Mobile City Council members expressed a mix of hope, resignation and buyers’ remorse as they voted 6-1 on Tuesday to take on $2 million in debt owed by the GulfQuest museum.
Mayor Sandy Stimpson, whose administration has been involved for months in negotiating the deal, called it a “huge step in the right direction” for the museum, and one that lifted a black cloud that had hung over it for years. About a year after it opened in 2015, Stimpson’s administration briefly shut down the museum and then took over its staffing, citing an urgent need to stem losses caused by lackluster attendance.
But Councilwoman Bess Rich, the lone “nay” vote on a package of three related measures, warned taxpayers to “buckle your seat belts” and brace for more bills. She said she feared the current transaction covered only a portion of GulfQuest’s debt burden and more obligations would come due in the future.
Councilman Joel Daves repeated a pragmatic argument he’d laid out in a Monday meeting of the council’s finance committee, which he chairs. If the council failed to act, he said, “the loan will go into default, the banks will come back for their collateral, the collateral being the exhibits, they’ll take the exhibits out, there won’t be a museum, and then the federal government will come after us for $26 million.”
The statement provides a window into the complexity of the challenge the city faces with the GulfQuest Maritime Museum of the Gulf Coast. Its construction involved about $26 million in federal grants related to its focus on transportation and its planned use as a transportation hub. If the museum fails to live up to that mission, the grants could be subject to a clawback. (On Monday, Daves had said the city would be playing Russian roulette if it ran the risk of that happening.)
The actual focus of Tuesday’s vote was an entirely different chunk of money: $5 million that GulfQuest owes to a group of area banks and has been unable to pay back. The pact approved Tuesday is a compromise in which the banks agree to slash the debt in half, to $2.5 million; the GulfQuest foundation pays off $500,000; and the city commits to pay the rest in the form of five annual $400,000 payments.
The move also codifies something that a majority of the council had long resisted: In the future GulfQuest will exist as a city department rather than an independent institution housed in a city-owned facility. The city will continue to bear payroll and operating costs, as it has since the 2016 takeover. Those add up to about $1 million a year in the city’s operating budget. The newly added $400,000 payments will come from economic development funds, according to the administration.
Councilman C.J. Small said he was perturbed that the city could go to these lengths for GulfQuest while withholding money the council had allocated for repairs and improvements to Ladd-Peebles Stadium. The stadium has much more of an impact on the lives of District 3 constituents than GulfQuest, he said. Councilman Fred Richardson reiterated his belief that GulfQuest can’t thrive unless it diversifies its board and successfully markets itself to a local audience. “You better believe, if we can’t get our own citizens to come out to it, you can forget about [outside] visitors,” he said.
Despite such misgivings, Small and Richardson were part of the majority voting to approve the deal on the table. Rich’s critiques were considerably sharper.
She said that problems with GulfQuest went all the way back to the fact that the public was never given a referendum on the decision to build it. She said she was “very concerned the financial plan before us is not comprehensive.” The true burden of GulfQuest included payments on a bond issue worth tens of millions of dollars that helped finance its construction, and potentially other funds related to complicated tax credits.
“The city needs to address this debt in the very near future,” she said. “Mobilians, you better buckle your seat belts, and I don’t think we’ve seen the last of our financial obligations to this entity. … The question is, then, how much longer do we pour money into this facility that can’t support itself. When do we say enough is enough and cut our losses?”
After the vote, Stimpson downplayed such concerns. “I can assure you every city councilor had all the information,” he said. “There was nothing withheld from anyone.”
Mike Lee, GulfQuest board chair, and Mike Dow, the former Mobile Mayor who became director of the museum earlier this year, stressed the view that resolving this debt opens the way to a cascade of positive developments. First and foremost, they said, the museum will be able to market itself more effectively. Its financial straits have crippled its ability to advertise, they said.
Dow said that many potential partners who might help with that effort, or otherwise fund programs at the museum, have hesitated because GulfQuest’s future wasn’t assured. With a city guarantee that GulfQuest will stay up and running, they’re ready to pitch in, he said.
The original vision for the facility called for it to serve as a transportation hub, and Dow has long been a proponent of using it as a base for high-speed ferries that would connect Mobile to local destinations such as Fairhope and Gulf Shores. Stimpson said on Tuesday that he too thinks that’s a critical step in realizing GulfQuest’s potential.
“We do have to have a ferry,” Stimpson said after Tuesday’s meeting.
Stimpson speculated that in the years ahead, sources such as money from the RESTORE Act — which governs the use of penalty funds from the Deepwater Horizon disaster — might help fund relevant infrastructure such as a terminal on the Eastern Shore of Mobile Bay.