Copper Rock and Cherette Group presented their buildout proposals to council at a recent work session.  Here is their scorecard.  And, below are pros and cons from their presentations.

Cooper Rock was caught flat footed and ended the night a distant second.  They were professional, focused, and responsive.  But, don’t be surprised if they pull out after the work session.  Cherette tag teamed the meeting.  Taking turns on the overall project and the children’s museum subset.  The children’s museum is their centerpiece.  They led with it and hammered it hard.  Their other elements were hardly mentioned.  Frankly, I don’t blame them.  The museum is novel and enticing.  Sales 101 – Read the crowd and push what sells.

Some Pros & Cons

Here are some pros and cons of Cherette’s children’s museum.

1. A serious red flag flew up when we learned the children’s museum doesn’t have the money to build it.  It must find its own financing (they estimate $5 mil) and Cherette won’t fund it.  Cherette will build it; but not fund it.  That’s a huge concern.  A deal breaker.  The logic doesn’t compute.  If you don’t have the money to build your centerpiece museum, then you don’t have a proposal at all.  That’s when the tap dancing started.  Cherette said let them build out everything else except the museum and do that later.  BUT, if it ends up the museum never gets the funding, then Cherette wants to come back to the city and try to figure out what to do with that space instead of a museum.  That’s like knowing you have a flat tire but choose to wait until you’re cruising 60 mph down the road to change it on the fly.  If we didn’t learn our lesson from the negotiating and financing debacle at the Diesel Plant, then we deserve to suffer this one too, because it’ll be worse and more convoluted if we start down the Cherette path of figuring it out as we go.

• Cherette could not answer the question of why it is mission critical for the children’s museum to be on our waterfront.  Cherette spent 20 minutes (more tap dancing) trying to answer it and finally said they didn’t know.  The children’s museum then came onto the dance floor for another 10 minutes trying to answer it, dodging the question, and ending up talking about everything but the question.

• Council noted the city has suggested two or three other locations in the past for a children’s museum, but the presenters gave no credible reason for passing on them.  They said they wanted to wait until they had all their business plan bases covered.  Ok, if all that is now in place, the question still remains:  Why aren’t the other locations OK?  Why only the waterfront?  Is it a “like to have” or a “must have”.  No plausible answer.

• The children’s museum will not be paying any property taxes to the city.  Cherette said it will be a Sec. 501(c)(3) nonprofit.  That should not be a deal stopper.  The added tax to the city for the whole project (buildout cost approx. $15 mil) would give the city coffers only about $75,000 a year anyway.  A drop in the bucket against our $12 mil budget.  Cherette noted the ancillary revenue of more visitors spending money on food, hotels, retail.  Perhaps.  If we think Chinook Pier should be built out for added tax revenue, we’re picking the wrong reason.

• Cherette said a children’s museum in our community would be unique and iconic.  It will embrace our city brand and image, and show we believe in family and kids.  That’s true.

• Cherette disfavors retail or restaurant buildouts on Chinook Pier and doesn’t want to be any part of it.  That’s a wise view.

• Cherette said this is a 75-year decision and the city should take plenty of time with the community to consider it carefully.  That’s wise advice.

Concerns about the Children’s Museum

Without question, it would hard to find any member of the public who does not fully support family, children, and what this children’s museum wants to accomplish.  It’s a wonderful idea.  We root for them.  Maybe not on the waterfront, but somewhere in our town.  However, their claims are suspect.  Here are some concerns we need to keep in mind.

The touted 170,000 annual visitor claim doesn’t wash.  Lending banks will see through it.  Our public sees through it.  While miracles happen, this one is unlikely.  The children’s museum in St. Joseph is repeatedly mentioned as the model to follow for activity and attendance.  It’s important to note the St. Joe museum has two locations, not one.  And its 40,000 annual visits is nowhere near 170,000.  Other West Michigan children’s museums not mentioned in the conversations fair even worse.  Selective stats always scare us.  It’s better to see the whole picture.  This table lays it out more accurately.

Children’s Museums in West Michigan

This table tells us a lot.  Children’s museums in West Michigan average 41,500 visitors a year and have been around an average of 38 yrs.  Cherette says our children’s museum (which doesn’t even exist yet) will average from worst case 100,000 visits a year, to upwards of 170,000.  A lot of Pinocchio’s.  That’s hard to swallow.  The five listed above just barely TOTALLED over the 170,000 number.  And they’ve been in business for a long, long time to get to their numbers.  The table also tells us towns about the size of Grand Haven struggle to reach 25,000 visitors a year.  The table also tells us almost all the museums started out small, developed their programs,, and relocated as their business grew.  None of them started out big.  Finally, the table tells us Cherette’s numbers for the children’s museum are not credible.  They’re pipe dreams.  They don’t pass muster, not even the sanity test.  They don’t tell the true story.  Council needs the whole true story.  The public deserves the whole true story.  Failing to show the big picture and the whole facts carries consequences in a community.  People rooting for a cause can turn on a dime if they feel they’re being duped or sold a bill of goods.  Selective facts to support a particular narrative fails in the long run.  Our public are not fools and don’t want to be played like fools.

Banks are not fools either, especially when they’re asked to loan upwards of $5 mil to a new venture.  They won’t like the above numbers.  Their due diligence will be thorough and brutal.  Annual revenues for comparable children’s museums in the table above are less than $500,000.  Debt service on a $5 mil loan with today’s interest rates exceeds $750,000 a year.  Even if you get donors and grants, and cut the borrowed amount in half, the debt service is a tall reach.

We don’t know the children’s museum business plan and haven’t seen their proforma financials and budget.  But the banks will throw an army of analysts to pour over them.

What if Council Decides to Build Out Chinook Pier Anyway

Council may decide to build out Chinook Pier despite all the reasons the public has offered to delay.  If so, then council could travel a couple different paths.

1. It could scrap both Cooper Rock and Cherette Group proposals and go back to the drawing board.  Reboot the RFP process.

• It could pick Cherette Group and advance the concept stage to a design stage.  Elements could be picked.  Locations could be set.  A project budget could be calculated.  Etc.  The community would be engaged, and within a year the project could be shovel ready.

Let’s assume the city decides to move forward.  And let’s further assume the city buys into the children’s museum on the far East end of Chinook Pier Park; nestled up tight against the Wharf Marina.  The museum says they need 20,000 sq ft.  That’s a 200 x 100 ft footprint.  That location and size would not encroach on the current farmer’s market. putt-putt golf, city marina, or splash pad.  So, a children’s museum could be built independent of anything else at Chinook Pier.  And being on the far East end, it would block our waterfront and Harbor Island the least.  In other words, it would be the least offensive to any opposition.  The least bad option.

If indeed the city takes the path of a children’s museum, consider the following requirements.

1. Rescope the RFP to only that far East end of Chinook Pier.  The space needed for the children’s museum, and nothing else.  Bifurcate it.  Don’t make it an all or nothing RFP.  If the museum is the element driving the excitement of city leaders, then make it define and prove itself before anything else is built out later, if at all.

• Show city leaders and the public the children’s museum business plan, budgets, and proforma financial statements it is using to get financing.  The package they’re shopping to banks to get funding for the museum.  If the banks won’t fund the museum, then the city has no business considering it either.  If the banks give the funding, then allow the museum buildout.  No money; no deal.  Yes money, yes deal.

• Give the children’s museum a 12-month option.  If they can’t get funding by then, their business plan has problems.  And, if they can’t get funding, why would we even consider building on other parts of Chinook Pier if the children’s museum is the key to revitalize the overall area.  Instead of leaving the best until last, make it be first.  Lead with it.  Its success will then help determine what else, if anything, should be done at Chinook Pier later.

• Require the children’s museum to incorporate the rail cars and coal tipple in its footprint.  Let them be activities and learning elements of the museum.  At present, the rail cars and tipple are eyesores.  White elephants.  Uninviting with Keep Out fences.  They’re not even safe enough to pose an attractive nuisance.  They cost too much to move.  They cost too much to refurbish.  Ok, fair enough.  Then, make lemonade out of lemons.  Make a silk purse out of a sow’s ear.  Make the children’s museum give them purpose.  Including the rail cars and tipple in the 20,000 sq ft museum footprint moves everything to the very far East end, and minimizes its visual barrier of Harbor Island and Dewey Hill.  A win – win.

What do you think? Are one of these developers right for building out Chinook Pier? Or do you prefer it be kept an open green space? Or do you suggest some combination of the two?