Hornet drowning in rent debt
The City Council, sitting as the Alameda Reuse and Redevelopment Authority, is scheduled to sit down tonight to talk about reducing the rent for the USS Hornet Museum for the fourth time in a little more than a decade, and a new repayment plan for more than a half million dollars it owes in back rent that could cut that debt in half.
City staff is recommending the council lower the Hornet’s rent to $3,000 a month and to offer a dollar for every dollar of debt the Hornet pays, effectively cutting its debt in half if it is repaid over the five years of the proposed lease contract. That’s a fraction of the $27,000 a month it was originally contracted to pay when it signed its first lease with the city, in April 1998.
“The Hornet is not in a position to pay these delinquent rents and continue to invest in the numerous capital needs of the museum ship,” Development Services Director Leslie Little and Nanette Banks Mocanu, the department’s finance and administration manager, wrote in a report to the council.
Little told The Island she is optimistic about the plan’s success and that the city expects to have the Hornet as a long-term tenant at Alameda Point.
The Hornet’s leaders had originally envisioned crowds at the museum that would ultimately top 1 million a year, according to this rather comprehensive piece by the Journal’s Peter Hegarty. But thanks to its less-than-central location and the continuing wait for development at Alameda Point, the museum got far, far fewer visitors than it hoped for. According to Hegarty, it paid no rent that first year.
The city dropped its rent “significantly” in May 1999, and then again in August 2000, to $8,500 a month. At that point, the Hornet was 20 months behind in rent payments – money the city uses to pay for utilities and maintenance out at Alameda Point, according to Little and the staff report.
The Hornet fell behind in its rent again in November 2005, so the city again lowered its rent, this time to $3,500 a month or a dollar for every museum patron, with amounts over $3,500 to go toward back rent. By the end of the year, the Hornet still owed $555,355 in back rent. It has collected $38,631 toward the debt.
According to the staff report, the Hornet’s leaders are having trouble securing financing and attracting large donors because of the rent debt it carries on its books, which accounts for 42 percent of the unpaid rent at the Point.
In the museum’s fiscal year ending June 30, 2007, the last year for which its tax forms were available, it hosted around 51,000 visitors and took in $106,606 more than it spent. Its revenues for that year were just over $2 million.