News Analysis Civil Rights Museum finances deserve honest assessment
The International Civil Rights Center and Museum has oftenbeen maligned by uninformed commenters and confused journalists and politicianswho speak from a lack of understanding. Unfortunately for the Greensborocommunity, this keeps negativity and veiled racism at the front of anyconversation about the city’s cultural gem.
But it’s a time rising hope for those who have spent years,some decades, working to make the ICRCM a financially sustainable operation. Acomplex web of corporate entities erected to fulfill federal tax coderequirements will fall away this month. The museum has been required to pay in about$240,000 a year into the tax-credit matrix, but those payments will vanish whenthe New Market Tax Credit period unwinds beginning Aug. 17.
Once the NMTC period is complete, the ICRCM will revert tonon-profit status. This will remove the $30,000 estimated property taxliability the museum has endured for the last seven years, freeing up additionalrevenues with which to stabilize the museum’s finances.
According to Guilford County tax records, the museum isstill behind on its 2015 tax bill, owing some $30,000. The 2016 tax bill comesdue in September.
ICRCM attorney and board member, Doug Harris, said in aninterview Thursday that the tax credit requirements were a necessary burden inthat the program helped secure about $22 million in financing with which tocomplete the museum honoring the four NC A&T students who launched the SitIn Movement on Feb. 1, 1960.
Congress established the New Market Tax Credit program in2000 in order to attract investment into impoverished urban areas wherebusinesses have trouble gaining access to capital. About 86 percent of all NMTCinvestment comes from financial institutions. The program allows investors torealize significant reductions in tax liability over a seven-year period inexchange for capitalizing businesses in underserved markets.
Under this structure the museum was required to makequarterly payments of interest and fees into the matrix. In return the museumgained debt-free financing.
“What it really boils down to is the tax credits are a wayof getting that money for free,” Harris said. “As long as you keep your part ofthe bargain you in essence get this, in this case $22 million for free.”
In the end there is no debt or loan to pay back.
“When the tax credits end the net result will be that wewill have taken an extremely historical but beat up building and turned it intoa first-class structure — that meets Smithsonian standards, which is criticalto our future,” Harris said.
The tax credit period ends Aug. 17. Harris estimates itcould take up to two months for necessary legal papers to be executed. When thatis complete, the museum will remain saddled with debts to its tax bill, thebalance of the city’s 2013 loan and a $700,000 line of credit.
“We’re hoping that by the time we emerge from meetingthe city’s requirements we will have retired the bank loan,” Harris said. “Evenoperating at the levels we are right now, we will no longer be operating at adeficit. We will be operating at a break-even point.”
Accounting costs associated with NMTCcompliance cost the museum about $200,000 a year, Harris said, in addition toits chief financial officer having to spend about half his time on tax-creditissues.
While the museum’s financial picture seems on the verge ofclearing up, some remain discontented with their success.
Greensboro City Council member Mike Barber, himself the headof a non-profit that receives money from the City of Greensboro and the BryanFoundation, continues to aggressively call into question the motives of museumboard members and staff.
During a special meeting last week to discuss the 2013 cityloan, Barber raised the specter of the museum being sold or its board membersmaking a salary from future operations. Barber himself has taken in some$286,250 in salary from his non-profit between 2012-2014, according toavailable federal tax records.
Barber also continues to vote on matters before council thatbenefit the Bryan Foundation and its subordinate initiatives such as themegasite project in Randolph County. Records show that the Bryan Foundationgave some $250,000 to the City of Greensboro to benefit Gillespie Park, whereBarber’s non-profit First Tee of the Triad operates its youth golf initiative.
Barber’s war of speculation about the possible sale of the museumhas no basis in discoverable fact, yet in an email to City Attorney TomCarruthers this week he continues to cast aspersions upon the motives of thosemost committed to the museum’s success.
Barber’s speculation goes so far as to question thelegitimacy of a bank document the museum provided as part of the loan-offsetprocess. Carolina Bank forgave the museum a $100,000 debt by writing it off asa donation to the museum in Sept. 2014. This April, as part of the offsetreconciliation process, Carolina Banks’ David Griswold, whose title is special assetsmanager, signed a letter confirming the donation. City Attorney Carruthersprovided the letter to council as part of an update of the loan offset process.
Barber attacked the legitimacy of the document.
“Regarding the other document, this letter was dated andproduced following its exclusion from the original forgiveness total, and thesignature is a stamped signature it appears,” Barber wrote, questioning thedocument’s veracity. “Please contact Carolina Bank to determine and confirm thestaff level of this document, and if the note was paid by a 3rd party, ormerely forgiven.”
A call to Carolina Bank late Friday morning has not beenreturned as of this writing.
Harris, the attorney and board member of the ICRCM, said hecontinues to be amazed that people question the commitment of museum boosters.
“For myself and for about five other board members, we’vebeen working at this now for about 20 years,” Harris said. “We’ve been doing itwithout pay and because we thought it was a good thing to do. We’ve been quite successfulat it.”
Harris said the museum’s vocal critics, and those thatmalign the institution in unfiltered comment threads online, don’t appreciate theimpact the museum has had on the city’s international reputation.
“They are not the tide of history,” Harris said. “I thinkthat in time the vast majority of people in Greensboro will come to see themuseum as a treasure.”