State helps keep Mystic Aquarium afloat with $7 million loan
Mystic — Facing the prospect of closing its doors permanently due to the COVID-19 pandemic, which forced businesses in Connecticut to shutter for several months, Steve Coan, Mystic Aquarium's president and chief executive officer, asked Gov. Ned Lamont if the state would give the nonprofit organization a $10 million loan.
Probably not, Lamont initially told Coan.
But after several months of negotiations with the governor and David Lehman, commissioner of the state Department of Economic and Community Development, who Coan said insisted the organization raise money from the private sector and reduce its overall debt, the state agreed to give the aquarium a $7 million loan.
The loan was announced Tuesday as part of a $31.5 million financial restructuring that aquarium officials said will enable the organization to keep its doors open and continue to operate long after the COVID-19 pandemic is over.
"As COVID-19 hit, it became apparent that we needed to restructure, that we were going to need help, and it had to be something more than a bailout. It had to be a fundamental change in the way our structure worked," Coan said Tuesday during a press conference at the aquarium.
The plan also includes the elimination of $14.5 million in long-term debt with Webster Bank and $10 million in private donations raised by the aquarium's board and others.
"It's very important from the state's perspective where tourism is 7% or 8% of our overall economy. We want to make sure the center piece for our tourism economy continues to be alive and thrive for the next generation," Lehman said. "That was a big part of the dialogue and reaching a deal."
The aquarium, which has long been one of the most popular tourist attractions in the state and an important part of the local economy, usually has 800,000 visitors per year, 60% of whom come from out of state.
About 80% of the aquarium's budget is covered by admissions revenue, which it did not receive during the three-plus months it was closed to the public, and the rest comes from grants and donations. In late May, 16 state legislators from southeastern Connecticut asked Lamont to provide at least $5 million in state funding to enable the aquarium to keep operating.
The organization has long-term debt dating back to a project in the 1990s to expand and renovate the facility.
"We've worked to take that down over the years, but it was not sustainable given the current attendance rate or projected future rate," Coan said.
The state will have two representatives on the aquarium's board — one focused on business and finances and one focused on tourism — "so long as it is a lender," Lehman said.
The aquarium closed to the public on March 17 due to the COVID-19 pandemic and reopened on July 1 at 50% capacity.
But unlike other businesses in the state, it could not shut down completely given it has 5,000 animals it must take care of on a 24-hour basis. That alone costs the aquarium about $1.5 million per month, Coan said.
The aquarium employs about 200 full-time workers and 100 part-time workers. Initially, the aquarium furloughed 80% of its workforce, but has since brought some of them back. Coan said the organization's workforce is currently 60% of what it was before the pandemic.
Asked how the state would respond to similar requests for aid from other nonprofits, Lamont said, "I didn't want to just throw money at this situation."
"I wanted to put in place a structure that allows the aquarium to prosper going forward. That means you have to fundamentally change the financial structure here and that's just what we did," he said. "... We're not just going to throw money at those situations, but we are going to find ways to help them get back on their feet and power through until our economy gets back at 100%."
Lamont said he would be rolling out "similar strategies" this week in which Connecticut could serve as a "partner or a bridge" for businesses "as we get our economy back going again."
As Lamont spoke inside, a group of protesters gathered outside the aquarium calling on the governor to fully reopen the state's economy and criticizing him for ordering students to wear masks while at school.
One of them, Aaron McCool of Naugatuck, said he's tried unsuccessfully to reach the governor to talk with him about requiring his 3-year-old daughter to wear a mask while at preschool. He insisted that there's "no science" behind the idea that wearing a mask helps to prevent the spread of COVID-19. A broad array of public health experts and scientific evidence have shown that mask-wearing slows the spread of the disease.
"He doesn't have to agree with me but he should call me back," said McCool, who was part of a group of anti-mask protesters who confronted Lamont at an event in Berlin last week.