Civil Rights Museum Seeks Financial Help From City | Eastern North Carolina Now

    Publisher's note: The author of this post is Sam A. Hieb, who is a contributor to the Carolina Journal, John Hood Publisher.

    Debt service payments and lagging revenues threaten Greensboro landmark

    GREENSBORO  -  It's been more than 50 years since four North Carolina A&T State University students made history by taking a seat at the segregated Woolworth's lunch counter in downtown Greensboro.

    Today the Woolworth's is no longer a dime store, but the site where the historic sit-in movement was born is still the center of controversy.

    In 2010 - the 50th anniversary of the sit-ins - the International Civil Rights Center and Museum opened at the newly renovated Woolworth's location. The celebration was broadcast live on local television stations. The Rev. Jesse Jackson was in attendance. It was a day of remembrance for Greensboro, the state, and the nation.

    But more than three years later, the museum finds itself in dire financial straits and is asking the City of Greensboro for help. Without that help, museum leaders say, the danger is real the museum could shut its doors.

    City leaders and residents have made it clear they want the museum to succeed. The question is whether taxpayers should bail it out, either in the form of a grant or a loan.

    That question was debated during a recent City Council meeting. The museum is asking for $1.5 million in funds to help it get through a difficult - and complicated - period during which it must retire millions in debt owed to satisfy earlier tax credit requirements from the federal government.

    "If we meet the New Market tax credit obligations, everything's fine," former state Rep. Earl Jones, a museum founder and board member, told the council. "If we don't, it is not."

    In preparation for the museum's request, the City of Greensboro did its own audit based on documentation the museum provided. The audit concluded the museum has a staggering $30 million debt.

    The museum has "experienced financial challenges with debt service payments coming due and trying to lower operating expenses and overhead costs while experiencing declining donations and revenues," the audit reads.

    Making matters worse, the audit also notes the museum property took an $8.7 million loss between book value and fair market value.

    Since its high-profile opening in 2010, museum attendance has lagged. In 2012 the museum attracted a mere 57,000 visitors - far short of the projected 200,000 visitors annually.

    Leadership also has been a question mark. The museum board chairman is former Guilford County Commissioner Skip Alston, who has been no stranger to controversy during his 20-plus years in local politics.

    Following calls from two local media sources - the African-American publication Carolina Peacemaker and Greensboro News & Record columnist Allen Johnson - for Alston to step down, he announced his resignation as board chair hours before the City Council meeting. Alston will, however, remain on the museum's board.

    Alston did not respond to a request for an interview. But he told the council that a new chairman is "just what the museum needs at this date in time."

    Council discussion and debate grew even more complicated when wording in the agenda changed from a $1.5 million grant to a loan. As a result, the council ended up voting to table the issue and take it up again, possibly at its Sept. 3 meeting.

    While a majority of council members most likely favor a loan over a grant, allowing the city the possibility of getting its money back, setting the terms of a loan was a complicated issue the council did not want to approve immediately.

    "You can't just shift gears and call it a loan when we don't know what the details are," council member Tony Wilkins said in a phone interview. "I wouldn't consider a grant with the knowledge I have now. If we could come to terms on a loan, I would listen with an open mind, but I wouldn't even consider a grant."

    "If anything happens, it will be a loan," council member Nancy Vaughan said in a phone interview. "I don't think the vote [for the grant] would have passed, so this gives us some opportunity for more discussion."

    Just how transparent the museum has been about its financial records is also in dispute. The city audit praised cooperation on the part of museum chief financial officer John Paine in providing information, and museum officials also allowed the media and Mayor Robbie Perkins to sit in on a conference call with its lenders.

    The problem is, no matter how much information the museum has provided, it still hasn't provided an official third-party audit - which the museum is asking the city to fund.

    "There's absolutely not enough information, and it's unrealistic to go to the city and ask for a $1.5 million loan when you don't have your last three years' audits," Wilkins said. "Go to a bank and ask for that and see how far you get."