The $93-million, 138,000-sf center in the Central Platte Valley is drowning in debt.
City manager of revenue Cheryl Cohen-Vader and the mayor's special projects director, Liz Orr, met with the bondholders over the past two months to determine whether it was feasible for the city to help the struggling aquarium.
After poring over financial data and considering different options, the final determination was that it is not feasible for the city to either financially assist nor unilaterally purchase and take over the operations of the aquarium.
"When it became public that COJ was having financial difficulties, I believed it was appropriate to consider whether it was feasible for the city to either financially assist or take over the aquarium," Webb says. "Over the past decade, the city has invested more than $50 million in the redevelopment of the Platte River Corridor and we obviously have an interest in wanting to see COJ survive and succeed. However, it became clear that the level of financial assistance required along with the city's other commitments and obligations, that it was not reasonably possible for the city to assist COJ. The future of COJ is now in the bondholders hands."
Cohen-Vader says the city considered different scenarios based on different financial and performance assumptions.
Initially, Denver considered a lease-purchase-operating scenario in which the city would immediately take over the operations of COJ and ultimately own COJ outright. In order for this scenario to have been feasible, the bondholders would have had to agree to take a substantial cut in value on their investment. Bondholders are owed $57 million at 8.37%. COJ officials say they have enough money to cover operations, but not meet all of its future bond payments.
Webb also rejected an internal proposal that would have offered short-term financial aid to give COJ resources to restructure their finances and operational plans.
"We hope the bondholders and current board can find other alternatives that would allow them to be successful," Webb says. "We tried ourhardest to find a way that the city could assist and in the final analysis, it was just not an endeavor the city felt was feasible.
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