After Opening In October, National Law Enforcement Museum In Financial Distress
The National Law Enforcement Museum opened in October in Judiciary Square, with the support of former U.S. presidents and movie stars, but the museum is already struggling financially.
The museum's attendance figures have been well below its goals, and the foundation that operates the museum is headed for default on a portion of the $103M it borrowed in 2016, Bloomberg reports.
On a January call with its bondholders, the National Law Enforcement Officers Memorial Fund officers detailed the challenges it is facing, according to a transcript published by the Municipal Securities Rulemaking Board. The organization reported a $1.9M operating loss for Q4, attributed to disappointing revenue.
Initial projections for the museum estimated 420,000 guests would attend every year. It later revised projections for its first year to 300,000 guests. But in Q4, the museum attracted fewer than 15,000 guests, interim CEO Lori Sharpe said on the January call.
"2018 has turned out to be a poor year for the Memorial Fund in terms of financial performance," Sharpe said.
The museum has been forced to cut costs to deal with the low attendance. It reduced staff by 12% in January, Sharpe said. In addition, she said the museum cut security resources and raised the ticket price from $20.95 to $21.95.
As a result of its underwhelming revenue, the fund failed to pay $460K of interest on its bonds that was due Jan. 2, Sharpe said.
The memorial fund is projecting a $5.6M net operating loss from the museum for 2019. Unless the museum significantly improves performance, there will be no money available to pay interest on the bonds this year, the memorial fund said. The next payment is due July 1.
In an attempt to mitigate the losses, the memorial fund will focus on improving its fundraising efforts.
"The key to the Memorial Fund's success historically has been philanthropy," Sharpe said. "It is clear that we need to be more resourceful going forward if we're going to be able to maintain a stable operation and honor our debt service obligation."
The museum opened in October at 444 E St. NW, featuring an array of educational exhibits and historical artifacts celebrating America's law enforcement officers. The opening featured appearances from then-Deputy Attorney General Rod Rosenstein, D.C. Mayor Muriel Bowser, actor Clint Eastwood and taped remarks from former President George Bush.
The National Law Enforcement Museum is not the first paid museum to experience challenges in D.C., a city with a host of free museum offerings. The Newseum decided to sell its Pennsylvania Avenue building in January after facing financial challenges.