Tar Heel Tattler - June 2007

Slips shape image of museum group
- Frank Maley

Any publicity, they say, is good publicity. Backers of the North Carolina Maritime Museum in Beaufort might not be so sure after their experience with Pepsi Americas’ Sail 2006. They went into the weeklong event with expectations as high as the masts of the tall ships that took part. But they came out awash in red ink and with a black eye — the latter, courtesy of a recent state auditor’s report.

When Beaufort was picked to host the event, the nonprofit Friends of the Museum saw an opportunity to raise money and the state-owned museum’s profile. It dredged up $1.4 million in sponsorships and guessed that it would net more than $2 million, largely from ticket sales. It guessed wrong. Ticket revenue fell short — partly because fewer ships than expected showed up — and the event lost $1.8 million. The last ship had barely left the dock in July before bad publicity washed ashore.

First, the State Ports Authority and Department of Transportation came under fire for taking a ferry out of service briefly for a VIP cruise at the event (Tar Heel Tattler, September 2006). Then late last year, rumblings of financial bungling began. In April, a report by State Auditor Leslie Merritt’s office ripped Friends of the Museum for unrealistic financial forecasts and failure to control costs.

That wasn’t all. The nonprofit, along with state agencies, got dunked for a land deal gone awry. In 1997, it bought 36 acres for $3.2 million — mostly state money — for museum expansion. The nonprofit’s board and the Council of State voted to transfer the land to the state in 1998, but the deed was never recorded. About 6 acres were transferred in 1999, but no timetable was set for the rest.

After the nonprofit acknowledged its losses for Pepsi Americas’ Sail to state officials, it struck a deal for the state to take the property and pay off debts from the event and for property improvements, which together exceeded $5 million.

To make matters worse, the group paid public-relations firms and advertising agencies nearly $750,000 to publicize the event. Merritt questioned why some of those companies worked without contracts. “The absence of signed contracts allowed major service providers to escalate costs throughout the planning of the event and prevented event organizers from controlling costs,” the audit says. On the other hand, it helped get them noticed.