The News Desk is a collection of news, notes and breaking items affecting the Fredericksburg community.
Fredericksburg objects to latest slavery museum plan, says it’s too vague about selling land
By CHELYEN DAVIS
The city of Fredericksburg still opposes the bankrupt U.S. National Slavery Museum’s plan to sell part of its land at Celebrate Virginia to pay its debts.
The museum, which filed for bankruptcy last fall, has proposed to reorganize itself and repay its debts by resuming fundraising and selling about half of its 38 acres in Fredericksburg.
Jeffrey Scharf, of Taxing Authority Consulting Services, represents Fredericksburg in the case and this week filed an objection to the museum’s most recent reorganization plan. His issue, Scharf wrote, is not just the components of the plan, but that as written, it includes little detail about how a sale of the land would work.
“There is a total lack of substantive information for the evaluation of the Plan,” he wrote in this week’s objection.
Fredericksburg is owed nearly $300,000 in unpaid real estate taxes by the museum. The land is the museum’s only real property, so if the museum cannot successfully reorganize, sale of the land would be the only way for the city to recoup its money.
Scharf wrote that the museum’s documents contain “no discussion of the proposal, its challenges or prospects … There are a whole host of attendant questions about the ability of the museum to actually sell the land, including local government land use requirements and the covenant on use attached to the gift of the land, which are not addressed at all” in the documents.
The land was given to the museum by the Silver Cos., with restrictions requiring it to be used for an African-American history or educational facility. The museum now wants to invalidate those restrictions, to help make part of the land more attractive to buyers. Celebrate Virginia has objected.
Scharf also revived earlier objections to the museum’s proposed fundraising targets. Museum attorney Sandra Robinson has based the museum’s reorganization plan partly on the land sale, but also partly on a projection that the museum can raise $900,000 in donations in its first year and more in subsequent years.
Scharf has always said he didn’t think that was feasible, and in this filing he did the math.
The museum owes its largest creditor, Pei Partnership Architects, about $5 million. Paying that off in 16 quarters would require payments to Pei of $323,000 per quarter, on the principal alone, or about $1.3 million a year.
Before filing bankruptcy, the museum’s average fundraising was less than $500,000 a year, Scharf wrote, and he doesn’t see how the museum can raise enough to pay its creditors and operate a museum.
The museum is due back in bankruptcy court in Richmond in mid-August for a hearing on the reorganization plan.