$42 million question answered: Mob Museum to repay $6 million

You’re the anonymous soul who posted a good question online at the end of my Monday column on the Mob Museum.

Most of the time the comments at the end of stories have little value, show great ignorance, poor spelling and pitiful grammar and often are personal attacks.

Rarely do the comments result in another column. This is one of those rarities.

FR asked: Is any part of the $5 million in operating expense slated to begin to repay the taxpayers the $42 million they have invested?

It was a question that I hadn’t asked and hadn’t seen in other news accounts.

I assumed, wrongly it turns out, that if some repayment were in the works, city officials would have shouted it from the rooftops. The public outcry calling the museum an inappropriate use of tax dollars has been constant and vociferous ever since the idea was first floated by then-Las Vegas Mayor Oscar Goodman in 2002.

I asked Ellen Knowlton, former head of the FBI in Las Vegas, who is president of the nonprofit now operating the museum — The 300 Stewart Avenue Corp. (Not coincidentally, that’s the address of the downtown museum).

Didn’t feel so bad then because she didn’t know the answer either and referred me to Mike Devine, who has represented the city of Las Vegas for the past three years through the construction phase and negotiated with the nonprofit so everyone is on the same page.

Simple answer: Yes. The city will be repaid $6 million over the next five years.

“The development agreement between the city and the (nonprofit) board is that over five years, the city will be paid $6 million from the museum back to the city,” Devine said Friday. That’s not contingent on anything, that’s a requirement.

What happens if the National Museum of Organized Crime and Law Enforcement is a bust? Will the city be on the hook to pay any operating costs?

“After the city gets paid back $6 million, we have sufficient operating reserve to cover a relatively long time,” Devine said. “There are plenty of institutions that have very low attendance and still operate.”

If 300,000 people a year come paying an average of $14 a ticket ($10 for Nevadans, $18 for tourists) that makes for
$4.2 million. The operating costs are estimated at $5 million a year.

If the Mob Museum doesn’t draw crowds, Devine said, the nonprofit will reach out for other sources of funding, but it’s no longer the city’s responsibility.

What if it’s a huge success and makes buckets of money?

Devine can’t say definitively but suspects the city and the nonprofit would renegotiate after five years and perhaps repay more of the nearly
$37 million the city has spent on the $42 million museum. State dollars totaled $2 million, and federal grants made up another $2.7 million.

This information won’t change the minds of those who believe the entire museum should have been built by private industry, not public dollars, and view it as having no value because of the subject.

But a personal observation here. On Thursday, I saw a couple leave the Mob Museum and stroll down Third Street toward Fremont Street. They asked if Triple George had good food, and I said yes. They headed inside.

It’s a tiny example of how a tourist contributes to the local economy and helps a local restaurant. But if enough tourists visit the museum (a big if) and then stay downtown to eat, drink or gamble, maybe this museum, despite certain imperfections, will work after all as a downtown redevelopment tool.

If nothing else, it preserved a historic courthouse worthy of restoration.

I’m not saying that just because Oscar Goodman called critics of his dream “morons” and “monkeys,” because I’ve been called worse.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call her at (702) 383-0275. She also blogs at lvrj.com/blogs/Morrison