KEARNEY, Neb. — The giant Western history museum that spans Interstate 80 was supposed to draw hundreds of thousands of visitors to central Nebraska every year.
But the Great Platte River Road Archway Monument has been plagued by financial troubles almost from the start. Boosters oversold the museum’s potential for attracting tourists. Critics said it was more of a theme park than a museum. Plus, it’s hard to get to.
Attendance dwindled over the past decade.
The museum’s board cried uncle on Wednesday.
The archway filed for bankruptcy protection, saying it owes bondholders $20 million and has about 100 other creditors. The museum will remain open and retain 10 paid staffers as it reorganizes its finances.
Joel Johnson of Kearney, chairman of the archway foundation board, said he and other board members hope that the museum can continue operating indefinitely if the terms of the bankruptcy settlement are favorable.
“I think we stand a chance this way,” he said.
Johnson said museum officials met with bond managers about 60 days ago “and told them we were at the end of the line.”
He said the failure to repay bondholders and other creditors is linked to the attraction’s inability to meet the attendance projections that lured investors to buy $60 million in bonds in 1997 prior to the archway’s construction.
Promoters had predicted 300,000 or more visitors a year. Attendance was 223,013 in 2000, the arch’s first year. The visitors included President Bill Clinton.
The turnstile count rose to 249,174 in 2001 but has steadily declined. In 2012, attendance was 49,960.
“Last year was not a good year,” Johnson said. “It was hot and dry, and gasoline prices were high. When gas prices go up, attendance goes down, and that includes charter buses. That type of traffic is very volatile.”
Coincidentally, the bankruptcy comes as the museum is close to easing one of its major concerns — access. A new I-80 interchange directly east of the museum is scheduled to be completed this year at a cost of about $20 million.
Until that interchange opens, the closest I-80 exit to the archway is two miles west of the museum. Eastbound travelers who miss that turnoff, though, must go 12 miles out of their way to get back to Kearney and the archway.
The Kearney Arch was the dream of former Gov. Frank Morrison, who believed that Kearney was the ideal location for a museum on U.S. westward expansion.
With its interactive exhibits, dioramas and historical re-enactors, the museum pays tribute to everything from the Pony Express to the railroad to the pioneers who migrated west on the Oregon, Mormon and California Trails. The immense structure spans 308 feet and weighs 1,500 tons.
In response to critics, the museum in recent years has emphasized educational events for school groups and the general public and on programs about American Indian history.
Johnson said the archway has battled financially for years.
Aside from a pair of windfalls — a hail damage settlement in 2009 and the sale last year of land for the I-80 exit — it had made little progress in repaying the $22 million in bonds it has owed since a refinancing agreement was struck in 2002.
Under that agreement, the archway’s initial bond debt of about $60 million was reduced to $22 million, to be repaid by 2013.
The archway chipped away at the debt by using $746,218 from the $1.4 million hail damage settlement and $110,875 from the $423,318 paid for I-80 exit land by the Nebraska Department of Roads.
Johnson said tight finances left the archway delaying maintenance, but the operation attempted to meet what he termed “essential expenses” such as water and electricity.
Some bills went unpaid. The top 20 creditors listed in Wednesday’s bankruptcy filing are owed a total of $121,000. The amounts range from $911 owed to Eakes Office Plus to $31,518 owed to Chubb & Son of Pittsburgh, Pa.
The museum filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Omaha. Under a Chapter 11 filing, the museum seeks to continue operations and reorganize its debts.
Wells Fargo Bank of Minneapolis is the trustee for the bondholders, said Omaha attorney Randy Wright, who is representing the archway.