HomeMy WebLinkAboutReports - 2022.09.29 - 37642
AGENDA ITEM: Special Project Pontiac Transportation Museum
COMMITTEE MEETING: Board of Commissioners
DATE: Thursday, September 29, 2022 12:58 PM - Click to View Agenda
ITEM SUMMARY SHEET
DEPARTMENT SPONSORED BY
Board of Commissioners Angela Powell, Marcia Gershenson
INTRODUCTION AND BACKGROUND
Summary of Proposed Project
Funding is requested to support renovation of a derelict building in Pontiac to house the Pontiac
Transportation Museum. This non-profit organization has acquired the building/property associated
with the former Crofoot Elementary School – right in the middle of a federally recognized historic
district in downtown Pontiac (250 W Pike). This team also already has an extensive collection of
vehicles associated with Oakland County history (some very unique/rare) as well as a deep set of
historic archives. Although this building has not been used since 2007, the work already completed
on it makes it clear that with modest capital spending we could quickly create a very credible and
attractive museum.
What is the estimated cost of this project?
$4,212,323
Are there any possible funding partners or matching funds available? If so, please explain.
It is proposed that funding partners include the State of Michigan (MEDC) and the City of Pontiac.
The PTM has already been actively and somewhat successfully involving private benefactors for
early funding. Further approach to foundations and corporate funding potential partners would be
greatly facilitated by Oakland County’s sponsorship of the project (at this point none want to be on
the ”ground floor” of our Phase 1).
What is the purpose of this project?
Pontiac (and Oakland County) has a rich and enviable legacy in wheeled transportation. And
wheeled transportation drove the whole social history of the area. Not only should all our citizens
take pride in having profoundly affected American history of the last 150 years, but there are people
from literally all around the world interested in this. A museum of the type proposed will not only
draw very significant visitation from SE Michigan, but draw conventions and travelers from around
the country and overseas. Area merchants are the beneficiaries of this economic impact.
Additionally, the museum already has preliminary plans for involving itself in STEAM-related
education – from elementary education levels through career and technical education as well as
adult enrichment lectures. Last, the automotive history of the area actually shows evidence of
embracing social equity aspects in the work environment far earlier than most parts of American
business – something to be proud of! People not exposed to the depth of this overall legacy are
typically astounded by as they begin to understand its depth.
Who will benefit from the project and how?
Museums attract visitation, educate, and make communities vibrant places to live. So more
specifically the benefits accrue to:
• Hotels, restaurants, local shopping merchants
• Enrichment programs for citizens – of all types but especially secondary educational institutions,
STEAM & Technology
• Making Oakland County a more desirable place to live – note that we have few museums for a
relatively affluent county, and none profiling the industry activity that drove that affluence.
The project has been extensively “benchmarked” with other successful museums and would be
pleased to share these economic and community learnings. Note that we would expect the
museum itself to barely break even . . . . the benefits occur to others in our community.
What is the expected duration of the project?
Two and half years of Capital Investment. Long-Term asset and benefit to the county and city.
Will the project/cost fall within one or multiple budget cycles?
No
Will there be a need to organize support from any Oakland County Departments or outside
agencies? If so, please explain.
Yes to promote, along with Pontiac Transportation Museum Board of Directors, Pontiac
Transportation Museum Operating committed and Community Groups
Does this project fall within the scope of the Board of Commissioners’ authority?
Yes
Will you be involved in this project; how so?
The PTM is governed by the non-profit’s Board of Directors which includes both City of Pontiac
Residents and Oakland County Residents. This group has established a volunteer committee that
is overseeing planning and execution of the museum. It has a deep plan – developed over the past
3 years. All of these individuals demonstrate significant intent to continue and drive this forward.
Note also that the project has already benefited from >6000 hours of volunteer activity from
Oakland County citizens (as documented over these 3 years).
What is the proposed timeline for this project (start/completion)?
Renovation of our building began in February 2022. It will run out of capital funding before Phase 1
is complete. The project is divided into 3 Phases spread over about 3 years only because of the
extended capital funding challenges in front of us. Actual renovation is all light construction
(bathrooms, HVAC, electrical, furnishings that could be easily accelerated to be accomplished
inside of 12 months with available capital. A fairly complete architecture site and building plan is in
place.
BUDGET AMENDMENT REQUIRED:
Committee members can contact Michael Andrews, Policy and Fiscal Analysis Supervisor at
248.858.5115 (office) or andrewsmb@oakgov.com, or the department contact persons listed for
additional information.
CONTACT
Angela Powell, Commissioner
Marcia Gershenson, Commissioner
powellan@oakgov.com, gershensonm@oakgov.com
ITEM REVIEW TRACKING
Board of Commissioners Created -
Board of Commissioners
Board of Commissioners
AGENDA DEADLINE: 10/09/2022 12:58 PM
COMMITTEE TRACKING
2022-09-29 Finance - recommend to Board
2022-09-29 Full Board - Approve
ATTACHMENTS
1. BOC Special Projects - Pontiac Transportation Museum Schedule A
2. PTM Capital Fundraising Plan Overview
September 29, 2022
REPORT
2022-1974
Special Project Pontiac Transportation Museum
Sponsored By:
Angela Powell, Commissioner
Marcia Gershenson, Commissioner
Chairperson, the Board of Commissioners recommends the following Board action:
MOTION TO approve the one-time appropriation of $100,000 from non-departmental transfers
General Fund Special Projects to Board of Commissioners General Fund Special Projects line-item
budget to sponsor the Pontiac Transportation Museum's renovation of a derelict building in Pontiac to
house a publicly accessible collection of unique and rare vehicles associated with Oakland County
history as well as a deep set of historic archives; further, a budget amendment appropriating funds for
the costs associated with the implementation of the one-time incentive payment will be included in a
subsequent quarterly forecast resolution and that the Oakland County Board of Commissioners
approves and authorizes the Chairperson of Board to execute the required Agreement on behalf of
Oakland County upon final review and approval by Corporation Counsel.
Chairperson, the following Commissioners recommend the adoption of the foregoing Board action:
Angela Powell, Marcia Gershenson.
COMMITTEE TRACKING
2022-09-29 Finance - recommend to Board
2022-09-29 Full Board - Approve
VOTE TRACKING - Board of Commissioners
Motioned by: Commissioner Michael Gingell
Seconded by: Commissioner Gary McGillivray
Yes: David Woodward, Michael Gingell, Michael Spisz, Karen Joliat, Kristen Nelson, Eileen Kowall,
Christine Long, Philip Weipert, Gwen Markham, Angela Powell, Thomas Kuhn, Chuck Moss, Marcia
Gershenson, William Miller III, Yolanda Smith Charles, Charles Cavell, Penny Luebs, Janet Jackson, Gary
McGillivray, Robert Hoffman (20)
No: None (0)
Abstain: None (0)
Absent: (0)
Passed
ATTACHMENTS
1. BOC Special Projects - Pontiac Transportation Museum Schedule A
2. PTM Capital Fundraising Plan Overview
Oakland County, Michigan
Board of Commissioner Special Project - Pontiac Transportation Museum
Schedule "A" DETAIL
R/E Fund Name Division Name
Fund #
(FND)Cost Center (CCN) #
Account #
(RC/SC)
Program #
(PRG)
Grant ID
(GRN) #
Project ID #
(PROJ)
Region
(REG)
Budget
Fund
Affiliate
(BFA)
Ledger
Account
Summary Account Title
FY 2022
Amendment
FY 2023
Amendment
FY 2024
Amendment
E General Fund Non-Departmental FND10100 CCN9090101 SC731822 PRG196030 730000 Special Projects $(100,000)$-$-
E General Fund Board of Commissioners FND10100 CCN5010101 SC731822 PRG180010 730000 Special Projects 100,000 --
Total Expenditures $-$-$-
PTM Capital Fundraising – Overview
Background:
Proposal is to support Pontiac Transportation Museum’s Phase 1 project – which gets their museum open. The PTM
already has a building and substantial collection. Substantial renovation of the space has already happened. Donations
from individuals to date have totaled over $400,000. Considerable work is being accomplished with volunteer labor
(>6000 hrs to date!) and building readiness is largely a matter of the additional renovation for electrical, HVAC,
plumbing. Approximately $600,000 additional funding is necessary. Oakland County support at some level can inspire
further corporation and foundation participation in the project that “gets it over the top”.
Note that PTM fundraising is largely aimed at capital for building renovation. Our outlook for an operating budget
shows breakeven operation based on a conservative/achievable outlook we are happy to share. Candidly – the
museum cannot “payback” the initial capital outlay through an operating profit. The “payback” occurs in the
community – through economic development, educational outreach, and cultural enhancement in Oakland County.
Our benchmarking of other museum’s finances suggests this is nearly always the case; an individual or community of
supporters provides the “start-up capital”, then the museum delivers its mission, while it scrambles to break-even in
operations.
Fundraising Plans
Our simple, general strategy the last 3 years has been to:
A. Broadly approach “stakeholders” (individuals, businesses, foundations) – “friendraising”
B. Run public events that generate awareness, show value, and stimulate interest
C. Run specific fundraising events/programs
D. Focus on getting the museum operational (eg Phase 1) to inspire confidence that this is real and will succeed
The COVID pandemic has been a significant roadblock to effective fundraising (as detailed in the ARPA justification
documents for PTM). Stakeholders that we continue to approach:
Individuals and Automotive “affinity groups” – Clubs, etc
Foundations: Based on review of philanthropic objectives, the most prominent list includes (but is not limited
to): Margaret Dunning Foundation, William Davidson Foundation, CFSEM, Taubman Foundation, Penske
Foundation, etc
Corporations: key “targets” are major employers in North Oakland County, especially those with auto heritage.
Secondary targets are the multitude of small businesses that would benefit from tourism/visitorship in Pontiac.
Public Funding Sources: Primary beneficiaries of PTM’s contributions will be the City of Pontiac and Oakland
County. The MEDC would seem to be the right state agency (we are currently waiting news on a second round
of their RAP (Revitalization and Placemaking Grants).
In addition to the individual appeals, PTM has established and is running several funding programs to make this
attractive:
Grant applications to foundations that seem to be a “fit” based on their philanthropic objectives: only success
so far has been MotorCities National Heritage Area (approx. $25,000). Many foundations do not grant capital
projects. Based on the very positive feedback, our interpretation is that most of the foundations approached
will strongly consider Phase 2/3 proposals from PTM
“Buy The Foot”: Has generated approx. $10,000 to date
Engraved Paver Walkway: Over $25,000 of engraved pavers have been purchased to date. Supportive
organizations donate graphic arrays and individuals purchasing bricks may align to those groupings. We would
expect this to continue to gain steam.
Offering “Naming” Alternatives: Significant donors want (and deserve) enduring recognition. PTM has
identified quite a number of exhibits/rooms/building features that provide attractive naming alternatives. Thus
far we have 3 “named” entities (recognizing individuals in a total of approximately $325,000)
A corporate donation level structure providing corresponding recognition and involvement benefits
Near Term Steps Intended to Enable Further Fundraising Success
1) Have made a somewhat specific “consortium proposal” for funding – basically needs some starting commitments,
which we believe will enable participation of others. Securing funding from Oakland County or City of Pontiac
would seem the linchpin to confidence from other funders.
2) Foundation and corporate informational lunch exposure to the museum (waiting completion of bathrooms/theater,
mid-October)
3) Forming a partnering relationship with OLHSA as a fiduciary (we believe helpful in establishing credibility with
funders)
4) Splitting our existing 501C3 into two entities – one focused exclusively on PTM, the other handling existing
operations in Illinois
Long-term Project Structure
PTM has subdivided a multiyear project into 3 phases (basically opening successive areas of the existing 55,000 sqft
building). Rationale for doing this was to separate fundraising in 3 increments:
Phase 1 As Proposed Here – gets the museum operational in a credible (10,000 sqft) size. Total cost is about
$1M (perhaps $600k more to spend beyond what we have already invested).
Phase 2 – opens more floorspace and creates a refreshed front/street appearance
Phase 3 – last increment of floorspace, and also includes an outbuilding restoration shop
Phase 1 renovation is underway, but current funding will fall short of finishing this.
PTM has approached many individuals, selected foundations that would seem to be a fit, corporations with significant
ties in the Pontiac area, as well as civic/community leaders. Reaction to the overall project and its benefits has been
universally positive.
Grants from foundations and corporations to date are negligible – they seem to not want to be “on the ground floor” –
but offer invitation to re-approach them for Phase 2/3 involvement. The groundswell of volunteer work support has
been outstanding, totaling over 6000 hours in the 3 years to date.
PTM Operating Budget Forecast For 5 Yrs
Basic conclusion: The proposed museum can be managed to be a viable, breakeven operation. Capital infusion is
necessary to “prime the pump”.
PONTIAC TRANSPORTATION MUSEUM PRELIMINARY BUDGET FORECAST
SUM TOTALS
Calendar Year = Budget Year 2023 2024 2025 2026 2027 FIVE YEARS
(000's)(000's)(000's)(000's)(000's)(000's)Assumptions
CASH RECEIPTS:
General Fund:
Memberships 40$ 25$ 20$ 15$ 10$ 110$ Sponsoring Patron memberships, Family membership - speculation
Admissions 66 175 263 350 350 1,204 Partial yr 2020, ongoing attendance growth to approx 35k/yr
Promotions:
Events - Museum Sponsored 50 100 120 120 120 510 Pontiac Drive-In, Affinity group cruises, auctions - speculated
Events - Outside Organizations 6 12 24 48 72 162 Corporate events, individual gatherings/weddings - speculated
Contributions - General Operating 20 20 20 20 20 100 Ongoing philanthropy of "PTM friends"
Contributions - Buy a Brick Campaign 15 20 10 5 5 55 Focused on '20 and '21, becomes ongoing gift shop item after yr 3
Contributions - In-kind -Expect this to be significant and affects statement of assets, but not budgeted here
Museum Earned Income -25 25 50 50 150 Operating plant tours and possibly Heritage Center tours with GM
Merchandise Sales 33 88 131 175 175 602 Based on straight ratio to attendance and POMARC experience
230 465 613 783 802 2,892
Restricted Funds:
Contributions - Vehicles -Expect this to be significant and affects statement of assets, but not budgeted here
Contributions - Equipment -Expect this to be significant and affects statement of assets, but not budgeted here
Programs Financed by Grant 20 40 80 80 80 300 Costs specifically allocated to this - typically will be basically reimbursed
Contributions - Vehicle Restoration -Expect this to be significant and affects statement of assets, but not budgeted here
20 40 80 80 80 300
Building Renovation Fund:
Building Fund - Phase 1/2/3 750 500 500 750 100 2,600 Building fund to support Phase 1/2/3 (combination of civic, foundation, coporate, and individual contribution
Building Fund - General Long Term Campaign This might begin after year 5 to accumulate endowment capital
Building Fund - Naming Opportunities 150 200 500 500 -1,350 Also part of Phase 1/2/3. Peaks during Phase 2 and Phase 3 campaign
Building Fund - In-kind Contributions -Expect this to be significant and affects statement of assets, but not budgeted here
940 780 1,160 1,410 260 4,550
Total Cash Receipts 1,190$ 1,285$ 1,853$ 2,273$ 1,142$ 7,742$
CASH DISBURSEMENTS
General Fund:
General Operating Expenses 86$ 228$ 341$ 455$ 455$ 1,565$ Salaries, heat, lights, insurance, expendables, assumed @ 130% of admiss/attendance
Promotions (Events) Exp. - Museum Sponsored 30 60 72 72 72 306 Based on 60% of Event Revenue
Promotions (Events) Exp. - Outside Organizations 3 6 12 24 36 81 Based on 50% of Event Revenue
Buy a Brick Campaign Expense 5 4 2 1 1 11 Based on 20% of Paver revenue
Merchandise Costs 20 53 79 105 105 361 Based on 60% of revenue
Vehicle costs - non-restoration 5 10 20 30 40 105 Gas, titles, transportation
Building & Grounds Maintenance - General 7 7 7 7 7 35 Asssumes executed with mostly volunteer labor
156 367 533 694 716 2,464
Restricted Funds:
Program Expenses 16 32 64 64 64 240 Assumes 20% of program grants applied to offset of general operating expenses
Vehicle Restoration Expense ------Assumes this is funded by philanthropy or specific grants
16 32 64 64 64 240
Building Renovation and Grounds:
Architectual & Design Costs 20 40 40 100 Assumes some in-kind/donated work on architecture plan
Building Renovation Costs 750 500 1,250 750 3,250 Assumes Phase 1 in 2020, Phase 2 in '21/'22, Phase 3 in '23/'24
Building Construction Costs (Garage)500 500 Assumed to be part of Phase 3 costs
Equipment 175 125 300 Office equipment tied to Phase 1 and Phase 2 expansions
Ongoing display/exhibit growth costs 200 200 Phase 1/2/3 costs include their own exhibit development - this is annual ongoing
Un-forecasted maintenance / rainy day costs 200 200 Annual beginning in yr 5. Expect this may be roof-related in the first 10 yrs.
Landscaping Costs 100 20 20 30 5 175 Assumes bump for restoration garage landscaping
Signage 30 30 Exterior signs
Roadways 60 250 310 Restoration garage paving, yr 5 entrance from M59
1,075 560 1,495 530 1,405 5,065
Total Cash Disbursements 1,247 959 2,092 1,288 2,185 7,769
Surplus/Deficit (57)$ 326$ (239)$ 985$ (1,043)$ (26)$
(UNAUDITED)
Non-recurring capital spending Non-recur capital 1,000 End of Phase 3 spending adjustment to estimate recurring.
Steady State "surplus"(43)The year 5 "surplus" extrapolated to steady state
Revenue from philanthropy Phil'py dependence 215 This is the "year 5" expectation of ongoing philanthropy
Year 5 is viewed as "steady-state" with the exception of Phase 3 building renovation and grounds costs ($1M)
Estimates above indicate museum sustainability with a realistic amount of philanthropy dependence
Summary of Funding Status and Needs Along With Proposed Capital Support
From Funders
PTM initial proposal shown below. PTM is very receptive to discussion with key stakeholders about whether this
proposed distribution is appropriate and realistic - and how we would go about turning this into agreements.
The PTM has a deeper level of detail on an explicit consortium proposal to achieve the results above by approaching
identified individuals and groups. Actual status as well as a proposed level of involvement are detailed. Obviously,
many might say “no” and some might involve themselves deeper.
It seems necessary that this “consortium negotiation” start with a significant stake from County and City
governments.
Aggregate Summary of Pontiac Transportation Museum Funding Status/Needs
Museum Initial Capital Spending Phase 1
2022
Phase 2
2H2023
Phase 3
1H2024
$245,000 n/a n/a
$805,000 $1,318,000 $1,818,000
$1,050,000 $1,318,000 $1,818,000
Long Term
Composite
Capital Need $4,186,000
Private Donor Support (to date)$430,000
Capital Support Requested and Timing 4Q22, 1Q23
Oakland County Commisioners $100,000
County ARPA $200,000
City of Pontiac $75,000
State (MEDC is most likely)$150,000
Foundation/Corporation $200,000
Additional Individual Funding $125,000 (approx $100k in hand)
$850,000
Long Term Intent
Spending to Date (out of pocket)
Forecast Spending
Totals
Total of Remaining Funding