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Financing dreams: Museum money man talks about how

July 23, 1999

The proposal to create a National Civil War Museum in downtown Hagerstown is the most exciting idea that's come along in 10 years, an idea with the potential to literally recreate the center city as a gathering place for tourists and scholars. But the price tag - $30 million - has a number of people looking at the project skeptically, which is all right with Rich Bellis.

"Skeptics are good, cynics are bad," said Bellis, a principal with Education Capital Advisors of Fairfax, Va. and one member of the Antietam Creek Coalition, the group that's trying to build the museum. Bellis' job with the coalition will be to take the proposal to the Wall Street market, to find investors willing to buy the bonds that will finance construction of this facility.

To me and to some of my colleagues in the newsroom, the idea of a museum funded with bond money doesn't seem quite right. In my limited experience with museums, it usually seems that they begin, like the Civil War Medical Museum in Frederick, with somebody's collection of artifacts and a grass-roots fund-raising effort.

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Not always, says Bellis, who says be spent "the better part of 10 years" working to help museums and other non-profits get bond financing as an officer of First Chicago.

"Every major museum in Chicago has issued debt to finance expansion," Bellis said. The Children's Museum of Chicago, for example, expanded from 5,000 to 50,000 square feet with bond financing, Bellis said, adding that attendance there went from 20,000 patrons a year to 40,000 patrons a year.

Asked if any of the Chicago area museums was a start-from-scratch facility like the one planned for Hagerstown, Bellis said no. Most of those institutions were 75 years or older, he said, pre-dating the time when bonds were used for such facilities.

But Bellis added that he had helped obtain financing for two other facilities, one of which qualified as a "true start-up museum."

It was called "JFK Health World," Bellis said, and it is a learning museum that teaches children about health care and related issues.

"There's a big exhibit on train safety," Bellis said, explaining that the Health World program was designed as "a way to give schools (the ability) to out-source their health education."

Annual attendance was projected at 300,000 visitors a year when it opened in 1996, and the number came in right around 285,000, which was fairly close to the target, Bellis said.

The other start-up was the College Football Hall of Fame in South Bend, Indiana, which Bellis said was a surprise in part because many people couldn't believe that there wasn't a facility of this type already in existence.

If bond holders are going to be repaid, the museum needs income. Bellis said there are several different sources.

"One is admissions, the other is donations and the third is sponsorships, which may or may not be applicable to the Civil War museum," he said

In places like the College Football Hall of Fame, Bellis said, big companies like Pepsi or Burger King can sponsor amenities like the theater where visitors are shown a film on the history of the sport, Bellis said.

An important part of getting the facility financed is winning an affiliation agreement with the Smithsonian Institution, which needs assurances that its loaned collection of Civil War artifacts will not only be treated with respect, but also kept in a environmentally controlled facility to prevent deterioration.

To win that affiliation and assure investors that this group is the real deal, the coalition needs to do a study that it's asking the city and county to fund. The city government has signed on, kicking in $37,500, but the County Commissioners want more information.

(In private, some coalition members are frustrated by this stance, since "more information" is what the study would provide. But they're in a wait-and-see mode now, as the county checks out coalition members.)

This sort of thing has been done before, Bellis says, and not because investors have stars in their eyes.

"These investors aren't charities. They will be paid market rates," he said.

Asked how he could assure the county government that this project would succeed, Bellis said he couldn't. The best assurance he can give is that all of the members of the coalition, like Ralph Appelbaum, who designed exhibits for the Holocaust museum in Washington, D.C., are well-known in their fields.

"I don't think they would want to stake their reputations on something that isn't going to be winner," he said.

How much of a winner might it be? The Civil War Medical Museum, with a price tag of $5 million, reported to the National Association of Museums that it drew 55,000 visitors in 1998, which Bellis said was the latest year for which figures are available.

Isn't it possible, he said, that spending five times as much on a facility might yield five times that many visitors? A consultant study will have to answer that question, but though my expertise in this area is lacking, the possible payoff seems worth what, for both governments, is really a very small financial risk.




Bob Maginnis is editorial page editor of the Herald-Mail Newspapers

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