The City Failed To Watch The Chattanooga History Museum Dollars - And Response (3)

  • Sunday, February 7, 2016

The tell tale signs of the History Museum's folly have been evident for years. When I was a former member of City Council I interviewed Dr. Daryl Black, Ph.D. to determine if I should argue for or against the annual funding of his organization. His interview, the multi-year history of administrative non-performance (despite consistent repetitive funding), and a review of the organizational documents led me to conclude that continued funding was not in the best interest of taxpayers.

 The Chattanooga Regional History Museum was chartered in 1977 and became a federal tax-exempt organization in 1978. City funding was given to the organization annually for many years. In 2001, the city additionally donated $1,000,000 dollars for the new museum capital fund. The city also helped underwrite the museum's "history makers" fundraising luncheons. The History Museum organization was given a city owned building located at 400 Chestnut Street. City resolution # 25199 transferred the building and land to the organization June 21, 2007. Incidentally, the initial resolution stated that if the museum dissolved, the museum would pay the city back $1,000,000. However, June 31, 2007, (only 10 days later) council voted to reverse the reversion clause eliminating potential indebtedness. The museum leadership sold the property. The museum building was torn down. The site is now the Hampton Inn Hotel downtown. The museum pocketed the money, obtained an administrative office and stored the collection.

Public documents indicate city leadership was notified as early as 2003 that it did not qualify as a tax exempt foundation. When it lost its tax exempt status, the city allocated money from the city's general fund to the museum organization to cover the costs of property taxes and penalties the museum was apparently legally obligated to pay. That should have set off an alarm to all interested parties.

How the organization was deemed worthy of funding as a non-profit foundation after 2003 remains a mystery. The museum organization filed a 2014 application to obtain its usual annual city funding. The application contained a letter from the IRS stating it did not qualify as a non-profit foundation. That IRS letter was dated 2009. The ramifications are somewhat troubling to even the most casual observer. Perhaps board members could be persuaded to offer taxpayers a logical explanation.

Many questions need answers, so it's troubling that none seem to be forthcoming. One is left wondering how donations made to a "for profit" organization could ever be considered tax deductible for donors. Did private donors donate between 2003 and 2014 thinking they were making tax deductible donations? What are the legal implications for procuring and accepting donations under the guise of a non-profit status, when an organization is not non-profit?

My council arguments to cut off city funding (presented in budget committee meetings) were dismissed and overruled by other members of council. The organization was continuously funded during my term of office. The organization and Dr. Black excelled in one thing. That one thing was creating positive public relations, dazzling flowery reports, PowerPoint presentations and flashy interviews aimed at snowing the media, government and private donors. The once nice small Chattanooga Regional History Museum became a sham organization. This is yet another example of how gullible government oversight goes awry. The end result does not speak well for the now vanished Dr. Black or the museum board.

I took no pleasure in arguing against funding the History Museum.  If any city could justify having a history museum it would be Chattanooga. Unfortunately, the strong desire to have a great museum cannot justify endless misspent tax dollars. By the way, readers should not think me a total history museum hater. I was once a volunteer docent for the Chattanooga Regional History Museum. That was back in the early days when there was a history  museum with actual exhibits for the public to visit. It is a "crying shame" that a pure idea was allowed to morph into such a ridiculous multi-million-dollar boondoggle.

Note: 

All non-profit organizations receiving city taxpayer funds are required to submit annual audit findings to the city and complete an extensive funding application. The idea is that if the city vets the organization properly, elected officials representatives will not fund boondoggles. Anyone can request access to copies of these forms from the city via  the Freedom of Information Act. Sometimes these completed forms are posted on the city's website. Non-profit organizations are federally required to submit tax forms which can be requested for public inspection. The documents tell a story. The public can and should take a look at these documents. City Council members should obviously read and digest them before blindly donating taxpayer funds to the same organizations every year.

Deborah Scott

* * * 

Ms. Scott is inaccurate on at least two points in her recent article:

 

First, be assured that the Chattanooga History Center is a fully qualified tax-exempt organization under federal law, and all donations or contributions remain deductible under IRS rules and regulations. Nothing has changed about that.

  

Second, the Aquarium Plaza real estate held by the History Center could not become exempt from local property taxes until the exhibit space actually opened to the public. This is a rather common issue related to state and local law - not federal. Churches and other nonprofits often become aware of this problem when they buy and develop new property. Thus, the History Center has been paying property taxes to the city and (until 2013) the city was simply reimbursing the payments during the period of construction and development. That arrangement ended after 2013 and the History Center has been paying local property taxes out of pocket until the exempt status of the new exhibit space could be finally confirmed. This has been the very public understanding and arrangement all along.

 

Jo Coke

Board President 

 

* * *

 

Having toured the facility and witnessed the world-class stage that was being set, I can only describe the center's failure as heartbreaking. It was brilliantly planned and would have been both informative and entertaining. 

 

Dr. Daryl Black seemed a perfect "face" for the center, a southern gentleman having both a deep knowledge of and enthusiasm for Chattanooga and its history. (His walking tours were a "don't miss".)

 

While I don't know the details of all that transpired, I know that if the center had been brought to fruition it would have undoubtedly been a tremendous success. I hope we don't write it off. It was that special. 

Glen Wood 

 

* * *  

With Ms. Scott’s off the cuff assessment of a troubling situation, I am sorry she can so easily help flog a problem that really needs a solution.  Perchance she can assist the demolition crew that puts all that work in the dumpster for the new tenant.  It is much easier to cast blame than to put forth solutions. 

 

I wondered myself what was up. I looked up the firm that has done work on this facility. They have a fine resume.  My take is the board wanted a world class facility for a collection that deserves it and the presentation that comes with it.  

 

My hope is that this facility does come to be where it is and its life will go on there. As the former center of the city when the river was the hub of commerce and trade the location makes total sense.  Especially when one notes the location is again the heart of our downtown. 

 

Perchance Ms. Scott will become a docent again for the museum she once supported.  What she and other detractors could take note of is our history collection is being misplaced in this back and forth. 

 

We collectively need to look forward to a positive outcome that benefits the region and its visitors.

 

Prentice Hicks

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