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No Substantial Break-Through in Hall Plight
Posted By Bruce Hampson On March 16, 2011 @ 12:02 pm In Breaking News | No Comments
Faced with the “very real” prospect of closing the doors to the RV/MH Hall of Fame due to dwindling cash reserves and looming debt payments, administrators of the Elkhart, Ind.-based facility held a summit meeting Tuesday (March 15) with RV industry executives to explain the institution’s financial plight, discuss possible future revenue streams and, openly, ask for assistance.
“The Hall of Fame is up against it,” said Bill Garpow, who was voted in as chairman of the RV/MH Heritage Foundation Inc, in January. “We need to tell you exactly how we got here. We also need to tell you what our plans are for the future and see if we can garner some help.”
While the meeting provided no substantial break-through in the museum’s long-term picture, Hall of Fame Executive Director Tom McNulty told RVBusiness afterward that it did proceed “pretty much like I anticipated it would. We didn’t expect that anyone was going to throw $5 million at us. It’s going to be long-term. Unfortunately, we don’t have long-term; we need action now, a cash infusion to keep us active. I think we have enough friends out there that will do that — we just had to get the message out. We had to let people know the kind of situation we’re in. Now that the information is out there, we can proceed.”
According to museum staff, the facility requires between $40,000-$41,000 per month to stay afloat and currently only has cash reserves to see it through the end of April. It has an immediate need of $320,000 to support operations through the end of 2011, and needs to quickly address a pending debt reduction of $5 million.
About 50 individuals from throughout the industry, along with local governmental officials and bankers, attended the meeting, while others — including Bob Olson, co-chairman of the Go RVing Coalition and chairman and CEO of Forest City, Iowa-based Winnebago Industries Inc. and John Hanson, chairman of the Hanson Family Foundation — listened through a phone link as executives of the foundation outlined the facility’s precarious financial situation.
Garpow, who also serves as executive director on a full-time basis of the Recreation Park Trailer Industry Association (RPTIA), was joined on the dias by foundation historian Al Hesselbart and McNulty, who recently replaced Carl Ehry as head of the foundation’s four-person staff.
According to Garpow, the Hall of Fame — which was permanently located in Elkhart in 1985 and moved to its present location in 2005 — has been, until fairly recently, debt-free. “There have been no tax dollars, or government assistance, that has gone into this facility,” he said. “It was 100% contributed by members of the industry.”
That changed in 2006 with “phase two” of the hall’s construction, initiated when Teton Homes founder Robert “Boots” Ingram connected the hall with David Woodworth and his collection of pre-WWII RVs. Ingram passed away late last year.
“’Boots’ Ingram was a very gracious man who did some phenomenal things that are hard to believe, really,” McNulty added. “When Boots helped us to secure the Woodworth collection, we then had to add on the Ingram Hall, the Grand Hall and the Champion’s Hall. At that time we didn’t have the money, and Boots graciously said, ‘I’ll give you $2 million, interest-free.’ During the course (of construction), there had to be some changes implemented, architecturally and aesthetically, to satisfy the requirements of the displays. So, Boots offered to loan us another million dollars.” The facility also established a $900,000 line of credit through 1st Source Bank.
The combination of monthly payments on the loans, combined with the economic downturn — “We didn’t have as many admissions, and we weren’t renting the hall as often as we were earlier,” McNulty admitted — has led to a severe cash shortfall for the facility. The Ingram loans, due in 2012, also loom on the horizon and the hall still owes Woodworth $750,000 on its purchase.
“You can say we got into this by allowing the Woodworth collection to be purchased and by building the space to house it,” McNulty said, “but the museum wouldn’t be the same without it.”
The hall’s projected 2011 finances, along with potential new sources of income, were outlined in a PowerPoint presentation — along with three possible scenarios envisioned by the hall’s executive staff. Potential outcomes range from a cash infusion of $2.2 million or more, which would allow the foundation to retire the bank loan and reduce the debt to the Ingram family, thereby reducing monthly expenses by $16,500, to a “scorched earth” alternative where the foundation explores the sale of the real estate and facility “to an organization or individual willing to be our landlord which allows the foundation to continue to function with agreed buy-back opportunity.”
“With the economy the way it is, if we’re forced to sell I don’t think we could get 50 cents on the dollar,” McNulty said. “That’s a sad commentary, but it’s reality.”
McNulty also showed the audience an artist’s rendering of the current facility alongside the museum ground in finished form, including additional buildings and paving of the location’s 25 acres.
“It’s our opinion that if in fact we were able to finish our construction, adding a cafeteria, a catering kitchen and a conference center seating 1,000 people, we would really have something,” he said. “There’s nothing within a radius of 100 miles that can accommodate 1,000 people on one floor. I’m not saying that we can do it immediately … but it shows that we do have a plan.”
According to information provided by the foundation, the facility has already trimmed expenses for 2011 by an estimated $227,600, to a projected $592,300, while increasing income sources. Income generated by room rentals, for example, already is nearly double the $100,000 earned in 2010.
However, the hall still faces a shortfall this year of $320,000. As noted in the presentation, much of the 2011 income deficit is attributable to funds being held in abeyance by the Go RVing Coalition which contributes $200,000 annually to the hall’s operations and, in return, has a prominent display at the facility. The coalition has provided the hall with $100,000 in payments for 2011 thus far.
“I talked with Richard (Coon, president of the Recreation Vehicle Industry Association) Friday,” said Garpow. “He said that, from a ‘due diligence’ standpoint, he has to be assured that the Hall of Fame is going to survive. He doesn’t want to send good money after bad. If we can convince him that the organization is going to be around and will be functioning in the future, he’ll be glad to continue their contribution. Right now, he said ‘I’ve got to be convinced of that, and I’m not.’ He asked that we send information to him after this meeting to convince him of what we’re doing, that we intend to be around and we’re going to make it happen.”
This elicited strong remarks from at least one member of the audience, Camping World Chairman Marcus Lemonis.
“I think the hall needs to see its money; if the commitment was made, the check needs to be written,” said Lemonis. “They are not a manager of the hall, they are not a board member of the hall — for them to decide they want to see something before they send their check is wrong. The commitment was made. That particular amount of money is what’s taking you to your knees right now.”
The Go RVing Coalition is owned equally by RVIA and the Recreation Vehicle Dealers Association (RVDA). Coon, as RVIA president, oversees the coalition’s expenditures.
Contacted afterward, Coon issued this statement:
“Some points of clarity regarding the ongoing relationship between Go RVing and the RV/MH Hall of Fame.
To position Go RVing as responsible for the current financial situation of the RV Hall is simply not accurate. As of October 2010, and through March 2011 (Go RVing operates on an October Fiscal Year), Go RVing has sent the Hall $100K as part of Go RVing’s FY 2011 overall sponsorship of its presence in the Hall and the I-80/90 Interstate digital billboard. We are up to date on our sponsorship payment.
“Go RVing is a coalition driven and funded by the members of both RVIA and RVDA (Mike Molino and I serve as the officers of Go RVing). At the behest of our respective Boards of Directors, we have asked for a detailed business plan from the Hall given their current financial situation and questions about their solvency. We look forward to receiving and reviewing the Hall’s plan to best determine if Go RVing will receive the exposure detailed in our current sponsorship agreement.”
Lemonis also offered to throw the support of Camping World behind the effort to keep the museum operational.
“I look at this differently than most people,” he said. “I don’t see this as a business. I look at this as the faceplate of our industry. If this closes, it’s going to be bad for us as an industry … If this goes out of business, it’s worse than a manufacturer filing bankruptcy. It makes our industry look weak.”
“I’ll write a check myself, personally, and I expect other people in this room to write a check — because without this hall, we’re in trouble,” he continued. “And I’m willing to be a tenant here. If you want to put a Camping World accessory store here I’m willing to buy some of the land and put up a building. I’ll do what it takes and I think everyone else should do what it takes, because if this place closes there’s no recovery.”
That opinion was shared by Bob Fields, vice president of sales and marketing for Aridian Technology Co.
“I just moved into the community in November,” he said. “I came here with my wife and met Tom, then met with him again the next week and wondered, ‘what can my company do to get involved?’ Because we definitely recognize what this (place) means to consumers. I think what Tom and the group need today — yea, they need money, but they also need the passion that I’m seeing displayed and the involvement of people. That actually can bring as much, if not more, to the party if we can get a good group of people to be committed to the hall. Give them the support, the ideas, the leads — I think each of our companies probably has a substantial database of consumers that have never even heard of this place. Whatever we can do to help promote from that perspective is going to go a long way.”
According to Garpow, there is a possibility that Foremost Insurance will be giving the museum a $1 million grant. The administrators also have been working on attaining a $5 million, 30-year, low-interest loan from the government, “But it’s basically on hold until we can determine how we’re going to handle this debt.”
As McNulty noted in closing the meeting, “I think it’s fair to say that a museum is never going to be totally self-sufficient. We’re going to have to have donations along the way, along with the heavy programs necessary to make this work. But this is too nice of a place to let it go. There’s too much potential here.”
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