The Duluth City Council learned Thursday that the Lake Superior Zoo will need a lifeline if it is to remain afloat financially for the remainder of this year.
On Monday, councilors are set to vote on a resolution that could provide the zoo with up to a $200,000 grant and also extend the amount of time that the Lake Superior Zoological Society has to repay an outstanding $300,000 promissory note. That note, issued more than two years ago, was to have been repaid by Oct. 1, 2017 after a prior extension, but the deadline will be pushed out for another year, if the council approves.
The resolution notes that the zoo "is experiencing financial difficulty" and would not be able to continue operations through the end of the year without additional financial assistance.
As of Jan. 1, 2018, the zoo will have access to its annual allocation from the city's tourism tax fund. That sum has not been finalized, but this year the zoological society received $510,000 in proceeds from Duluth's tourism taxes.
During his third week on the job as the zoo's new CEO, Sen. Erik Simonson appeared to make a case for the interim support being requested.
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"I feel like I put my reputation on the line by taking this assignment, and I'm willing to follow through with it, but I'm going to need some partners. That's part of the reason why we're here tonight," he said.
Simonson acknowledged this is the second year in a row the zoo has made the same request for aid.
"I could repeat to you all the same reasons that were articulated about a year ago, when the zoo asked for an extension on the line of credit and a $200,000 operating grant to see it through to the end of 2016. But I won't. Nearly all those same facts remain today, and I am extremely sensitive to your positions as city councilors. This request is not an easy one for me to come here to make of you," he said.
However, at present, Simonson said the zoo "is in no position to repay the line of credit."
Nevertheless, he pledged to pay down the debt next year.
As for the grant, Simonson said: "The request is for up to $200,000, and the 'up to' is very important for me to communicate to you. We're not asking for a flat $200,000 to make it through to the end of the year. Assuming our request is approved, we will use only as much as we need to get through," he said, explaining that strict spending restraints will be put in place.
Simonson expressed confidence in a plan to revitalize the zoo, especially in light of some recent developments.
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In September the zoo's four-year accreditation was restored by the Association of Zoos and Aquariums. In 2016, the accreditation had been extended for just a single year, due in large part to the association's concerns about its financial solvency and the condition of its exhibits.
At Large Councilor Zack Filipovich asked how the zoo's capital campaign to raise $1.9 million was going.
Jonathan Ballmer, a member of the Lake Superior Zoo board of directors, noted that Simonson is the fourth CEO the zoo has hired in quick succession, with the last one, Corey Leet, lasting only about four months on the job. He acknowledged the zoo had not yet managed to raise any money, but also suggested the zoo could achieve stability in the meantime by operating wisely within its means.
An incredulous Council President Joel Sipress noted that during his four years in office: "There have been multiple presentations regarding the zoo, and the consistent message ... goes something like this: In order to be sustainable, we need to build attendance. In order to build attendance, we need to refresh the exhibits. In order to refresh the exhibits, we need an infusion of capital. And that infusion of capital will require a capital campaign."
Continuing his line of thought, Sipress said: "If I understand the comment you made earlier, it's that the zoo board has determined or has reached the conclusion that financial sustainability can be achieved in the absence of a capital campaign, therefore, in the absence of significant new capital investment and refreshing the exhibits. Could I ask what has changed in the past year that would lead all previous presentations to be perceived as being in error?"
Ballmer said research into other successful zoos of similar size gave the board newfound confidence that there also were other paths forward than immediate large-scale change.
He pointed to a $30,000 butterfly exhibit brought to the zoo this summer as evidence, saying: "It's an example of how those smaller investments can help boost attendance and help start that chain reaction of getting the snowball rolling down the hill, so to speak, in terms of getting people excited and reinvigorating the zoo on a smaller scale to achieve the bigger scale."
