The Greensboro City Council puts the International Civil Rights Center and Museum’s request for $1.5 million on hold. Following a conference call with the museum’s lenders and chair Skip Alston, Mayor Robbie Perkins said he “got a much better understanding of how the debt was structured.” It’s not pretty:
These days, the project carries a debt burden of $30 million tied to the money from investors that qualifies both for federal New Markets Tax Credits, and for state and federal historic-preservation tax breaks.
….At the end of the museum’s 7-year “compliance period” when these credits expire in 2016, government rules would free the project initially from $11 million in debt, including $7 million tied to the historic-preservation tax credits and another $4 million of New Markets’ red ink, Perkins said he learned Thursday.
The remaining $19 million debt would survive after that but only within a project subsidiary that essentially would leave the nonprofit museum owing itself the money, the mayor said.
“That remaining $19 million is basically owed from one entity within the civil rights museum to another,” Perkins said. “So that at the end of the day, (museum officials) are correct in saying that they won’t have anything left but their debt to Carolina Bank.”
Pretty staggering debt, and they believe a mere $1.5 million over three years from the city will help them turn the corner. Note also that in order “to reach that goal, the museum must keep its doors open for another three and a half years while facing higher operating costs that museum leaders link largely to rules that govern the tax credits.”
Hopefully the City Council is carefully considering the possibility that the museum won’t make it three more years, which, given the numbers seems more like reality.
