Tall Ships in deep trouble

The nonprofit organization that operated last month’s Tall Ships Tacoma festival ran the event at a $500,000 deficit, its co-chairman said Thursday.

But the Tall Ships Tacoma Organization has no plans to declare bankruptcy or seek a bailout from the city, Stan Selden said.

“Our ticket sales were not what we forecasted. Our expenses were less than we forecasted,” he said. “But the ticket sales, combined with free tours of the Eagle – we just did not have the income. And that’s something we couldn’t have known until the event happened.”

About 300,000 people attended the event on the Foss Waterway, which ran July 3-7, according to David Doxtater, the festival’s executive director.

That number is 100,000 lower than the original estimate, and less than half the 700,000 that organizers were hoping for. Poor weather was likely a large factor in the turnout.

Admission to the U.S. Coast Guard Eagle, the 266-foot three-masted barque that was the main attraction of the event, was free, but boarding passes were required to visit the dozens of other ships moored in the Thea Foss Waterway.

All of the organization’s creditors will be paid, Selden said. He wouldn’t elaborate on what methods the organization might use to shore up the deficit.

“We’re not running away from the problem,” he said. “There are various ways to solve these kinds of problems in the nonprofit world, and we’re exploring three or four of those simultaneously as we move forward. No one likes to face up to these problems and make these kinds of phone calls, but we feel it’s our obligation.”

Every creditor who hasn’t been paid has been notified by phone call or a personal visit, he said.

Selden ruled out a bailout from the city, which committed $300,000 in cash or in-kind services ahead of the event. The city’s bigger role this year came in the aftermath of the 2005 festival, when the city and the group that organized it haggled for months afterward over a bill for police, fire and public works services.

2005 PLANNER CRITICAL

Selden said this year’s event led to about $1.5 million of permanent and semi-permanent infrastructure improvements for the Thea Foss Waterway. But, he said, “we can’t put those assets on a balance sheet, because we basically have given them away.”

“We put on a hell of an event, but it was almost too good of an event,” he said. “People could go all day and not spend anything – and that’s what happened.”

Doug Miller of the Tacoma Events Commission, which ran the inaugural 2005 festival and operates the annual Freedom Fair, said he’s heartbroken at the news but not totally surprised. Miller made an unsuccessful bid to run the 2008 festival, which contracted Seattle event planner Doxtater as its executive director.

Miller’s view as a former insider is that the organization became too large, with too many employees and too many expenses. “It went from a community-based, volunteer-driven organization to a corporate-type of event run by people outside the Tacoma area,” he said.

He said his biggest worry, though, is the possibility of an echo effect on charities and other nonprofit organizations in the Tacoma-Pierce County area.

“If the community responds (to shore up the deficit), it will come out of the budgets of the Daffodil Festival, museums, youth groups, the YMCA, the Boys and Girls Club. We’ll all suffer because of the mismanagement. That’s what scares me the most, and that will be the greatest tragedy.”

Selden called that an overstatement, especially given the uncertainty of the current economic climate, and added that some of the options the organization is considering to balance the books might make that concern unfounded.

“Some of the things we have in mind wouldn’t have that effect,” he said.

CREDITOR FRUSTRATED

One creditor, the printing firm Pollard Group, is still awaiting payment for $42,000 of print work, including passport books, volunteer guides, presentation folders and a festival map.

Pollard Group accountant Nita Sutherland said her company had a frustrating time trying to get in touch with someone from Tall Ships; she said a representative from the organization confirmed receipt of the company’s invoices on July 24, but she hadn’t heard anything more until Thursday morning.

“By working with other vendors, I obtained a lot of mobile numbers, e-mail addresses, et cetera,” she said. “And we’ve been making a complete round of phone calls and e-mails to everyone we can. We’ve gotten no response, no result, nothing.”

She said she reached Selden, who was out of town on vacation, Thursday morning.

Talking to Selden was a positive step, she said, but it doesn’t pay the bills.

“I said, ‘Your board members are on vacation, but I’m sitting here in an office trying to figure out how I’m going to make our payroll,’” Sutherland said. “This is not an account we normally would have opened. No one would do business with a blank slate for $42,000. We did so because it was Tacoma Tall Ships.”

Sutherland said the community nature of the event gave it a special sort of cachet with the company.

“We put the job above our other press jobs,” she said. “We ran everything through, provided a good, quality product. And we can’t even get a response from the executive director? The president? The vice president?

“We don’t have the numbers. We don’t know where we stand. We don’t have the money from them, and we’re sorry for the inconvenience.”

Selden denied that no one from Tall Ships talked to Sutherland. He said the organization’s treasurer called her more than a week ago.

“She’s frustrated,” Selden said. “And I don’t blame her. I’ve been in her shoes.”

Scott Fontaine: 253-320-4758

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