim operating manager. ``We did cut the budget we inherited by 38 percent and we are still making cuts in the budget as we review our revenue.''
``It's a leaner and more efficient organization,'' he continued. ``I think we'll show a slight operating profit this year, exclusive of debt service. I think some aggressive marketing campaigns will help our financial trends.''
Box office receipts showed that 137,800 people attended Nauticus from April through July 1995, Luther said. That figure covers the museum's first operational quarter.
Even if those attendance figures tripled during the summer, the museum's total visitors would still fall well below the 850,000 a year that feasibility consultants said the facility would need to break even.
Still more worrisome, attendance and admission revenues dipped as the peak summer tourism season approached.
June attendance dropped to 29,615 - compared to 34,096 in April - before rising to 41,446 in July.
Nauticus pulled in $257,347 in June admissions compared to April's total of $298,498, which marked the first month the museum was open to the public this year. Comparisons to last year are not available on a monthly basis. Nauticus opened in June 1994.
Box office receipts showed that 26,428 attended the museum through August 20, but the threat of Hurricane Felix pushed that number down, Luther said.
Rogers attributes the first-quarter admissions to a slow seasonal start.
``June is not the big tourism month in the region,'' Rogers said. ``It's not a heavy month for the family. The kids are still in school and they're not on vacation. July and August are really the two big seasons.
``One of the weaknesses is, group tour business declined in June,'' he said. ``We know that's it's also down in July.
City officials are still grappling with how to define the museum, Rogers said. Visitors do not know how to identify Nauticus, which has been marketed as a museum, an interactive facility and an aquarium.
Museum officials also worry about whether Nauticus will generate enough income on its own to cover expenses.
Luther said facility has met its operating expenses, but mainly through the support of private donations through the National Maritime Authority foundation, which contributed $1.5 million. Part of that total went toward the city payment and part toward the NationsBank payment.
City officials continue to restructure Nauticus' debt and trim its budget. Last year, the city of Norfolk approved an additional loan of $5.2 million to Nauticus to cover its expenses.
Operating expenses through for the first six months of 1995 totaled $2.046 million, which includes repairs, maintenance, utilities, salaries and leftover invoices from December, Luther said. Nauticus had to open a line of credit to help pay its bills during the first three months of 1995, when the museum was closed but still incurring expenses, he said.
Operating expenses should range around $4 million in 1995. In addition, debt service for the year is about $3.5 million.
Nauticus has made an interest and principal payment to the city of $1.3 million and two payments of about $526,000 total to NationsBank to cover loan payments.
Nauticus is recruiting a new director of finances and a general manager for the facility because ``basically someone needs to be there regularly,'' Luther said. ``Interim is too difficult.''
``My impression is that the number of expenses to income are in a good relation,'' said City Council member Mason Andrews. ``This includes debt service. The number of visitors are less than has been predicted originally, but the per capita per person is much better. They have cut expenses enormously, and it hasn't hurt anything.
``I think it's doing its function,'' Andrews said. ``It's paying off its short-term debt, and it's servicing its long debt, but not completely. But they tell me their budget will eventually meet all its operation.''
Nauticus operators hope to attract returning visitors, especially local residents, back to Nauticus by showing traveling exhibits. Its first exhibit, photographs from one of the world's best underwater photographers, Al Giddings, will debut on Oct. 1. ILLUSTRATION: Graphic
1995 NAUTICUS ATTENDANCE
January through March: 4,001
April: 34,096
May: 32,643
June: 29,615
July: 41,446
August: 26,428 (through Aug. 20)
by CNB