Professional Documents
Culture Documents
Executive
Summary: Under NURFC’s current operating structure, sustainability is an issue. NURFC is
working with the federal government to establish a federal museum and oversight
commission to commemorate the ending of chattel slavery in the United States.
A discussion draft of this legislation was completed in October 2009. Preliminary
terms include the “gifting” of the facility to the United States government and the
United States government, via an appointed board of trustees, operating the
facility in cooperation with the Secretary of the Interior and other federal
agencies. This legislation is not expected to be approved for at least 12 months.
According to NURFC officials, the plan would call for the existing bond debt to be
transferred to another yet-to-be established entity, unsecured, leaving the facility
debt-free (a condition of the federal transfer).
Facility Overview: The Center consists of a 160,000-square-foot facility located on the Cincinnati
riverfront. Features of the facility include a museum, interactive story theaters,
computer networking to other Underground Railroad sites, arts and education
facilities, and a public forum space.
Culture Presented: The preservation and presentation of features of historical interest or significance.
Project Information
Scope: The Freedom Center is a $117.7 million project, opened in August 2004, and features
three pavilions celebrating courage, cooperation, and perseverance. The current
appropriation will reimburse the Sponsor for construction expenses previously incurred
but not yet reimbursed (the “Project”).
Regional Support
Matching Resources
The Sponsor demonstrated a minimum of non-state matching resources equal to at least 50 percent of
the total state funding of $15,500,000 (a minimum of $7,750,000). Matching resources were
substantiated in November 2008. On October 9, 2001, Substantial Regional Support was confirmed by
the Commission in resolution R-01-26. The following table is provided for informational purposes.
Source Amount
Cash-on-Hand $0
Funds Already Expended on Project $0
Irrevocable Written Pledges $0
In-Kind Contributions (up to 50%) $0
Operating Endowment $0
Private Contributions $34,000,000
County Government $0
City Government $4,500,000
Federal Government $12,000,000
Site Valuation $0
Other $0
Total Matching Resources $50,500,000
Minimum Match $7,750,000
Project Need
The Freedom Center is in danger of not continuing as a going concern and, accordingly, the consortium of
banks which previously held the debt for the Freedom Center have forgiven $47M in bond debt in exchange
for approximately $24M the Freedom Center was holding in investments. The net result of the bond
forgiveness is an extraordinary gain of approximately $23M in YTD10. Going forward the Freedom Center
will no longer be responsible for interest expense or exorbitant bank fees. Also, material to the Freedom
Center’s financial position is the adjustment of the carrying value of the building on the FYE09 financial
statement. The previous balance of $78M in FYE08 was written down to $32M in FYE 09 as a result of FAS
144, the GAAP pronouncement applicable to …… Additionally, the Freedom Center continues to operate at
a deficit, as is evidenced by a pre-depreciation, pre extraordinary gain, operating deficit of ($700K) at
YTD10, a pre-depreciation loss of ($3.9M) at FYE 09, operating deficits in previous years and the sponsor
prepared pro-forma indicating pre-federalization losses exceeding ($1.8M) for the out years. Federalization
is the prospect that the facility will be gifted to the Federal Government (free and clear of any liens) and use
the Freedom Center to operate a museum commemorating the ending of chattel slavery in the United
States. And, according to the sponsor, if Federalization takes place the Freedom Center should receive
approximately $3M/year in operating revenues and turnover operating surpluses starting at $1.15M in the
Federal fiscal year opening October 1, 2011. Therefore, when reviewing the Freedom Center’s
sustainability staff heavily considers the probability of a successful Federalization of the Freedom Center.
According to the sponsor, the best available information we have is that Senator Sherrod Brown is backing
the legislation which was discussed in draft form in October of 2009 and the Freedom Center management
is optimistic. However, if Federalization is successful a pending issue regarding cash flow needs being
metuntil Federal funds are received remains. The Freedom Center has expressed a sense of urgency to the
Commission
Although experienced in the provision of general building services at the Facility, the Sponsor has
marginal financial capacity to continue providing general building services at the Facility. In
anticipation of the Sponsor completing the proposed Facility transfer to the federal government,
Commission staff conditionally confirms the Sponsor continue to provide these services as permitted
by section 3383.07 of the ORC.
Appropriation History:
Appropriation Bill Appropriation G.A. Appropriation Comments
Name Number Date Amount
National Am. Sub. 6/24/2008 127 $850,000 Funding this project.
Underground H.B. 562
Railroad Freedom
Center
National Am. Sub. 12/28/2006 126 $2,000,000 Funded construction of the
Underground H.B. 699 freedom center.
Railroad Freedom
Center
NURFC H.B. 16 5/4/2005 126 $4,150,000 Funded construction of the
freedom center.
National H.B. 675 12/13/2002 124 $4,000,000 Funded construction of the
Underground freedom center.
Railroad Freedom
Center
Recommendation: The materials submitted by the Sponsor were reviewed and analyzed, and the
Commission project analyst, project managers, and executive director recommend approval of Resolution R-
10-17 and recommend the approval of the Project and authorization of the expenditure of funds.
Executive Director
Exhibits
□ A Provision of Culture
□ E Financial Statements