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Twain House Debt Eases

State Grant, Refinancing Will Help Institution Absorb Cost Of Visitor Center, Move Forward

October 17, 2006
By JEFFREY B. COHEN, Courant Staff Writer

The Mark Twain House and Museum opened its new $18 million visitor center - with space for meetings, education, training, shopping, and more bathrooms - to great fanfare in 2003, but officials there have spent much of their time since then figuring out how to pay for it.

"We were just plain running out of cash," said Debra Petke, the center's executive director. "We have been paralyzed as an institution. To be able to think really clearly about the next five years has been difficult, so we had to get past this point of how we were going to pay the bills to know how we were going to move forward."

With $11 million in construction debt to pay back in just over three years, the great new building became a great financial burden.

Bank payments robbed the center's operating budget, so the board and Petke - who became executive director last year after longtime director John Boyer left - cut a variety of costs. They didn't fill a marketing position. They cut back on travel and subscriptions. They cut out revolving exhibitions.

"There's a lot of resources that goes into [a revolving exhibition] and, at the end of the day, it wasn't increasing admissions significantly," said Dede DeRosa, the Twain center's board president. "People weren't coming to see the changing exhibitions. They're still coming to see the Twain House."

But the numbers still didn't work once the cutting was done, so the museum went looking for help and got it, receiving a $3.5 million grant from the state and securing a deal with Webster Bank to refinance its remaining $7.5 million in construction debt.

"I don't think it was anticipated early enough how magnificent the whole thing would be," said Kenneth R. Kahn, head of the Greater Hartford Arts Council, which is one of the center's funders. Or, in other words, "the pace of the building program outran their fundraising capability."

"The building is a marvel, it almost killed them, they've resurrected themselves, and that's a tribute to all the people who stayed behind them, who stayed with them," Kahn said.

Between 1996 and 2005, the Twain center raised $25.2 million in a general capital campaign. But, Petke said, the cost of renovating the Twain House and other expenses left only $8.6 million for what would end up being a roughly $18 million visitor center - initially projected to cost only $13 million to $14 million.

So the museum had to borrow roughly $11 million from Webster Bank, used $2.9 million of its remaining raised funds to finance the debt, and went from there. As a result, the center's $800,000 annual payment to the bank represented 20 percent of its operating budget - more than double the acceptable level for a nonprofit, Petke said.

To help close the gap, the state last week approved a $3.5 million grant "as part of a comprehensive recapitalization and restructuring of its operations." In a statement, Gov. M. Jodi Rell said the action was needed because "absent strong leadership and commitment, the Mark Twain House and Museum would likely have to close its doors."

Now, Petke and Webster Bank are in the final stages of closing a deal that would extend the terms of the remaining debt and make the monthly payments much more manageable.

"It's something that's going to make it much easier to live with, a much easier length of time to pay [off] the debt, under much better terms," Petke said. "It will give us a chance to do some serious fundraising."

Petke and DeRosa said they hope the Twain House will soon break free from its paralysis. They will soon start a second capital campaign. Petke will spend much of the upcoming year thinking about the five years to come.

"We're very ready to look forward," Petke said. "But before I could grow, I wanted to stabilize."

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
| Last update: September 25, 2012 |
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