WOW bond offer accepted; museum regains stability

Museum still needs an attendance increase to survive on its own

by Eric Olson

SBJ Reporter

eolson@sbj.net

As Wonders of Wildlife interim director Max Peterson describes it, Feb. 9 was the most important day in the short life of the Springfield fish and wildlife museum. WOW officials learned late that day that the museum would survive: a required majority of the museum's bondholders agreed to the Jan. 22 tender offer, eliminating the immediate possibility of bankruptcy and closure.

The action reduces WOW's debt from $36.19 million to $11 million, and drops debt service interest rates about 5 percent, Peterson said. The end result is a 90 percent savings on annual debt service: from $3.8 million to about $400,000.

"I'm delighted about what's happened," Peterson said the day after the news came in. "We can set our sights on the future now, instead of worrying about whether we are going to survive."

Bondholders will receive 60 cents per dollar on the face value of their bonds when the museum district that owns WOW buys back the bonds. The settlement date is Feb. 26, Peterson said.

Between 90 percent and 91 percent of the approximately 1,500 bondholders agreed to sell their revenue bonds back to the museum by the Feb. 9 deadline, Peterson said. If 95 percent of the bondholders had agreed, the museum district would have paid 70 cents on the dollar for the bonds, according to the museum's tender offer. Based on the tender offer, the remaining bond holders are compelled to sell their bonds back to the museum at the approved rate.

Refinancing is possible from $10.3 million in private donations from Bass Pro Shops founder Johnny Morris and his companies Bass Pro and Tracker Marine. Also, $11 million in letters of credit from Morris are securing the new variable rate demand notes that will back the museum. Peterson said the new notes carry varying interest rates typically between 2 percent and 3 percent, down from 7 percent on the revenue bonds.

New projections

But while restructuring the debt paints a prettier financial picture in the short term, the attendance code must be cracked for the museum to prosper. Peterson said the museum board and staff are aware of the challenges that lie ahead.

"We will continue to have some challenges until we can get the attendance up," said CFO Peggy Smith.

Revised projections say the museum needs 300,000 visitors annually to break even. That's about 50,000 more paying customers than there were in 2003 and 600,000 fewer than initial projections for 2002, the museum's first full year of operations.

"It's not a cakewalk," Peterson said.

Museum officials are hoping construction of an IMAX theater, a conservation education center and a connection to Bass Pro will help boost attendance. "That should be well within the capability of the museum," Peterson said of the new attendance mark, once those three projects come online.

Moore said a timeline for those projects would be set soon. But most likely Peterson will not be around to guide the staff through those phases. That will be the job of a new executive director, whom Board Chairman John Moore said should be named within a month. Moore, Drury University president, also chairs the museum's search committee.

Moore said the search is nearing completion.

"We're talking to one individual," Moore said. "There is no hang up; I would expect by the time we complete the restructuring of the bonds that we would be in a position to announce the new executive director.

"Max hopes so," Moore added. "He wants to go back to retirement."

Peterson has been on the job nine months. When he replaced former director Fred Marty, who resigned May 2003, Peterson expected to serve about three months.

"I have been here three times as long as I thought," Peterson said. "If you asked me last May if I wanted to come here for 10 months, I would have said no."

Museum board members intended to have a new director named by August of last year, but Moore said restructuring the museum's debt took precedence. "We needed to get this done," he said.

Museum officials and board members are discussing ways of expanding its interface with young people.

"We've got to do things that keep the place refreshed and interested to people that have already been there. We have done some preliminary work on just what that will look like," Peterson said, naming seasonal and holiday events, and rotating interactive exhibits, such as the Lewis and Clark exhibit that will be at Wonders of Wildlife April 17-25. It is a National Parks Service traveling exhibit and will set up in a tent outside the museum.