City Council to discuss bailout plan for Fredericksburg Area Museum

April 28--The Georgian-style bank building, dating to 1927, was viewed as a beautiful place to expand the Fredericksburg Area Museum and Cultural Center.

It offered museum officials the ability to more than double their space for exhibits, storage, offices and a gift shop. And it was located at a busy intersection in the heart of downtown.

And so in 2004, the nonprofit organization bought the building at the corner of Princess Anne and William streets at a 25 percent discount and with a $200,000 pledge of support from its last occupant, BB&T.

The museum also bought a 19th-century retail shop on the William Street side to provide even greater square footage.

But those plans carried a hefty price tag. As renovation costs exceeded expectations, the tab hit the $12 million mark. And that didn't include $1.5 million for new exhibits.

Despite some million-dollar donors, the museum has struggled financially and is now trying to escape its burden of debt.

Museum officials plan to abandon those buildings--and the millions of dollars poured into them--and return to the old Town Hall building at 907 Princess Anne St.

That plan is contingent on the museum's creditors being willing to accept the deed instead of pursuing foreclosure, according to a memo from museum President and CEO Susan Glasser.

It also hinges on the City Council and other prospective donors responding favorably to Glasser's request for funds to provide the financial footing needed to resume operations and establish stability. The museum ceased operations in the former bank building on April 10 and laid off staff.

The City Council is scheduled to discuss what is being presented as a one-time request for $750,000 at a work session this evening. That amount is half of the $1.5 million needed to re-open in old Town Hall in January, according to an April 8 memo from Glasser to City Manager Bev Cameron.

The city is being asked to make its contribution in three installments: on June 1, Aug. 1 and Oct. 1.

The city already had $95,975 for the museum in its budget this year and next year as its contribution toward operations. If the council authorizes the $750,000 in additional funds, they would come from the city's reserves, Cameron has said.

MUSEUM'S HISTORY

The bank building's distinct and imposing architectural footprint on downtown Fredericksburg is a result of the influence of three men.

Architects Frank C. Baldwin of Spotsylvania County and Philip N. Stern of Fredericksburg designed the structure.

However, their design drew from the style of Great Britain's Sir Christopher Wren, and, specifically, a building at England's oldest boys' school.

The Fredericksburg structure was built by Planters National Bank, which opened it for operations on Sept. 6, 1927. Over the years, other banks operated in the building: Farmers and Merchants State Bank, then First Virginia Bank and, finally, BB&T.

Connecting the bank building at 1001 Princess Anne St. with the former Carley's Dress Shop at 215 William St. brought the total square footage to 19,500 at a cost of $990,000 for the two properties.

The old Town Hall building, where the museum had operated since 1988, has 9,000 square feet.

Incorporating the Carley's structure into the project proved expensive, as did renovations to the 20th-century bank. Work began in July 2006 and crews quickly discovered significant structural issues.

The retail shop, which dates to the 1880s, had a shaky foundation that needed to be replaced, a rotten roof parapet that needed to be replaced and a leaky rear wall that needed repair.

The bank building's original ceiling and plaster moldings also needed major work.

In addition, floors at Carley's needed to be replaced to link the two buildings.

There were also the costs to transform the buildings for museum use, such as climate controls for preserving historic artifacts and lighting for exhibits.

The work took five years during which the project's price grew from $9.6 million to $12 million.

By the summer of 2008, $11 million had been raised, spearheaded by local businessman Charles G. McDaniel.

Josiah Rowe, a former Fredericksburg mayor and then-publisher of The Free Lance-Star, and his late wife, Ann, were early donors, giving $1 million.

Local philanthropist Catherine "Kitty" McCann also gave $1 million in an effort to inspire others.

The structure opened on Dec. 6, 2008, with seven galleries as the Catherine W. Jones McKann Center.

In the end, the museum's new wing had space for exhibits, a learning center, staff offices, collections storage and a gift shop.

Less than seven years later, the building that opened to fanfare and hopes of spurring tourism and economic development is shuttered.

FINANCING PLAN

The museum is currently indebted to five banks, owing $3.4 million on a construction loan of $5 million, according to Glasser.

Operating the McKann Center and old Town Hall has cost $1 million annually, an amount that has proven too large for the nonprofit to handle, she said.

Following a year of discussions, the museum's leadership chose to pursue a financial restructuring. Glasser crafted a $1.5 million plan she said would put the operation in the black for the first time.

In addition to needing cooperation from the banks and the city, the plan relies on private money and grants. Of the $750,000 being sought outside the city, the museum has $248,000 in hand from pledges received and another $10,000 from a grant, according to Glasser's memo.

Glasser said a board member has committed another $100,000 and the museum has applied for two additional grants totaling $30,000, but won't hear back on them until June and July.

The museum's last fundraising campaign generated $353,700 in pledges, but Glasser realizes some of those donors may not fulfill them given the plan to return to old Town Hall. In her memo, she estimates that if 60 percent of those pledges are received, the museum would need to raise $150,000 more from additional donors to meet the $750,000 goal.

Glasser's plan is to allocate the $1.5 million as follows: $500,000 to establish an endowment; $500,000 for renovations of old Town Hall for storing collections, installing three exhibits and related costs; $245,780 for a cash reserve; $211,640 for salaries and benefits for four full-time and four part-time staff for seven months; and $42,580 for operating expenses such as utilities and insurance.

Pamela Gould: 540/735-1972 [email protected]

Pamela Gould: 540.735.1972

[email protected]

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