* One of the Midwest’s largest tourist attractions is in serious trouble. Press release…
Per State and City orders, Navy Pier was closed to the public from March 17 to June 10 to help curb the COVID-19 pandemic. Since its reopening, the organization has sought to find solutions that would enable it to continue its operations with the safety and security measures currently in place. While we have been able to resume partial operations and safely welcome guests back to the Pier, we are seeing only about 15–20% of our typical summer attendance, making it difficult to generate revenues that support our standard operations.
Navy Pier has operated as an independent nonprofit organization since 2011. Although the organization maintains facilities on publicly-owned property, Navy Pier does not receive any public tax dollars to support its operating costs. The Pier relies on generous philanthropic support from individuals, foundations and corporations with the majority of revenues earned through operational income, such as rent and fees from on-site partner establishments (restaurants, retail shops, cultural anchors, etc.), private events, consumer and trade shows, parking and ticket sales from attractions.
To date, the Centennial Wheel and other Pier Park attractions—a primary source of revenue—have not been able to open and operate. On-site cultural anchors, such as Chicago Children’s Museum and Chicago Shakespeare Theater, have also not yet reopened. Additionally, the Pier has extended rent relief to all of its on-site tenant partners. The parking garages have also seen a significant drop in parking activity, even with discounted parking rates currently in place. And all private events, consumer/trade shows and other bookings have been canceled in our East End event facilities. We rely heavily on these sources of revenue. Furthermore, restrictive capacity limitations for many of our events, restaurants and venues have prevented the Pier from resuming full operations and offering full experiences to guests. The loss of those earnings has been devastating to the organization’s budget, resulting in a projected deficit of $20 million.
With the support of the government funding program, the CARES Act, we were able to temporarily retain staff through the Payment Protection Program (PPP) loan. Our hope was that once we reopened, revenues would be restored at a more sustainable level. Unfortunately, that has not been realized.
To help limit costs, Navy Pier has implemented the following financial adjustments and measures:
• Navy Pier President and CEO has taken a 44% compensation reduction and the executive leadership team members have taken a 33% reduction since mid-May
• Many full-time administrative staff members have been furloughed
• Planned capital improvements have been postponed
• Hiring of critical positions has been suspended
• Contractual services have been significantly reduced
• Budgets have been drastically reduced
• As of Monday, July 27, we made the difficult decision to reduce our full-time administrative staff through layoffs (approximately 20 percent of our employees, totaling 11 positions, in addition to 9 trades workers)
These decisions are not ones that were made lightly and were done after a long and careful review of the Pier’s projected financials with knowledge that many good people would be affected. As an organization that cares deeply about its employees, we held off on making these changes for as long as our finances would allow.
Navy Pier sought and secured a PPP loan, which granted the organization $2.5 million to help preserve the salaries and benefits for eight weeks to retain 55 full-time administrative employees while revenue generation was completely halted during the Pier’s closure. The loan also made it possible for Navy Pier to retain and provide essential job training remotely with pay to 170 part-time seasonal guest service and Pier Park employees to prepare for summer and retained 26 full-time tradespeople, 21 whom were previously laid off who were able to return and begin preparing the Pier for its impending reopening.
As outlined within the parameters of the PPP loan, funds were used to cover up to $100,000 of each full-time employee’s salary, support benefits, satisfy rent/mortgage payments, cover utilities, etc.
Unlike other similar nonprofit cultural institutions, Navy Pier does not receive public funding from city, county or state tax revenue, nor does it have an endowment to rely upon. The PPP loan was a critical source of funding that is helping to bridge the gap created by the Pier’s closure and lost revenues.
More at the link.
* Tim Novak at the Sun-Times…
Payal Patel, a spokeswoman for the private operator of the government-owned pier, said the company “is not going out of business. Navy Pier is not going bankrupt. They’re looking at full closure, partial closure.”
Patel said the not-for-profit company has no plans to walk away from the pier, which it began leasing in 2011 under a $1-a-year lease from the Metropolitan Pier and Exposition Authority, whose board is appointed by Gov. J.B. Pritzker and Mayor Lori Lightfoot. […]
The company — whose board includes former Mayor Richard M. Daley’s daughter Nora Daley Conroy — had more than $57.9 million in debts at the end of 2018, according to records it filed with the Internal Revenue Service. It’s required to pay slightly more than $3 million on those this year. Patel wouldn’t say how it will make those payments.