Mecklenburg commissioners talk about whether to force Discovery Place into default
Mecklenburg County commissioners want a closer look at Discovery Place’s finances before deciding whether to take over its new nature museum or give the nonprofit decades to repay $14.6 million in taxpayer money.
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The county agreed in 2024 to give Discovery Place the money to cover rising construction costs for the new nature museum in Freedom Park. Under the agreement, the nonprofit was supposed to repay the money within 180 days of the building’s substantial completion in April. But Discovery Place says it cannot afford to pay a lump-sum of the money back, putting it on track to default later this month.
Now, county leaders must decide whether to give Discovery Place more time to repay the debt, potentially over several decades, or take over operations of the museum themselves. The county owns the building, which has yet to open to the public
“We don’t know where we’ll land. The cake is not baked. We will go through multiple options, we’ll hear from experts, and then the job of this committee is to make a recommendation to the full board,” said Board and Committee Chair Mark Jerrell.
An ad hoc committee formed to resolve the dispute met Tuesday to consider four options, ranging from a county takeover to long-term repayment agreements. But commissioners stopped short of recommending a solution, instead asking county staff to explore an independent financial review of Discovery Place’s operations, assets and borrowing capacity.
County Manager Mike Bryant asked for at least 48 hours to consult with financial advisers and develop a proposal outlining the scope and timeline of that review.
The Charlotte Observer has contacted Discovery Place for comment on the latest county discussions.
County staff presented multiple paths forward on Tuesday. Under the first option, Mecklenburg County’s Park and Recreation Department would take over the museum’s full operations, including its animal exhibits. Staff estimated first-year operating costs of $3 million to $4 million, partially offset by $1 million to $2 million in ticket revenue.
A second option would scale back the museum, moving Park and Recreation headquarters into part of the building and operating a smaller nature center. Annual operating costs would be approximately $1.2 million, with an estimated $120,000 in revenue.
Neither county takeover option would include the planned Canopy Walk, an elevated walkway designed to take visitors through the forest canopy, up to 40 feet above the ground.
The remaining options would allow Discovery Place to continue operating the museum while repaying the county over time.
One would require a minimum annual payment of $200,000, taking approximately 73 years to repay the principal. County staff recommended a more aggressive plan requiring at least $400,000 annually, plus additional operating revenue above that threshold, reducing the repayment period to approximately 36.5 years at the minimum payment.
But commissioners questioned whether Discovery Place could meet those obligations.
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Commissioner Elaine Powell compared the county’s relationship with Discovery Place to an unhealthy domestic relationship.
“It’s domestic violence awareness month, and we teach our youth to get out of unhealthy relationships,” Powell said. “What example is the county setting if the board decides to bail out Discovery Place?”
Powell, who proposed that the county demand immediate repayment and declare Discovery Place in default if it cannot pay, questioned whether another long-term financial agreement would be responsible.
County Chief Financial Officer David Boyd suggested engaging a financial adviser to examine Discovery Place’s overall financial position, including assets, outstanding debt and opportunities to obtain commercial financing.
The review would extend beyond the nature museum to Discovery Place’s other operations.
Boyd said the analysis could identify whether the nonprofit has borrowing capacity that could help repay some or all of the county’s money.
Assuming Discovery Place provides financial information promptly, an adviser could potentially determine within about 30 days whether financing options exist, Boyd said. Developing those options could take longer.
The review would come at an additional cost to the county, with expert fees estimated at $300 to $400 per hour.
Commissioners also requested more detailed estimates of the staffing and operating expenses involved in a county takeover.
The Oct. 27 deadline does not necessarily mean the county must immediately take control of the facility. Officials discussed the possibility of issuing a notice of default while holding off on enforcement action as they evaluate their options.
Jerrell emphasized the need to consider Discovery Place’s broader contributions to the community while protecting taxpayer resources. He said that the county would eventually need to examine how the original agreement was approved and whether mistakes were made by county staff or commissioners.
The financing agreement was approved in January 2024 as part of the commission’s consent agenda, typically used for items approved without discussion. Several commissioners said last week they hadn’t realized they were agreeing to what amounted to an unsecured loan.
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