Loan Restructuring for the Wolf Trap Foundation for the Performing Arts
AFMD-88-54FS: Published: Sep 19, 1988. Publicly Released: Sep 19, 1988.
- Full Report:
In response to a congressional request, GAO analyzed alternatives for restructuring debt that the Wolf Trap Foundation for the Performing Arts incurred to repair the Filene Center, including: (1) restructuring the Foundation's entire debt over an extended period; (2) forgiving a portion of the debt, particularly the accrued interest, and restructuring the remaining balance; (3) reducing the debt by half of the overrun costs and restructuring the remaining balance; (4) accepting Foundation-owned property in lieu of payment; and (5) transferring the Filene Center, at its estimated replacement value of $36.3 million, to the federal government in full satisfaction of the debt.
GAO found that: (1) although the Foundation had profitable seasons in 1986 and 1987 which resulted in a combined net income before interest expense of $1.5 million, it could not timely repay its outstanding government loans and accrued interest of $13.1 million in November 1988; (2) if Congress forgave the accrued interest of $4.7 million, the amount remaining for restructure would total $8.4 million; (3) if Congress forgave the portion of the debt that represented 50 percent of the cost overruns, the amount remaining for restructure would total $7.2 million; (4) the book value of the Foundation's reported land, buildings, and improvements totalled $3,362,000; (5) the 30 acres of real property adjacent to the park was donated with the expectation that the Foundation would develop it for educational and cultural purposes; and (6) transfer of the reconstructed Filene Center, at an estimated replacement cost of $36.6 million, was not feasible, since its title was vested in the United States and was not a Foundation asset.