ST. PETERSBURG — Awash in primary colors and crawling with jubilant children, Great Explorations' cheerful atmosphere belies the youth museum's financial struggles.
In the past year, the nonprofit laid off 12 staffers, racked up a $30,000 debt to its landlord, the city of St. Petersburg, and was sued by a private lender for breach of contract. Its most recent federal tax return in 2008 showed a $205,000 deficit.
What this all means for the museum's long-term viability is unclear.
The museum at 1925 Fourth St. N hasn't opened its books to the city, as required by its lease, or provided a recovery plan.
Museum director Alan Kahle couldn't be reached for comment.
However, board chairman and state Rep. Bill Heller said the museum faces the same fundraising hurdles as other arts organizations. The harsh recession has inspired many traditional donors to redirect their giving to social service agencies.
Heller said he believes with the community's help, the museum will recover.
It has suffered a sharp decline.
Tax forms and city records show the museum enjoyed years of growing donations, ticket sales and exhibit expansions, resulting in near annual surpluses ranging from $244,000 to more than $637,000 from 2001 through 2007. The infusion of cash was used to expand programming and build up staff, leaving little savings when the economy turned.
For instance, employee costs soared by nearly $300,000, or 55 percent, in 2008. Meanwhile, the museum's cash assets hovered under $80,000.
"There's nothing wrong with paying people to put on exhibits or to run the programs of the museum," said Daniel Borochoff, president of the American Institute of Philanthropy, a Chicago nonprofit watchdog.
However, he added, "It certainly doesn't look good for a major cultural institution to not pay the city."
The 18,000-square-foot museum teaches children how to care for pets, make pizza and fish. There is a child-sized grocery market, sailing ship, fitness center, fire engine and TV studio.
The last time the museum was in the red was 2004, when its program spending was four times as large as its fundraising.
Great Explorations rebounded, collecting more than $1 million in donations in 2005. It closed the year with a $508,990 surplus, according to tax forms.
That same year, the museum asked the city for a financial break, citing financial difficulty. The city allowed the museum to defer nearly $3,000 in monthly fees through 2008.
The museum eventually paid off its debt.
But after its 2008 deficit, the museum again stopped paying the bulk of its monthly city fees, only this time it didn't have permission. Its debt to the city now totals $29,162.
Museum officials say their decision to refuse the city its full rent is not purely financial.
Kahle, the executive director, insisted some of the fees related to the building's original construction were excessive in a recent letter to the city.
"The museum has not closed its doors to any of this city's families who in these tight economic times have found it to be an affordable and accommodating place," he wrote. "In fact, visitation and program participation remain at an all-time high due to reduced prices, sliding fees, scholarships, free days/passes, and community outreach."
Great Explorations was scheduled to meet with city officials to discuss potential solutions in November, but the city cancelled and never rescheduled, Heller said.
"If we really owe them that money, they deserve that money," he said. "They've been good landlords."
The city's budget committee will meet Thursday to discuss the lease agreement.
Council member Jeff Danner said he wants to work with the museum, but can't unless the museum is forthcoming about its financial situation.
"In order for us to make a good, sound decision we need more information than just a letter," he said.
Problems don't stop there.
In February 2009, De Lage Landen Financial Services, of Wayne, Pa., sued the museum, citing breach of contract. It's unclear what that dispute stemmed from.
Heller said the museum recently took out a private loan, in part to prepare for a new $160,000 Wizard of Oz-themed exhibit. The exhibit could bring in $90,000 a year, he said.
"We are not really in the red," he said. "We have a line of credit."
He blamed the museum's woes on the ailing economy.
"People are not spending as much as they were. They are not donating as much as they were," he said. "We are not facing anything that other nonprofits are facing."
Times researcher Carolyn Edds contributed to this report. Cristina Silva can be reached at (727) 893-8846 or firstname.lastname@example.org.