Frost science museum, in bid to end fiscal crunch, dismisses board

The Frost Museum of Science, under pressure as the institution seeks public help to finish its new downtown Miami home amid a severe budget crunch, on Wednesday dissolved its board of trustees and replaced its longtime co-chairs.

The sweeping move, which came in a board vote Wednesday morning, sets the stage for the Frost to receive a proposed $45 million grant from Miami-Dade County and a short-term loan from its principal benefactors to finish construction of its new $275 million home in downtown Miami’s Museum Park.

Initially taking the place of the 40 trustees is a four-person board consisting of Cesar Alvarez, senior chairman of the Greenberg Traurig mega-law firm; Phillip and Patricia Frost, the major contributors after whom the new museum is named; and Miami health-care entrepreneur Richard Pfenniger. Only Patricia Frost was already on the museum board; Alvarez had served in prior years.

The four will help recruit a new, smaller board with more fundraising firepower than the old one, said Michael Spring, special advisor to Miami-Dade Mayor Carlos Gimenez. An inability to meet private fundraising goals was a key factor in the fiscal shortfall at the museum, which ran out of money for construction and was unable to get a bank loan to finish the job. Some critics have also said privately the old board was too large and unwieldy.

Wednesday’s vote also means that longtime museum board chairs Dan and Trish Bell, significant donors who have spearheaded the new building project, are out. The Bells will continue to function as “chair emeriti” in an advisory capacity, said Frost spokesman Joseph Quiñones. Other former board members will be invited to join new advisory committees, he said.

In a release, the museum said the Frosts asked that the board be reconstituted as a condition of providing the institution a bridge loan to pay its general contractor, Skanska, until Miami-Dade can finalize its grant package. The county proposal should be ready for final approval by the Miami-Dade commission in April, said Spring, who has been serving on the museum board in a non-voting capacity.

But it’s clear that Gimenez’s proposed bailout also helped precipitate Wednesday’s board move. The county, which would convert a promised 20-year operating subsidy into an upfront payment to cover the construction funding shortfall, had also asked for board changes as a condition of its assistance.

The county wanted to see not just more heavyweights on the board, but also specifically that Spring and deputy county mayor Ed Marquez be named to the board’s executive committee. Spring said he expects that to happen “over the enxt few days” under the new leadership.

“What you will see unfold are a set of conditions we’re asking the museum to meet that, hopefully, will result in greater accountability and transparency,” Spring said.

County taxpayers provided the museum $160 million towards construction. That money ran out in January, though construction work has not been interrupted. The museum has spent all its own available cash for construction, around $30 million.

The museum was supposed to raise the balance of the cost of erecting the elaborate new building and its exhibitions, which include an aquarium and a high-tech planetarium. It fell short, raising just under $60 million in secure pledges — meaning contributions that donors are contractually bound to deliver. The museum tried to get a $105 million bank loan using pledges as collateral, but the application was turned down.

The Gimenez administration then offered to fill half the gap but said it would not give the museum any operating subsidies for 20 years. Spring and Quiñones also said the museum will not use county money to repay the Frosts’ bridge loan. The museum did not disclose the loan amount or interest rate, which Quiñones called “nominal.”

Spring said those figures will become publicly available once the county administration presents its plan to the county commission, likely next month. He said museum officials, meanwhile, have reopened negotiations with Northern Trust Bank on a loan of about $40 million based on the secured pleges, enough to finish and open the new building.

Frost also is paring down its building plan, but cuts won’t impact any of the new muesum’s main attractions, Frost CEO Gillian Thomas said Wednesday during a tour of the site. In all, at least $20 million worth of projects have been shelved, Thomas and county officials said, including a rooftop garden and event space that won't be getting cover from the elements.

A plaza envisioned as a cluster of free outside exhibits instead will remain paved open space. And the white globe housing the planetarium will have to wait for a pricey exterior light show allowing it to project images of the moon or Milky Way to the automobiles and pedestrians outside.

The plan is to add some of the missing features once the museum opens, which the non-profit’s leadership expects will bring a surge of interest in naming rights and donations.

Herald staff writer Douglas Hanks contributed to this report.

This story was originally published February 10, 2016 at 3:27 PM with the headline "Frost science museum, in bid to end fiscal crunch, dismisses board."