A key portion of funding for the emerging Heritage Harbor Museum is being held up by the Providence City Council, which says it has numerous questions about the project's financial underpinnings. In fact, the council is asking the museum to give the city $10,000 to hire an outside expert to study the museum's figures and projections.

At stake is a $9 million loan from the US Department of Housing and Urban Development (HUD), which would be backed by the financially strapped city. The museum has proposed paying back the loan with a $2 surcharge on tickets, while also using a $2 million federal "brownfield" grant to help the payback plan.

But in a letter signed by councilwoman Balbina A. Young, chair of the council's urban renewal, redevelopment, and planning committee, and councilman Kevin Jackson, chairman of the finance committee, the council says it has questions about the museum's finances. For example, council members say, "Revenue sources appear to be well under what it will take to complete Phase One of the project."

R. Mark Davis, executive director of Heritage Harbor, says it will cost $59 million to open the museum, designed to showcase Rhode Island's contribution to the Industrial Revolution and to explain the role of various ethnic groups in creating modern-day Rhode Island. Including $5 million in state bonds approved by voters in November, the museum has about $43.5 million of the money needed, Davis says. Since passage of the bond referendum, the museum has intensified discussions, he says, with potential private donors and foundations.

The council also wants more information about the museum's projected annual attendance of 300,000 visitors. And it says that the city's department of planning and development is concerned that the museum has raised only $10,000 in endowment funds. Finally, the council says, it is concerned whether, in case of a complete failure of the museum, its building and property will be worth enough to pay off the loan.

The concerns are similar to those recently raised in the Phoenix (see "Museum piece," News, December 6, 2002), which found that some critics believe the museum's attendance figures and other projections are overly optimistic.

While the property, a former electrical power plant, occupies a key spot on the city's improving waterfront, city planning director Samuel J. Shamoon says the Narragansett Electric Co. deed limits use of the site for 100 years to tourist or visitor activities.

The council's questions were prompted in part by a review of the HUD loan application by the administration of then-acting mayor John J. Lombardi, which bridged the gap between former mayor Vincent A. Cianci Jr. and the newly inaugurated David N. Cicilline.

Davis, the museum CEO, said he believes that most of the city's questions can be resolved in a meeting between city and Heritage Harbor officials. After such a meeting, Davis says, the museum will be in a better position to respond to the city's request to pay for an outside consultant.

Heritage Harbor is scheduled to open in the fall of 2005.

Issue Date: January 10 - 16, 2003