Financial issues for Reach Interpretive Center questioned by report

By Sara Schilling, Tri-City HeraldJanuary 29, 2013 

A review of the long-awaited Hanford Reach Interpretive Center's financial feasibility concludes officials might be underestimating construction costs and may be overly optimistic about some revenues.

The 25-page independent review also says the center may "be limited by its staffing capabilities and reliance on in-kind services and volunteers," according to a draft provided to the Herald. It urges the city of Richland and Richland Public Facilities District to "consider what they will do in case revenue expectations and continued support are not met."

Reach officials say the review paints an unfair picture of the project, at times relying on inaccurate numbers and making apples-to-oranges comparisons. Rick Jansons, vice-president of the public facilities district board, called it "sloppy" during a board meeting Monday, and said it "overstated the risk."

The state Department of Commerce hired the technology and management support firm AECOM to complete the review, required under a new state law.

Among other things in the review:

-- The cost of building the interpretive center may be higher than the $240 per square foot that Reach leaders anticipate. Several other interpretive centers built around the U.S. have cost more, the draft says.

-- There "appears to be a fragile balance" for covering the debt service. The public facilities district in 2004 issued bonds worth $7 million for the project, with the debt to be covered by a portion of sales tax collected in Richland and some other parts of Benton County, and a share of Richland's lodging tax.

While retail sales have been healthy locally, a decline -- as well as another public project taking some of the revenue -- could affect the public facilities district's ability to cover its debt payments, leaving the city on the hook to make a loan, the draft says.

-- The number of programs planned is "ambitious," but Reach leaders are counting on a large number of volunteers to help run the facility, which can be "risky."

It also says "ongoing fundraising may be complicated by the project's past, uncertain economic times and no dedicated paid staff leading the effort," though it notes CEO Lisa Toomey's duties include fundraising. And it says operations projections seem optimistic, particularly when it comes to tour revenues and admissions streams.

Reach officials, however, say their operations estimates are conservative. And Toomey noted the board has authorized four part-time staff positions, which she hopes to parlay into double the number of part-time staff by using work-study students -- benefiting the students and the Reach.

She also said the center intends to cultivate a strong base of volunteers.

Reach leaders also said they're confident in their construction numbers, pointing to a June 2012 report provided by MSA/Lockheed laying out industry models. It put the cost of a local/public agency museum or visitor center at $150 to $300 per square foot. And the design-build team agreed by contract to complete the center to certain specifications with a $3.35 million budget, they said.

They also said the project is well-positioned to meet its debt obligations, with enough money in the account to cover this year and part of next year without factoring in any new revenue collected those years. The review relied on some incorrect figures, leading to a faulty conclusion, they said.

They also noted the public facilities district has never refinanced or increased the debt.

The interpretive center will tell the story of the region's natural resources and history through exhibits and the building itself. The newly selected design-build team plans to incorporate themes of the Missoula floods, Native American architecture and the Hanford B reactor in the facility, set to open in 2014 at the west end of Columbia Park.

The project has been in the works more than a decade and once was envisioned to be far bigger. But it's been beset by delays -- first when it became clear the preferred site wouldn't meet federal requirements, and then when fundraising stalled as the site issue lingered and the recession set in.

Toomey joined the project early last year and has been credited, along with the board, with helping renew energy and public trust.

While the review outlines concerns about the Reach center project, it also notes the hard work by the public facilities district board and Reach staff to "make the dream of building an interpretive center a reality."

It notes the project "has undergone a significant transformation (in the last year) that has streamlined operations and focused efforts on constructing the first building," and says the board and staff "have also been working to rebuild trust in the community."

Toomey said 2012 was a transformational year for the Reach center project, and the momentum will continue into this year.

"What I keep going back to is, we did not work in a vacuum. ... We have worked very closely with people who we feel are intelligent, good business people, ethical and who provided us with a good deal of input and recommendations that we factored into the plan that became the new building," Toomey said.

Board member Dan Boyd added that there may some more obstacles on what's become a long road to completing the center. But "I believe we've got this thing nailed down to where we've got a model that can work," he said.

"We just have to keep at it."

-- Sara Schilling: 582-1529; sschilling@tricityherald.com; Twitter: @saraTCHerald

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