Virginia Beach exploring new ownership options for Aquarium, not ruling out a possible sale

VIRGINIA BEACH, Va. (WAVY) — For nearly 40 years, people have come to see all things under the sea at the Virginia Aquarium and Marine Science Center.

But could the need for expensive facility improvements mean the publicly-owned attraction might one day see a new owner?

The city of Virginia Beach is currently exploring different ownership options for the Commonwealth’s only aquarium after City Council didn’t fund initial portions of the Aquarium’s multi-million dollar renovation and expansion in the current budget.

Currently the city is responsible for all the buildings and employees of the aquarium while the Virginia Aquarium & Marine Science Center Foundation, a non-profit 501(c)3, own the animals or the exhibits.

Mayor Bobby Dyer said while there is the desire to fund the estimated request of $200 million to $300 million over 10 years, other obligations like the city’s ever inflating costs for flood prevention projects leave them in a tough spot.

The thought is, could another non-profit or even a private owner provide those funds?

Virginia Aquarium planning a roughly $250M expansion

First opening in 1986 off General Booth Boulevard as the Virginia Marine Science Museum, the aquarium has expanded several times over the decades, with the renovation of the South Building expected to be completed next month.

Last November, aquarium staff finalized their master plan that lays out a five-phase approach that would ultimately more than double the main building’s size from 91,900 square feet to 194,300 square feet with a 280,000-square-foot parking garage.

The plan, which has the support of the aquarium’s foundation, would result in a 78% increase in gallons of water, 25 new exhibits, more classroom space and a new water treatment system.

Cynthia Whitbred-Spanoulis, the aquarium’s president and CEO, said part of their goal is to ensure there are new incentives for guests to return year after year. She said the aquarium provides $5.8 million in tax revenue for the city and is third most-visited attraction in Virginia, behind Busch Gardens Williamsburg and Kings Dominion, with nearly 593,000 visitors from July 2022 through June 2023.

But more urgently, she said the aquarium needs to replace exhibits that have reached the end of their useful life, such as the seal, turtle and shark habitats.

“The seal exhibit, if you came (in summer 2022), it was down for repairs,” Spanoulis said this past winter. “If you came (in summer 2022) our ray touch pool was already down for repairs.”

The long-term plan was designed in such a way that would allow for the aquarium to stay open while the exhibits are renovated, Spanoulis said.

It would also prevent the possibility of needing to relocate the animals to another aquarium, something Spanoulis said comes with no guarantee getting them back.

However several council members expressed concern with the cost, even over a period of time.

“We need refurbishing and renovation of rec centers (and) we need new schools,” said Councilman Michael Berlucchi in response to the funding request. “I don’t hear anyone saying we need an aquarium, or a different aquarium.”

Currently, Virginia Beach taxpayers are subsidizing the aquarium to the tune of almost $8 million a year, according to Virginia Beach spokesperson Tiffany Russell. That is equivalent to 1 cent of the real estate tax rate.

The foundation, which supports the aquarium’s annual operating budget to the tune of about $5 million per year, was going to try and find philanthropic help to offset all the city costs of the plans, Spanoulis said.

However, those efforts were paused when City Council didn’t include the initial $3.7 million requested for the project in the fiscal year 2024 budget.

“By delaying the project, you are only making the number (of philanthropic support) grow smaller and smaller,” Spanoulis told council members in April. “(That’s) the message that I have for you today.”

Councilman Worth Remick, whose district includes the aquarium, said he understands doing nothing isn’t an option given the attraction’s impact on the local tourism economy.

It’s estimated the aquarium accounts for $257 million in economic impact.

“Somebody’s got to pay for that,” Remick said, in reference to the capital expenses.

But who other than the city could possibly write the check?

The city manager’s office is now tasked with trying to figure that out.

After looking at 32 of 57 U.S. aquariums accredited by the Association of Zoos & Aquariums and 13 accredited zoos, the city manager’s office found only eight have the model Virginia Beach has, in which the nonprofit supports the mission and philanthropic fundraising while the government owns and operates the facility.

“Another type, which also is the most prevalent model, includes those in which an aquarium is operated and/or owned by a private nonprofit or corporation,” Russell said.

For instance, Ripley’s Aquarium of Myrtle Beach, often viewed as one the main resort competitors to Virginia Beach, is owned privately by Ripley’s Entertainment.

“As part of a complete evaluation of the approximately $200 million to $300 million in funding needed to address repairs, maintenance and expansion of the Virginia Aquarium, the city is exploring alternative ownership and operational models,” Russell said.

As part of that search, the city is looking to gauge interest from potential nonprofits and other private entities in operating and/or owning the Virginia Aquarium.

Two groups responded to what is known as an “RFI,” or request for information. However the city declined to make their names public, citing the procurement law.

At the same time, the foundation is looking to alter their plans to see if there is a way to get the renovations done under the current operating setup.

“We are in the process right now of reworking our plans for a scaled-back approach for the aquarium,” said Daniel Peterson, current chair of the foundation, “something that will still give the look and the feel of a new aquarium. It will bring it up to modern day technology, more modern day exhibits, more interactive exhibits, but also be much more conscious to come up with a price point that is much more achievable with the city’s current budget constraints.”

Peterson, market president for Truist Bank’s commercial lending, said the foundation would consider a privatization of the aquarium, saying it would be “foolish for us not to consider all potential options.”

When it comes to his largest concern right now? It’s time.

‘This is not something we can put off’

“Another strategic focus we have right now is that we are having engineering studies conducted on some of our key exhibits to get a true understanding of the useful life,” Peterson said. “If I have an exhibit that is going to fail in two years and it’s going to take two years to build. I don’t have the luxury of waiting 6, 12, 18 months for the city to go through this exercise they are conducting and nothing comes of it. Then I’m that much further down the line.”

Russell said she didn’t yet know when the information would be presented to City Council, but Dyer said finding a solution is a top priority.

The city recently conducted a survey of more than 500 households within the city to get further opinions.

A majority of people, 65% of respondents, were either neutral to very supportive of the city investing $200 million to $300 million to repair and expand the aquarium. But what wasn’t asked is how supportive they’d be of paying more in taxes or cutting services or other projects to make up the difference.

In terms of owners and operators, just over 54% of those who responded to a survey said they were either “very supportive” or “somewhat supportive” of a private nonprofit or corporation assuming financial and programming responsibility for the operations of the Virginia
Aquarium. The city would still own the building.

Only 41% said they were “very supportive” or “somewhat supportive” of a sale, with a private nonprofit or corporation taking over both the operations and ownership of the Virginia Aquarium.

The survey also confirmed Berlucchi’s comments. Streets and roads, stormwater/flooding and school buildings were listed above Virginia Aquarium infrastructure as financial priorities.

2023-Virgina-Aquarium-Survey-Findings-Report-Nov-10-2023-002-1Download

While several council members say the relationship between themselves and the foundation have been strained over the funding issue, Peterson said that isn’t true.

“The relationship between the city and the foundation is as strong as it’s ever been,” Peterson said.

He said he will be submitting a new scope of renovations to City Council within the next few weeks, positive the aquarium can remain a star attraction.

“We want to continue to work with them,” Peterson said, “and be a good partner and a good steward to guide the future of the aquarium.”

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