Corpus Christi Caller Times Caller.com - Neal gives Columbus Fleet deadline of one week

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Wednesday, March 22, 2000

Neal gives Columbus Fleet deadline of one week
Mayor: Plan needed before money to care for ships runs out
By Tara Copp
Caller-Times
The fate of the Columbus ships could be decided by next week. That's the deadline Mayor Loyd Neal gave four council members and three non-profit organizations to navigate the Nina, Pinta and Santa Maria out of their current legal and financial mess or surrender the idea of keeping the ships in Corpus Christi.
   "In the next two weeks the money runs out, the ships are rotting and the insurance terminates," Neal said Tuesday during a City Council workshop. "We've known for four months that we were in deep trouble and the only person to step forward is Mr. Durrill."
   That's Dusty Durrill, the Corpus Christi businessman whose nonprofit Devary Durrill Foundation guaranteed a $1 million loan to acquire the ships from Spain in 1993, who placed a lien on the ships late last year to keep Spain from seizing them, and who proposed recently that local Hispanic leaders raise money for the ships and that the city take over the ships' administration.
   "Now," the mayor said, "Mr. Durrill will either have to release his lien, or an organization will have to come forward with a substantial amount of money, and I have not heard of anyone having the money. Time has expired. We are at the end of our rope."
   Time has expired because the ships' caretaker, the nonprofit Columbus Fleet Association, is out of money. At the end of March, there will be no cash left to pay for their insurance, minimal repairs or the two staff members who currently care for them.
   Neal chose Council Members Rex Kinnison, Betty Jean Longoria, Arnold Gonzales and Javier Colmenero to meet with Durrill, the newly incorporated Carabelas de Colon Historical Foundation, and current members of the Columbus Fleet Association.
   The groups were instructed to be ready to present a plan to keep the ships in Corpus Christi by next Tuesday's council meeting, and space for their presentation was approved for next week's agenda.
   Also on Tuesday, the Westside Business Association filed a request with 28th District Judge Nanette Hasette for a court of inquiry to investigate the Columbus Fleet Association's financial arrears, said association president Paul Garcia. Hasette was out of the office Tuesday and could not be reached.
   Financial report
   At Tuesday's workshop, the council heard the financial status of the fleet, and were more than daunted by the idea of bailing out a tourist attraction that's $1.8 million in the hole, on top of $2.9 million debt that is now coming out of city hotel-motel room taxes to pay for a concrete drydock behind the Corpus Christi Museum of Science and History.
   Councilman Mark Scott said the city would violate the public's trust by assuming financial responsibility for the ships, given their questionable money-making prospects.
   "That is potentially breaking our commitment to the public," he said. "I can't vote to commit city funds if we're not going to get them back."
   Operating loans
   On Tuesday, Columbus Fleet Association attorney John Bell outlined how more than $1.3 million is owed to the Devary Durrill Foundation and the Smothers Foundation.
   About $1 million of the loans were used to pay the lease on the ships and bring them to the city. Subsequent operating loans were given to the fleet by Durrill as the group ran into further financial trouble.
   Durrill earlier this year placed a lien on the ships to keep them from leaving the city before he recovers the money; the lien is further complicating negotiations for the ships because a question of legal rights remains.
   The fleet also owes an additional $500,000 to Spain; those funds were supposed to be paid from the association's profits.
   Spain gets final say
   Current fleet association chairman Norman Wallace said that whatever plan is pursued must be approved by Spain first. Spain has been in contract talks with Landry's Seafood Restaurants Inc. to acquire the ships and take them to Galveston. Landry's would be willing to front the estimated $400,000 that would be required to make the ships seaworthy. But Landry's is waiting for the ships' current financial and legal mess to untangle before pursuing the matter further. Spain sent a letter to the fleet association terminating the lease agreement, but has not taken action on the ships.
   At the Tuesday workshop, City Manager David Garcia presented one option for keeping the ships in Corpus Christi. The key to his plan is that the Durrill and Smothers foundations waive the debt owed. Under the plan, Spain would also have to waive the $500,000.
   Without debt interest and principal payments, and by following a bare-bones budget that would keep the Pinta and Santa Maria drydocked behind the Corpus Christi Museum of Science and History, the ships would operate at a $28,287 loss in the first year. The Nina would be moved so as not to compete with the exhibit for tourist dollars. The report did not specify where the Nina would go.
   Budget cuts
   In addition to eliminating administrative positions, the bare-bones budget cuts out $21,743 spent by the fleet association in 1998-99. Of that total, $2,283 was spent on meals and entertainment, $1,100 on entertainment, $1,624 on bank charges, $4,252 on decorations, $1,059 on gifts for patrons, $250 on contract services, $10,951 on auxiliary services and $224 on the sailing school.
   "Given the current revenue estimates and given the reduced staffing level, we'd be essentially just opening the doors, if council would appropriate $50,000 to make up the shortfall," Garcia said.
   In the proposal, which Garcia said he opposes, the shortfalls would come from the city's general fund.
   Public funds
   Kinnison and Scott expressed opposition to using further public funds for the ships, which are already taking out about $280,000 a year in debt service payments for the $2.9 million concrete plaza behind the museum. No official vote was taken on members' opposition or support of the plan Garcia presented.
   And volunteers who have served on the ships balked at the idea of keeping them tied to the plaza, which is viewed by many as the reason for their failure. Closing the exhibit has also hurt the museum, which has seen attendance drop and has had to lower ticket prices from $8 to $5 for adults.
   Carabelas de Colon group
   The ships "don't deserve to be rotting in a sea of cement," said fleet association board member Mirta Blay, who is also a member of the Carabelas de Colon organization. "Try to save the museum some other way, not with the ships."
   The Carabelas de Colon organization is a new nonprofit whose members are former volunteers and sailors of the Columbus ships. The group would use the same bare-bones budget approach the city presented but would return the Pinta and Santa Maria to the water in a different location.
   Water vs. land
   After the meeting, Durrill and members of Carabelas de Colon were already at odds.
   "The ships belong in the water," Blay said to a group that included Durrill. "We've got 40 to 50 sailors who will start doing volunteer work. You have done your part. We have to join forces to save the ships."
   Durrill disagreed, saying the best way to save the ships for the city is not spend money now trying to move them.
   "In the short term the only option is where they are at," he said. "The city wants an answer. You have to have money and permission to move the ships. I've been there before; it's a major problem."


Business writer Tara Copp can be reached at 886-4316 or by e-mail at coppt@caller.com

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