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Banker working to save storehouse of Altoona history

Sunday, June 02, 2002

By Tom Gibb, Post-Gazette Staff Writer

ALTOONA -- Banker Dean McKnight was just hunting something to keep himself busy in his impending retirement.

So, 2 1/2 months ago, the senior vice president at M&T Bank signed on with the board of directors at the Altoona Railroaders Memorial Museum, a repository of artifacts and tales of the industry that fathered Altoona and made it the busiest rail center on the planet.

"I figured, 'What a nice thing to do after retirement,' " he said.

Indeed. At least if your idea of nice is discovering that, to everybody's astonishment, the institution is little more than spare change from insolvency, that the future -- if there is one -- means extreme belt-tightening and a major revenue hunt.

"They have a heap of trouble," said David Atkinson, aide to state Senate President Pro Tempore Robert Jubelirer, a local Republican who helped shepherd millions of state dollars to create the museum.

And despite a desperate rescue plan in the making, it's anything but certain that the place will come out of it alive.

The museum, chronicling how almost all life in Altoona moved to the rhythm of the Pennsylvania Railroad, opened four years ago, featuring depth and polish purchased with $16 million in state and federal money.

Last year, the museum drew 45,000 visitors, at least 34,000 from beyond Blair County and its surrounding counties.

"It's a high-quality museum," said Richard Burkert, president of the Pennsylvania Federation of Museums and executive director of the nonprofit agency that operates the Flood Museum and the Heritage Discovery Center, 45 miles away in Johnstown.

No less than William Withun, transportation curator with the Smithsonian Institution's Museum of American History, deemed the Altoona museum "the standard by which all future [transit] museums ... will be judged."

Then, a few weeks ago, came banker McKnight, telling museum officials after a hard look at the books that the operation had all but devoured its $250,000 line of credit, owed another $250,000 to vendors and was $60,000 in arrears on sales and payroll taxes.

The museum, a nonprofit organization with a $1.5 million annual budget, needed $750,000 just to live out the short term, he said.

The museum has not released its 2001 results, but museum officials were aware of losses totaling $320,000 for 1999 and 2000. Still, they seemed surprised by how dire the situation had grown.

"They said, 'Wow, I didn't know that,' " McKnight recounted. "I said, 'Technically, you can't afford to open the doors. You're bankrupt.' "

The PRR was a god to Altoona. And this museum, a showcase for the pre-World War II heyday, when the PRR employed 16,500 people here, is almost an Altoona shrine.

And then came McKnight, barely ushered in as treasurer before examining balance sheets that nobody perused closely enough and warning that the shrine could be shuttered.

He envisioned the worst case, a liquidation of museum artifacts, from tools to one-of-a-kind photographs. Closing forever! Everything must go!

He even sweated out the nightmare that a railroad jewel, the K4-s 1361, last survivor of a vaunted line of locally built steam locomotives, could go to the highest bidder.

"It'd rip my heart out," McKnight said. "You think, 'A lot of other museums are going to end up with interesting things in their pockets because we couldn't sustain our operation.' "

The museum's problems cast uncertainty over Horseshoe Curve, a rail landmark five miles west of Altoona where the museum oversees tourist facilities and draws an estimated 55,000 visitors a year.

Rail author and historian Daniel Cupper of Harrisburg said that as passenger rail service and rail employment decreased, America's attachment to railroading has faded. That in turn left rail fans to satisfy their railroad cravings at museums.

But after an increase in the number of rail museums, "some observers of the scene believe there's going to be a shakeout," Cupper said.

The opening bell of the summer tourist season, though, was not the time for the Altoona museum to surrender, top officials decided.

McKnight stayed, but the museum's 11 other directors -- "the builders and dreamers," he called them -- agreed to resign. They are being replaced by what McKnight portrays as fellow experts at budgets and balance sheets.

"If I didn't think we had a chance, I wouldn't be doing this," McKnight said. "I'm an old man with a bad heart."

"I don't know how you crawl out from under that debt," Burkert said, "but the museum is an important asset."

The plan is basic: Make more and spend less.

"It's going to be a tight hand-to-mouth operation for now," McKnight said.

The museum's paid work force, 34 when it opened in 1998, has been slashed to 16 and will be reduced further, McKnight said.

"We'll cut to the bare minimum," museum Executive Director Cummins McNitt predicted.

Around the remaining paid force, he expects to add more volunteers to the current corps of 45.

Then comes raising revenue -- probably another $1 million every year, McKnight said.

A decade ago, that was simpler.

That's when the new museum was in the making, a muscled-up successor to a modest Railroaders Memorial Museum, opened 22 years ago in what is now a storage building.

U.S. Rep. Bud Shuster, the Bedford County Republican who chaired the House Transportation Committee, was in office, using his influence to send millions of dollars at a clip back to home-district projects such as the museum.

He's retired now and replaced by son Bill Shuster, a freshman congressman without leverage to earmark federal money at will.

Jubelirer remains in office.

"But this isn't a good time to come knocking," said Atkinson, the Jubelirer aide. "The state is not awash in money."

So the museum's emergency fix-it squad is dealing with ordinary museum economics.

A prime rule of the trade is to hunt benefactors and alternate ways to raise cash because you'll never turn a profit at the gate, said David Dunn, director of the state-owned Railway Museum of Pennsylvania at Strasburg, 10 miles southeast of Lancaster.

"There's this vast misconception that museums make money through admission fees," he said. "There isn't a museum in this country making a profit through admission fees. ... They have to supplement it by renting their facilities, by conducting capital campaigns."

Burkert figures museums do well to cover 35 percent of costs with ticket revenues. But the Altoona museum used gate receipts, with its most expensive ticket going for $8.50, and the meager take at its gift shop to cover 55 percent of expenses, McNitt said.

In the meantime, the museum did too little work at enlisting foundation help, local donations, corporate sponsors and regional tourism, McKnight said.

That will change. McKnight talks, for instance, of museum envoys packing off to cities such as Cleveland and Baltimore, peddling tour packages stuffed with stops ranging from the rail museum, to Johnstown's museums, to Altoona's showplace minor-league baseball stadium, home to the Pirates AA farm team, the Curve.

Still, the Altoona museum can't match the location offered by bigger railroad counterparts such as Strasburg and federally backed Steamtown National Historic Site in Scranton.

Strasburg is in the Lancaster County tourist mecca. Steamtown is near the junction of two interstate highways. Between them, the two museums outdrew their Altoona counterpart 6-1 last year.

But, Cupper said, you celebrate history where it occurred.

"Gettysburg happened where Gettysburg happened," he said. "If the museum is going to mark the greatest railroad shop town in the world, it has to be in Altoona."