Thursday, July 14, 2011
Leonardo close to collapse?
Posted By Stephen Dark on July 14, 2011, 11:48 AM
The Leonardo has rejected a claim by Salt Lake City that the yet-to-open science museum will run out of cash by September, 2011, if Salt Lake City Council doesn't come to the rescue and prop it up with a $600,000 loan from its Revolving Loan Fund.---
In a city council transmittal dated July 8, 2011, staff of the Community and Economic Development Director [CEDD]'s office recommended that Salt Lake City Council "approve a $600,000 loan for the Leonardo through the City's Revolving Loan Fund." If the council did not approve the loan, "the Leonardo will run out of cash by September of 2011."
But the Leonardo's spokesperson, Lisa Davis, said the dire financial prediction is "inaccurate." She acknowledged the Leonardo has asked for the loan, but she says the museum will open with or without it. If it came to choosing between "opening on a wing or a prayer," or opening it "the right way," giving it "the bang it deserves," then the Leo was going for "the right way."
If the council approves the 10-year loan, at 3.25 percent interest, it would be making, the transmittal noted, "one-time exceptions to RLF requirements regarding eligibility, guarantees, collateral, origination fees and job creation."
The Leo has come to the council, cap in hand, because, the transmittal continues, "construction delays have forced the Leonardo to postpone its opening until October, at the earliest, depending on completion of the building's ongoing renovation," which has been handled by a city-appointed construction company. Davis characterized the delays as "unfortunate."
According to 2010 press reports, the opening was scheduled for April 2011, to coincide with the museum's namesake's anniversary. But, as with so many of the Leonardo's deadlines in its 10 year history, that window came and went. In addition, the delays, the Leo told CEDD staff according to the transmittal, have impacted fundraising efforts.
The transmittal noted that while nonprofits weren't usually eligible for RLF loans, there had been two notable exceptions from the late 1990s: the Tracy Aviary and the Children's Museum. Such is the apparent urgency of the Leo's financial crisis that CEDD staff took the unusual step of the loan not being reviewed by the RLF committee, "as is typically done."
The sting in the tale, at least for the Leo staff, is that CEDD also recommended that the lease agreement with the museum be terminated if the organization defaults on the loan, resulting in the Leonardo being "required to vacate the building." But Davis said the Leo was "well within budget to be able to repay the loan."
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