Sail Boston in dire $traits: Tall Ships organizers face $500G shortfall

By Joe Battenfeld

June 28, 2000 Web posted at: 11:43 AM EDT (1543 GMT)

In this story: State may not help Problems abound RELATED STORIES, SITES

BOSTON, Massachusetts (The Boston Herald) -- Sail Boston 2000 has run aground with financial problems, facing at least a half-million-dollar funding shortfall just two weeks before a parade of tall ships is due to arrive in Boston Harbor, sources said.

The non-profit organization is taking the unusual step of trying to land a bank loan to pay the cost of running the taxpayer-funded event, and met with state officials yesterday to try to secure the money.

``They're broke,'' one source familiar with the event told the Herald.

Sail Boston officials also recently signed several contracts with minority-owned firms to address concerns that the organization was leaving itself open to racial discrimination questions.

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Organizers yesterday confirmed the funding problems but said they would not affect the running of the July 11-16 extravaganza, which is expected to draw several million visitors.

The looming deficit plaguing Sail Boston comes despite millions in financial aid from taxpayers.

The state Office of Travel and Tourism has already funneled $1.5 million into Sail Boston and has earmarked another $750,000 in next year's fiscal budget. In addition, the Massachusetts Port Authority is spending more than $1 million on security and other waterfront services.

The city of Boston is not making any direct payments but is incurring costs to put on the event.

In addition, the Massachusetts Convention Center Authority earlier this month kicked in $100,000 after Sail Boston officials pleaded for money, officials said.

But numerous sources confirmed that the organization doesn't have enough money to pay its expected bills and is still desperately looking for help.

Sources said the shortfall is partly due to a lack of support from corporate sponsors, and organizers are hoping state taxpayers foot the rest of the bill.

``They're basically eking this thing through,'' a source said.

Patrick Moscaritolo, president of the Sail Boston 2000 board of directors, confirmed the organization is running out of money, but blamed the deficit on the fact that a new infusion of state money won't be available until well after the event occurs.

Moscaritolo said he didn't know the details of why the organization ran out of money so soon.

``It's a cash flow issue,'' Moscaritolo said.

Moscaritolo met yesterday with Deputy Secretary of Administration and Finance Peter Forman in hopes of using the state funding as collateral for a loan.

But officials were skeptical of the request, saying the $750,000 in next year's budget, which begins July 1, hasn't been approved yet by the Legislature.

Sail Boston received a $1.5 million grant from the state last year - spending half of it and allocating the rest - but under state law, any funds not actually spent during the fiscal year ending on Friday must be returned to general funds.

The organization is asking the Cellucci administration to roll over the remaining funds into next year's budget. But even if the governor agrees, Sail Boston would still fall short of the cash it needs to pay its bills, sources said.

Moscaritolo said he wants to deal with the deficit now to keep the event from losing money.

``What we want to avoid is the situation like First Night,'' Moscaritolo said, referring to Boston's financially-troubled New Year's Eve festivities.

The financial problems are the latest snafu to hit the Sail Boston event, which is expected to draw several million visitors to the city's waterfront to watch the parade of 120 ships.

The manager of the event, Dusty Rhodes of Conventures, Inc., faced questions last year about whether the city would be able to attract enough tall ships to the harbor.

The Boston event is competing with another tall ships parade, OpSail 2000, which is taking place in New London, Conn.

Rhodes later faced criticism after it was revealed she was offering $100,000 bonuses to ship captains in a bid to lure them to Boston.

State officials subsequently prohibited any spending of taxpayer money on the bonuses.

A number of state officials have privately raised questions about Rhodes' handling of the event.

Massport was forced to pay an $800,000 tab for the 1992 tall ships parade after Rhodes' organization could not pay.

Rhodes' firm earned hundreds of thousands of dollars in management fees in 1992, but Moscaritolo said he didn't believe she has been paid yet for this year's event.

Sail Boston 2000 recently hired two public relations agencies, Regan Communications and Collette Phillips Communications, to promote the event and douse any criticism.

Phillips, who is black, was hired partly in response to complaints from at least one Sail Boston board member that the event was excluding minorities.

``We were concerned,'' Moscaritolo said, adding that several other minority contractors also have been hired.

The Urban League is also planning a fund-raiser at the Sail Boston event, he said.

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