Kearney Arch bankruptcy plan wins approval; attraction may remain open - Omaha.com
Published Thursday, September 19, 2013 at 12:00 am / Updated at 3:53 am
Kearney Arch bankruptcy plan wins approval; attraction may remain open

KEARNEY, Neb. — The Great Platte River Road Archway Monument won approval for a bankruptcy plan Wednesday that might allow the struggling attraction to remain open.

U.S. Bankruptcy Judge Thomas Saladino ordered the Archway Foundation to pay $100,000 to settle the claims of bond holders and unsecured creditors. The money to cover the payments will come mostly from pledges made by supporters of the transportation museum that spans Interstate 80 southeast of Kearney.

“We have reduced over $20 million in debt down to $100,000,” said Omaha attorney Randall Wright, who represented the foundation in the Chapter 11 bankruptcy proceedings.

Both bond holders and creditors voted overwhelmingly to accept the settlement offer.

Had they rejected it, the bankruptcy would have collapsed and the museum, built at a cost of $60 million, would likely have closed.

“Now this gives us the opportunity to roll up our sleeves and save the archway,” said Joel Johnson, chairman of the Great Platte River Road Archway Foundation.

The Archway Foundation has two months to collect the pledges and pay the court, which will disburse the funds to creditors.

Supporters obtained about $140,000 in pledges to help keep the arch open.

“It won't be difficult to collect the money. Those people jumped up to help us,” Johnson said.

After paying $100,000 to its vendors and bondholders, the archway will use the remainder of the pledged funds to cover legal expenses associated with the bankruptcy.

Ownership of the archway structure and its grounds then will transfer from bondholders to the Archway Foundation.

Foundation officials will now focus on obtaining $400,000 annually from the City of Kearney and Buffalo County to cover operating expenses.

Earlier this year, Johnson said the county and city both would be asked to provide $200,000 each per year for the next three years. During that period, a long-term funding and governance strategy for the archway would be developed.

Before Wednesday's settlement decision, Johnson had said approaching potential donors was challenging because of the $20 million bond debt. He said the situation might change now because any donations would be used to cover archway needs, not pay off bondholders.

With bankruptcy now behind them, Johnson said archway supporters will focus on short-term strategies to boost attendance and cover deferred maintenance.

The Kearney Arch opened with great fanfare in 2000 as a unique monument to the role played by the Platte River Valley in the settlement of the West. But it never generated the attendance necessary to break even. The peak attendance of nearly 250,000 in 2001 was well short of the nearly 1 million visitors predicted by some promoters.

Last year, just under 50,000 bought tickets to tour the museum. The foundation filed for bankruptcy reorganization earlier this year.

Because of low turnouts last winter, the archway's attendance dipped to 36,557 through this August, compared with 40,368 through August 2012. That has put 2013 attendance on pace to be the lowest in the archway's 13-year history.

In August, the state opened a new Interstate exit near Kearney that makes it easier for motorists to get to the attraction. The lack of such an exit has long been blamed for some of the arch's struggles.

Since the new exit opened, Johnson said daily attendance figures have been up 11 percent compared to the same dates in 2012.

U.S. Bankruptcy Judge Thomas Saladino ordered the Archway Foundation to pay $100,000 to settle the claims of bond holders and unsecured creditors. The money to cover the payments will come mostly from pledges made by supporters of the transportation museum that spans Interstate 80 southeast of Kearney.

“We have reduced over $20 million in debt down to $100,000,” said Omaha attorney Randall Wright, who represented the foundation in the Chapter 11 bankruptcy proceedings.

Bond holders and creditors voted overwhelmingly to accept the settlement offer. Had they rejected it, the bankruptcy would have collapsed and the museum likely would have closed.

The Kearney Arch opened with great fanfare in 2000 as a unique monument to the role played by the Platte River Valley in the settlement of the West. But it never generated the attendance necessary to break even. The peak attendance of nearly 250,000 in 2001 was well short of the nearly 1 million visitors predicted by some promoters.

Last year, just under 50,000 bought tickets to tour the museum — a record low. The foundation filed for bankruptcy reorganization earlier this year.

Supporters obtained about $140,000 in pledges to help keep the arch open. Foundation officials will now focus on obtaining $400,000 annually from the City of Kearney and Buffalo County to cover operating expenses.

In August, the state opened a new interstate exit near Kearney that makes it easier for motorists to get to the attraction. The lack of such an exit has long been blamed for some of the arch's struggles.

Contact the writer: Joe Duggan

joe.duggan@owh.com    |  

Joe works in the Lincoln bureau, where he helps cover state government, the Legislature, state Supreme Court and southeast Nebraska.

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