After building the U.S. Olympic & Paralympic Museum and Hall of Fame for double the cost of the original estimate of $45 million, museum board members want $3.5 million from the city’s American Rescue Plan allocation. The money apparently is needed to plug a revenue hole caused by a lack of paying visitors due to the COVID-19 pandemic.
Although Mayor John Suthers and his staff didn’t reveal the request during a June 10 retreat with City Council at Colorado Springs Airport, Mayor’s Chief of Staff Jeff Greene confirmed to the Indy the museum’s request.
The city will receive roughly $76 million from the $1.9 trillion ARP, aimed at helping local governments fund public health needs, address negative economic impacts caused by the pandemic, replace lost public sector revenue, provide premium pay for essential workers and invest in water, sewer and broadband infrastructure.
The category of spending from which the museum’s allocation would be drawn is business development/economic recovery, for which Suthers is proposing to spend $14 million.
Greene told the Indy that criteria must be developed for those choosing to apply for an allotment. Those criteria will include how applicants’ requests would impact the community.
The museum is a signature project for the city, which has branded itself Olympic City USA, and was the first to open of five venues that comprise the City for Champions tourism venture launched in 2013 with $120.5 million in state sales tax rebate money over 30 years. The others are the William J. Hybl Sports Medicine and Performance Center at the University of Colorado at Colorado Springs, which opened last year; the yet-to-be-built Air Force Academy visitors center; Weidner Field in lower downtown that recently opened, and Robson Arena at Colorado College, still under construction.
While Greene said there’s no guarantee the city will grant the museum’s request, he noted, “The Olympic and Paralympic Museum is of the utmost importance to Colorado Springs, because it was a project component of City for Champions.”
Two Council members told the Indy that if such an allocation is approved, some mechanism for accountability should be required.
Suthers proposes to spend $10.56 million of the ARP money to replace irrigation systems at the city’s two golf courses and cemetery; build a new senior center at its current location on North Hancock Avenue, $8 million; create a “family success center” in the city’s Southeast sector, $1.5 million; construct stormwater improvements on North Nevada Avenue, $8.3 million; and fund a pay increase and bonuses for city workers, costing roughly $6.5 million, among other spending.
The museum’s CEO Chris Liedel, who had previously worked for Smithsonian Enterprises, the revenue-producing arm of the Smithsonian Institution, and National Geographic, was recently removed and local businessman Phil Lane installed as CEO indefinitely, The Gazette reported.
A museum spokesman didn’t return a call seeking comment, but Greene suggested the city would scrutinize use of ARP money by the museum or any other nonprofit that seeks funding. Those could include other “cultural arts facilities,” such as the Ent Center at the University of Colorado at Colorado Springs, he said.
“For any organization that will submit an application for financial assistance regarding ARP funds, the city will coordinate and make sure these funds will be expended per the financial requirements,” he said. “There’s been venues that have approached the city, nonprofits, with regards to financial assistance.”
The Pikes Peak Center and the Broadmoor World Arena are not among those, however, he said, though such operations could seek help from the city or from El Paso County, which will receive about $140 million from ARP.
Greene indicated that if the city allocates $3.5 million to the museum, the city would want to learn more about the museum’s marketing and promotion plan.
The museum has been tight-lipped about its visitor numbers since it opened in July 2020 amid the pandemic. It would be no surprise if its visitor counts trail predictions, especially given the virus’ undermining of the local and national tourism trade. Hotel occupancy here and across the country plunged last year.
When the city applied for state money in 2013 to help fund City for Champions, its application predicted the museum would draw 350,000 visitors a year, or more than 900 per day, a forecast some people viewed with skepticism.
That figure was challenged by Economic & Planning Systems Inc., a consultant hired by the state to conduct an independent analysis of the city’s application on behalf of the Colorado Office of Economic Development and International Trade (OEDIT).
That analysis concluded that while “potentially achievable,” the forecast of 350,000 visitors annually was “aggressive, given that each comparable is located in a metro area with nearly two to over 8 times the population of Colorado Springs.”
For example, the International Spy Museum in Washington, D.C., attracts 700,000 visitors a year, but its population is 5.6 million. The National WWII Museum in New Orleans brings in 375,000 visitors annually, but its population is 1.2 million and the city is “an international tourism destination” on its own.
EPS also noted, “The Applicant estimates that 82 percent of visitors will be from outside Colorado. EPS adjusted this figure down to 60 percent as a more reasonable, although still high target.”
To make its point, the consultant wrote in the 2013 report: “The Denver Art Museum, housed in an iconic building designed by Daniel Libeskind, drew 589,000 visitors in FY2013 with 13.9 percent from outside Colorado.... The Denver Museum of Nature and Science draws 1.3 million visitors, with 17.3 percent from outside Colorado. These data suggest that the Applicant’s 82 percent out of state visitor figure may be overly optimistic, given the City and State’s geographic location.”
OEDIT, however, granted the city’s request, with the museum getting the biggest chunk under the Regional Tourism Act funding tool. It was allocated 42 percent, or roughly $50 million. Museum backers raised substantial sums from private donations as well, and fundraisers originally pegged the cost at $45 million, with a $10 million or higher contingency fund. But the unusual silver structure, which contains state-of-the-art visuals and technology, saw its cost spiral to $90 million.
When City for Champions was conceived, local officials pledged not to use general fund dollars on the venues. Although ARP money comes from the federal government, City Council must appropriate the funds.
Council President Tom Strand says in an interview he wants to do more research before deciding whether to support a museum allocation.
“They’ve had a lot of costs to open up, and they never had the attendance they needed to support that operation. They didn’t have a lot of tourism last summer,” he says.
The museum charges $24.95 for an adult admission and $14.95 for children ages 3 to 12. Younger children get in free. Seniors, military and first responders pay $19.95.
Should the museum’s request be funded, he says, “I would want to see a quarterly update on what it was needed for, how it was used and how the museum was successful with it, so that we could kind of keep a close eye on it and make sure everything was properly used for the right purposes.”
Councilor Richard Skorman says he’s “leery of putting that much money toward a venue that has access to an endowment,” unlike many other small venues, such as comedy clubs and other small businesses. He’d favor giving consideration to helping arts venues without other means of support.
Councilor Bill Murray, who didn’t attend the June 10 meeting, says he’s opposed to providing ARP money to nonprofits because it sets up the city to pick winners and losers. But if the allocation is made, Murray says the city should retain the ability to audit the museum’s books for “at least five years.
“Make no mistake,” he says, “This is taxpayer money.”
Suthers earlier said the ARP money will be allotted to needs for which there is no other available funding, for things that would have a positive impact on local citizens and for spending that would help with economic recovery.
Suthers’ proposal to spend ARP money on golf courses drew some skepticism, but the mayor said there’s no other source of funding for systems that have aged out and no longer perform efficiently.
After voters approved Issue 300 in 2009, which bars the city from accepting money from enterprises or giving them city money, there’s no way to supplement budgets of Patty Jewett Golf Course, Valley Hi Golf Course or Evergreen Cemetery.
If the city built the costs of replacing the irrigation systems into greens fees, no one could afford to golf there, Suthers said, and bonding agents refuse to underwrite debt guaranteed by greens fees alone.
“Golf courses are not attractive to investors,” the city’s Chief Financial Officer Charae McDaniel said.
And Suthers added, “This is an opportunity to clean that problem up.”
But Councilor Nancy Henjum, whose District 5 includes Patty Jewett, said, “It’s tough optics.”
She acknowledged, though, that Suthers’ plan also includes $2.4 million for projects that will impact Meadows Park, Hillside and the Westside community centers and after-school programs held there.
Skorman said the project will eventually save those enterprises money and noted the two golf courses are among the busiest public courses in the state.
Suthers’ plan also proposes to spend:
• $8 million to build a new senior center at Golf Acres shopping center. The project includes a plan to sell some of the land at the center, owned by the city, to a developer to help fund a new center. Adding levity to the serious tone of the meeting, Greene quipped, “Seniors have promised me a silver tsunami if we ever closed that facility.”
• $8.3 million on a stormwater project on North Nevada that would enable the corridor to further develop as a research and development technology area;
• $3 million on 30th Street stormwater improvements;
• $3.5 million on Colorado Springs Utilities water and wastewater projects;
• $1 million on a fiber connectivity study and implementation;
• $7.2 million to chip away at the city’s capital improvement backlog;
• $5 million on the Police Department’s computer dispatch system;
• $2.5 million to rehabilitate City Auditorium; and
• $2 million for COVID-19 emergency response, including vaccine support.
Council plans a work session to delve more deeply into Suthers’ ARP spending plan, which ultimately will total roughly $125 million when federal dollars for transit and the airport are added.
An appropriations ordinance requires two votes, and McDaniel predicted those votes would occur in August or September.
The ARP requires the city to obligate the funds by Dec. 31, 2024, and spend the money by Dec. 21, 2026.