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Project Analysis and Staff Recommendation National Underground Railroad Freedom Center
Project Analysis and Staff Recommendation National Underground Railroad Freedom Center
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 expected to pass in 2011.
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.
Sponsor
Background: The Sponsor states, “The mission of the National Underground Railroad
Freedom Center is to reveal stories about freedom's heroes, from the era of the
Project Information
Scope: The Freedom Center has recently been written down to a value of $32M. It was
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”). The
project consists of reimbursing $850,000 on an appropriation awarded in H,B. 562 and
release of approximately $460,000 of escrow monies held under the original base
lease.
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 exchanged $47M in bond debt for
approximately $24M the Freedom Center was holding in investments. The net result of the bond settlement
is an extraordinary gain of approximately $23M in YTD10. 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 Accounting for the Impairment or Disposal of Long-Lived Assets. 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
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
National Am. Sub. 6/15/2000 123 $3,500,000 Funded construction of the
Underground H.B. 640 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