Audit: Mismanagement Sinks Tall Ships Festival
Posted April 16, 2007
Updated April 17, 2007
Raleigh, N.C. — A state audit released Monday criticized the management of the Tall Ships festival last summer and said a land transfer associated with the event should have been handled differently.
The Friends of the North Carolina Maritime Museum, which organized the Pepsi Americas' Sail 2006 festival held during the Fourth of July week in Beaufort, took out nearly $5 million in mortgages to pay for improvements to the 36-acre Gallants Channel Waterfront, the central venue for the event. They based the figure on money they expected from the General Assembly but that never was approved and on anticipated profits that never materialized.
The financial spiral continued down from there, according to the audit. Only one tall ship showed up, which meant fewer ships for people to board. That led to longer lines in sweltering heat, which forced organizers to cut off ticket sales and offer refunds to unhappy customers.
Organizers expected ticket sales of $2.6 million, but they brought in only $675,000 and had to refund $92,000 of that. The festival ended up with an operating loss of $1.8 million.
The audit also faulted the organizers for not having a single manager in charge—a series of independent committees ran the event—and for not signing contracts with major vendors, which led to inflated costs for security, public relations and food.
The state took possession of the Gallants Channel property last October, meaning taxpayers must pick up the tab for the losses.