Aquarium kept afloat by supporters
Mystic - A small group of organizations and individuals have agreed to pay off $15 million of the Mystic Aquarium & Institute for Exploration's $34 million debt, a suffocating financial burden that may have eventually forced the state's largest tourist attraction to close.
A clearly relieved Stephen M. Coan, the aquarium's president and CEO, outlined the agreement Monday night. He said the five key supporters have also offered to pay off an additional $5 million if Sea Research Foundation, the aquarium's parent organization, can match it with another $4 million. That would lower the aquarium's debt to $10 million, which the facility can handle, according to Coan.
"We were able to put together a wonderful team of people who rallied around this institution," he said. "Everyone involved wanted to not only see this great institution succeed, but thrive."
Coan declined to name the benefactors, whom he called "friends of the institution," but said they would likely be identified once the agreements are signed over the next few weeks.
The agreement comes at a critical time for the institution as the Association of Zoos and Aquariums is slated to begin its five-year reaccreditation process of the aquarium next week. AZA officials are expected to visit the aquarium Wednesday to start that review.
A group of aquarium CEOs, who conducted a preliminary assessment of the aquarium's finances in advance of the reaccreditation, told Coan that without the debt reduction the aquarium's accreditation was in jeopardy.
The loss of accreditation would have caused a number of problems for the aquarium, Coan said, such as concerning government agencies that monitor animal welfare, making it difficult to borrow animals from other aquariums, and causing problems with obtaining grants and attracting and retaining staff.
Coan said publicity about the accreditation loss would have also damaged the reputation of the aquarium, which draws 700,000 visitors annually.
Much of the $34 million in debt, which is financed through Citibank at an interest rate of about 5 percent, is the result of the aquarium's expansion and renovation project in 1997 as well as various short-term borrowing it did in recent years to help meet operational expenses.
At times there were worries about meeting payroll, and bills went unpaid. The marketing budget was cut and improvements were delayed. The aquarium, though, preserved its educational outreach, research and exploration efforts and eliminated just six positions, Coan said. The aquarium continues to employ 200.
The aquarium had restructured its debt on several occasions, but with an annual operating budget of $22 million, the $2.4 million annual debt payment was impossible to meet and the principal could not be reduced. The new debt-reduction plan could reduce those annual payments to as low as $650,000 per year.
"It was improbable that we could have generated enough revenue to cover our debt," Coan said. "It's likely the organization would have needed to take drastic measures or close. It would have been difficult for the organization to be sustainable in the long run."
Coan credited several lawmakers, including U.S. Sens. Joe Lieberman and Chris Dodd; U.S. Rep. Rosa DeLauro, D-3rd District; Gov. M. Jodi Rell; and state Sen. Andrew Maynard, D-Stonington, with helping to put together the coalition of support as well as obtaining additional funding for upcoming capital improvements.
But Coan particularly praised U.S. Rep. Joe Courtney, D-2nd District. Without Courtney's help, he said, the agreement would not have been possible.
With the debt agreement, Coan said the aquarium is in "excellent health" and is proceeding with a $12 million capital-improvement plan that has just begun with the overhaul of explorer Robert Ballard's Challenge of the Deep exhibit. Plans also call for a long-awaited research and education center and the renovation of laboratory and classroom space in the main aquarium into new exhibits.
Coan said the aquarium has already raised $6 million for the project and is working to raise the rest.
The state Bond Commission is scheduled to meet Friday to formally approve $1 million for the work. The aquarium has asked for $2 million.
United Technologies has also pledged $1 million toward the transformation of the Challenge of the Deep into the United Technologies Ocean Exploration Center, which is scheduled to open in April 2012 to coincide with the 100th anniversary of the sinking of the RMS Titanic.
Ballard discovered the Titanic's remains in 1985, and the center will feature his exploration of the ship along with his other expedition work including live interactive broadcasts from his new exploration vessel, the Nautilus.
Coan said no money will be borrowed for the three-pronged project, which is estimated for completion in 2015. He pointed out that it has been more than a decade since the aquarium's last major expansion, and there is a need to modernize the facility and improve the experience for visitors.
Coan said this will help to continue attracting tourists to Mystic, where they will contribute to state revenues through the hotel and sales tax and the local economy by spending money in shops and restaurants. The improvements are projected to boost annual attendance by 50,000, he said.
Coan said the aquarium is also working toward a greater partnership with the National Geographic Society, which has sponsored many of Ballard's expeditions over the years. He said the aquarium is taking over management of Ballard's JASON project from National Geographic, which will add 27 jobs and merge it into its Immersion Learning program.
The JASON project beams live interactive broadcasts to 1.5 million students from an educational expedition Ballard undertakes each year. Combined with a curriculum for teachers and other student activities, it's designed to interest students in math and science careers.
"All these pieces will help us grow the Sea Research Foundation brand and our commitment to research, education and exploration," Coan said.
Leaning back in a chair in his office Monday night, Coan said the aquarium's current financial situation is much brighter now compared with recent times when he worried about what the next month would bring.
"Taking on something like the JASON project," he said, "is a lot more positive than thinking about how to keep the doors open."