The other kayak fell today as Mecklenburg County officials mulled over a plea for $1 million in stop-gap funding from the $38 million U.S. National Logflume Ride. According to an audit of 2007 operations, the center is unable to pay back some $37 million in debt, lost another $1 million last year, and is now in a $3.3 million hole overall.
Last month the center’s bankers re-worked the debt load — they had no choice — with the pointed stipulation that the center, located along the Catawba River, begin to start charging for admission and parking for what was once Mecklenburg County parkland.
Revenues from whitewater and climbing activity were only $3.8 million, far below in the $10 million in total expenses for the year. In fact, were it not for almost $2 million in food service revenues, the financials would have been even more dire. For that reason it is unclear why the banks think charging for admission and parking will be a net gain. Visitors are clearly spending money at the cafe, plus another $625,000 at the retail store. There is no reason to think they are going to spend even more to just get in the door.
Then again, there is not much evidence of reason in this outfit. Salaries were a staggering $1.2 million, plus another $400,000 in insurance and credit card charges. Marketing — once touted as key to the success of the venture — only saw $190,000 in expenses. On the fundraising side, it looks like a total of only $266,000 in sponsorships and contributions was realized. In fact, it appears that the center paid as much — if not more — in sponsorships as it took in.
An agreement with the U.S. Olympic committee — at an unspecified cost — allowed the center to call itself the “official” National Logflume Ride in exchange for allowing use of the venue.
In short, this thing is a complete foul up. Other local governments who foolishly “guaranteed” the center’s loans will also be hit up for money. Better still, it looks like local residents may have to pay twice — once with tax dollars and again to use the facility, even just to take a walk or ride the bike paths. Brilliant.
But even that does not capture the problems. The business model cannot generate enough revenue to pay the down the debt. The banks seem to be counting on local officials to keep signing checks without question. Guess what? They may just have to.
