The LeMay Automobile Museum had a very bad 2008. But it looks to have a very good 2009. The Tacoma City Council can help make that happen next week – and it ought to.
The museum project came close to going bust last year after the economy went sour and backers hit a brick wall trying solicit donations. Fund-raising had stalled at $49 million – including donated land and automobiles – and they needed at least $57 million to break ground on a complex that had already been squeezed for economy by the architect.
America’s Car Museum – as it is also called – is now back on its feet, thanks to a creative financing plan. Museum leaders have identified two sources of credit, private and federal, that would put the project over the top and permit a long-awaited groundbreaking later this year.
At least $4 million looks available from corporate investments leveraged by a federal incentive called the New Markets Tax Credit. The NMTC offers an income tax credit to investors who finance improvements in economically distressed areas. As it happens, the LeMay museum qualifies.
Another $3.5 million worth of credit can come from the U.S. Department of Housing and Urban Development under a program administered by local governments. A Section 108 loan, if approved by the City Council, would complete the first-phase financing package the museum needs.
This is the same kind of loan that saved the Sheraton Hotel – now the Hotel Murano – whose closure would have threatened Tacoma’s convention and tourist industries.
The case for financing the LeMay museum also involves the city’s self-interest. By putting one of the world’s most spectacular automobile collections on display, this project promises to pull hundreds of thousands of visitors to Tacoma and Pierce County.
There’s a common misconception – with this and some previous projects – that the city government is subsidizing a frivolity at the expense of such basics as sidewalks and road repair. Not so. The City of Tacoma operates as clearinghouse for the HUD money; it doesn’t put up that money itself.
Money spent on the LeMay Automobile Museum is not money robbed from neighborhoods. If anything, a successful museum promises to make more funding available for other city priorities by pulling in more sales-tax and other tourist revenues.
The City of Tacoma has little to lose from the Section 108 loan. The museum’s own assets would serve as collateral. As backer Karl Anderson points out, a worst-case default would leave the city owning “one of the world’s finest car museums.”
In today’s economy, that’s about as good an investment as you can find.