On the eve of its one-year anniversary, the U.S. Olympic & Paralympic Museum in downtown Colorado Springs operates in the red, projects a deficit of at least $1 million in 2021 and recently sought, and received, millions in federal funds via the city and county to help cover its expenses.
That's hardly the kind of gold-medal performance museum officials counted on. And it comes at what should be a celebratory time for the museum, as the nation and the world focus on the Olympic movement and the Tokyo Summer Olympics, which began Friday.
But the COVID-19 pandemic, which devastated restaurants, bars, movie theaters and almost any other indoor public gathering place, delivered a similar gut punch to the Olympic & Paralympic Museum and its attendance after it opened July 30, 2020, museum leaders say.
The museum had the extra challenge of opening during the height of the pandemic, which curtailed tourism and cut off the flow of out-of-town visitors expected to be crucial to the venue's success. When visitors did travel to Colorado Springs last year, they came for the outdoors — not for indoor venues, one local tourism industry official said.
The Olympic & Paralympic Museum isn't alone. The pandemic has caused "profound damage" to the nation's museums, according to the Washington, D.C.-based American Alliance of Museums, an industry group.
At the same time, the Olympic & Paralympic Museum had trouble leasing its event space, boardroom and lobby for local corporate meetings, holiday lunches, weddings and other functions, which had been expected to provide another key revenue source.
"Opening a museum, opening anything, opening any sort of business that had a predominantly indoor element to it, in the middle of a global pandemic has been a really big challenge," said Phil Lane, the museum's acting CEO, board vice chairman and longtime local businessman.
The museum was built as a tribute to the nation's Olympic and Paralympic movements and their athletes. With interactive exhibits and displays, the 60,000-square-foot venue includes a hall of fame, theater, store, cafe and outdoor plaza. Olympic athletes sometimes are on hand at the museum as visitors come through.
The museum, its backers have said, would help cement ties to the nation's Olympic movement; Colorado Springs is home to the U.S. Olympic & Paralympic Committee headquarters and an Olympic Training Center. A few years ago, city and community leaders branded the Springs as "Olympic City USA."
Community and business leaders also have said the museum, at Vermijo Avenue and Sierra Madre Street, would help anchor revitalization efforts in southwest downtown, which for decades has been home to mostly warehouses and other light industrial uses.
The museum became part of City for Champions — a series of projects proposed by city and community leaders in 2013 that were designed to boost local and state tourism.
That year, the Colorado Economic Development Commission earmarked up to $120.5 million in state sales tax revenues over 30 years to help fund the City for Champions projects. The other projects are the Hybl Sports Medicine and Performance Center, which opened last year at the University of Colorado at Colorado Springs; the recently opened Weidner Field multipurpose stadium downtown; the Robson Arena at Colorado College that debuts this fall; and a planned new Air Force Academy visitors center.
The museum was allocated $26.2 million of the state funds, and raised the rest of the project's cost through private donations and proceeds from a Colorado Springs Urban Renewal Authority bond issue. The project's final price tag was $96 million, according to Lane.
But lofty goals aside, the museum's first year has been problematic. According to Lane:
• Museum officials had budgeted roughly $7 million in revenue for 2021, but also estimated they'd have $8 million in expenses, leaving a deficit of at least $1 million.
"And we're not going to hit $7 million in revenue," Lane said. "But hopefully we’ve done some of the things we needed to do, relative to some cost control and cost maintenance, to try and get close to that $1 million deficit plan."
The museum has not laid off any employees, he added. In a recent report to the city's Urban Renewal Authority, the museum's direct employment count showed 28 full-time employees and 50 part-timers.
The museum, however, parted ways with at least one employee.
Christopher Liedel, who came on board in May 2018 as the museum's CEO, was abruptly let go June 1 by the museum's board and Lane took over as acting CEO. Lane and other museum officials have declined to elaborate about Liedel's departure. At the time he left, Liedel couldn't be reached for comment.
• The museum had forecast attendance to be just under 200,000 for this year, then downgraded that figure to 150,000 in January, Lane said.
Now, museum officials expect attendance for this year to be just over 100,000, Lane said, though the museum is seeing improved attendance the past few months and he hopes for a strong end to the summer. In June, 55% of visitors came from outside Colorado, according to ZIP code data collected by the museum.
"We’re trending in the right direction," Lane said.
When city leaders sought state funding for the City for Champions projects, the museum's annual attendance was forecast to be 350,000 visitors a year.
But that forecast came seven years before the pandemic hit, and many museums nationwide have been in a similar plight to that of the Olympic & Paralympic Museum.
More than 1,000 museum directors responded to a survey by the American Alliance of Museums in April. Roughly three-fourths of those who responded said their operating income had fallen an average of 40% in 2020 while they were closed for an average of 28 weeks because of the pandemic. Also, the survey found most museums haven't been able to offset their losses by cutting spending.
"The museum field will take years to recover to pre-pandemic levels of staffing, revenue and community engagement," Laura Lott, the alliance's president and CEO, said in a statement on the group's website. "Far fewer museums than expected are in danger of permanent closure thanks to several federal relief programs. However, average income sank 40% during the pandemic with museums predicting a slow financial recovery."
• Before it opened a year ago, the museum invested $3.5 million to add stylus pens for touch-screen displays and improve air handling equipment — steps taken to guard against potential health risks because of the pandemic, Lane said.
Those unexpected capital costs, combined with operating losses, have led to a $6.5 million to $7 million hit on the museum's finances because of the pandemic, he said.
"The combination of increased expenses and then the real challenges on the revenue line has put us in some choppy water, is the way I typically describe it with people," Lane said. "And we’re doing everything we can at this point. And things are getting better to navigate those waters."
To that end, Olympic & Paralympic Museum officials applied for, and received, $3.5 million in June from Colorado Springs Mayor John Suthers' office — a grant that was part of the $76 million that Colorado Springs received in funding from the American Rescue Plan Act.
The American Rescue Plan Act — the federal government's latest effort to stimulate the economy in the wake of the pandemic and approved in March — allocated $1.9 trillion to cities, counties and states. Those governments, in turn, can use the money to assist households, small businesses and nonprofits, among others.
Under guidelines spelled out in the federal legislation, the museum can use the $3.5 million from the city on operating costs such as rent and mortgage payments, utilities, employee payrolls and marketing.
The money isn't a blank check; the museum must provide a monthly accounting to the city of how the funds are spent, maintain records related to those expenditures and provide the city with an audit of the funds, among other requirements spelled out in a memorandum of understanding between the venue and the city that runs through 2024.
Jeff Greene, Suthers' chief of staff, and city Economic Development Officer Bob Cope and Chief Financial Officer Charae McDaniel, said the museum is exactly the type of venue and business that the American Rescue Plan Act was intended to help.
"The mayor and I are very proud of the museum," Greene said in a recent interview. "The museum did open during the height of the pandemic. And nobody knew at what point in time how severe the losses were going to be to museums across this country, to other similar type venue institutions, with the changes in tourism, with the changes in the environment that we're all operating, (with) the second wave of the pandemic, which was very strong late summer, early fall last year that went into our winter.
"So the museum opened and the museum was caught in a very difficult situation that was affecting museums and venues across the entire United States," Greene said. "When they approached us, of course there was a willingness for the city to collaborate with them."
The city remains committed to the museum's future, he added.
"The museum is a major institution in our community," Greene said. "There's a partnership here between the city and the museum. And I just can't stress enough the importance of that relationship. The city is going to do everything within our means to ensure the success of the museum and its organization. I mean, we are Olympic City USA."
The Board of El Paso County Commissioners, meanwhile, agreed in June to provide $500,000 to the museum. The money comes from a portion of the nearly $140 million that the county was allocated under the American Rescue Plan Act funds.
"Certainly, tourism businesses have felt an outsized impact by the crisis and the Olympic Museum is no different,” county spokesman Ryan Parsell said via email. "What makes them unique, however, is the fact they opened during the height of the pandemic."
The money given to the museum by the county comes in the form of a sponsorship agreement.
Among other things, that agreement grants one-year, unlimited-visit museum memberships to each of El Paso County's approximately 1,500 employees and officials. Guests of county workers — up to 10 at any given time — will receive discounted museum admission during the year, at $12 per person; the usual admission fee for adults is $24.95.
The agreement also allows the county to place its name and logo on some of the museum’s promotional and marketing materials. The sponsorship agreement ends July 31, 2022, but could be renewed if the county and museum agree to extend or amend it.
The museum isn't stopping there, however; it will pursue philanthropic gifts and almost any other source of revenue, Lane said.
“Look, we’re doing what we can to try and get any funding we can in the door to weather this storm that we’ve come through," he said. "And then to be able to position ourselves for 2022, to build a very sustainable, cash-flowing positive business. And I think we can do that. ”
The museum has submitted no additional requests for federal funding from the city and county, Lane said. Asked it the museum might seek an annual operating subsidy from the city or county, he said such an idea hasn't been discussed.
The museum has garnered plenty of positive buzz in the national media.
In January, USA Today named the Olympic & Paralympic Museum as the nation’s best new attraction for 2020. Several regional and national news outlets also have published stories about the museum.
Last week, "CBS This Morning," the network's national morning news program, broadcast a nearly five-minute report on the museum in advance of the Tokyo Summer Olympics.
The report featured an extended tour of the museum, an interview with gold medal figure skater Peggy Fleming of Colorado Springs, and a brief chat at the museum with Jim Craig, the goalie for the men's gold medal-winning, "miracle on ice" hockey team in 1980. Fleming and Craig both lauded the museum.
Next year, the museum will be featured on the "Samantha Brown's Places to Love" tourism program on PBS, along with a few other attractions in the Pikes Peak region.
Her appearance in the Springs was paid for by Visit Colorado Springs, which promotes local tourism, said Doug Price, the agency's president and CEO. Visit Colorado Springs also is promoting the museum on its website as part of a feature that helps visitors plan their itinerary when they come to the Pikes Peak region.
"We're doing all we can to support the museum," Price said. "As well as everybody else it town. But clearly, being the newest, visible attraction in Olympic City USA, it's in our best interest to do all we can to support them."
The museum, meanwhile, is marking its first anniversary with what it calls its Colorado Grand Opening.
Through Labor Day, there will be free events weekly at the museum, such as Olympic and Paralympic athlete autograph sessions and athlete-led workouts. A four-day Olympic fan fest also will take place at the museum from Thursday through Aug. 1 that will include sports demonstrations, food and beverage and a 50-foot screen to watch the Tokyo Olympic Games.
Lane said the museum won't recover right away. It needs to continue with a strong summer. In the fall, when tourism slows, the museum hopes to increase the number of corporate and social events that take place in its public spaces, he said. He also encourages local residents to visit.
"You’re not going to recover from something like this in two months," Lane said. "But the trajectory is positive. The visitor experience at the museum is fantastic. The acceptance of athletes that have visited has been overwhelmingly positive.
"Long term, I’m very confident the museum is going to be a fantastic asset for this community, for the state, for the country," he said. "It is the United States Olympic (and Paralympic) Museum, it’s not the Colorado Olympic Museum or the Colorado Springs Olympic Museum. It’s going to be great for our country. It’s going to be great for the Olympic movement. So we will get there. It’s just we’re in some challenging times right now and we’re doing a lot of different stuff to try and navigate our way through it.”
Breeanna Jent of The Gazette contributed to this story.