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Will $3M anonymous donation save National Museum of Industrial History?

The National Museum of Industrial History, the embattled nonprofit accused of misspending millions of dollars, has a $3 million commitment from an anonymous donor and wants to start construction once the Pennsylvania attorney general's office finishes its probe.

The donation fills the funding gap that museum officials have been working to close for 17 years in order to open the tourist attraction in south Bethlehem.

Whether officials would be ready to break ground was put into question this year when a Northampton County grand jury investigation found that the museum officials mismanaged $17 million in donations and grants. The grand jury recommended Attorney General Kathleen Kane look into the matter.

Museum CEO L. Charles Marcon, who said the museum has been in a holding pattern, said he met with a state official last week and is under the impression the investigation will soon be concluding. If the report is favorable, he hopes to begin construction on the museum's first-floor interior.

Meanwhile, he said he got a verbal commitment from the anonymous donor and expects to receive the money this month.

"This donation is enough for us to start construction," Marcon said Thursday.

But, he cautioned, the museum will still be raising money — to the tune of $1 million — to offset first-year operating expenses that ticket sales don't cover. He said the amount needed could be reduced if the museum finds a partner.

The museum has mentioned Northampton Community College as a potential partner to develop the museum's second floor. And NCC has been making plans to establish a Center for Innovation and Entrepreneurship, an automated manufacturing training center.

But South Side Campus Dean Paul Pierpoint said there have been no recent discussions to locate the center on the second floor of the museum. For now, NCC is proceeding with plans to put the center on the first floor of its Fowler building adjacent to the museum.

There remains at least one major hurdle to clear before a partnership is possible. If NCC is to use state grant money to build the center, it must own the building or at least the portion of it where the center is located, Pierpoint said.

Marcon said the $3 million donation reduces the chances of the museum's "monetizing" or selling its building, the 1913 Bethlehem Steel electric repair shop.

"Whether we partner or not, we're happy to hear they have the money to proceed," Pierpoint said. "We'd love for there to be an operating museum next door."

Other possible partners include the Delaware and Lehigh National Heritage Corridor, which manages the 165-mile towpath and merged last year with the National Canal Museum; and Historic Bethlehem Partnership, which manages historic Moravian sites in Bethlehem.

Bethlehem Mayor Robert Donchez said this week he will write a letter to the state to request an extension of a $4.5 million Redevelopment Assistance Capital Program grant that Gov. Tom Ridge awarded in 1999. Only $1.4 million of the grant has been spent since 1999.

Donchez said he wants to see the results of the attorney general's investigation before committing the money from the state grant. The city administers it and would have to sign off on expending the remaining $3.1 million.

The museum also was counting on $340,000 from the tax increment financing zone, a special taxing designation to pay for infrastructure improvements on parts of the former Bethlehem Steel property.

Over the last decade, the museum put a new roof on the building, power-washed the brick exterior and installed new windows.

The museum was proposed in the 1990s to be the anchor of an entertainment district on the former Steel plant site in south Bethlehem. But with funds short, it has since been scaled back to a fraction of the original plan. The property is now anchored by the Sands casino, which has helped generate hundreds of millions of dollars in redevelopment.

That includes the ArtsQuest Center at SteelStacks, the PBS39 Media and Education Center, the Bethlehem Landing visitors center, stores, restaurants, a hotel and concert venues wrapped around public plazas and parking lots.

The museum has since downsized its plans and broken it into phases, tackling the first floor in its first phase. It will include artifacts from the Smithsonian Institution, including its collection from the Centennial Exhibition of 1876 in Philadelphia, as well as former Steel artifacts.

Last year, museum officials estimated the first phase would cost about $5 million.

Northampton County District Attorney John Morganelli said he's happy to hear that the reported donation could pave the way for the museum's completion.

"Mrs. Hurd and a lot of other people gave a lot of money to this, and it would have been a shame if the whole thing collapsed," said Morganelli, referring to the late philanthropist Priscilla Payne Hurd, who gave millions to the museum. "I've always said I hoped it was ultimately completed. I never wanted it to fail. We merely called attention to the money they were squandering."

He said he still believes Steve Donches, who stepped down as CEO in the months after the Northampton County grand jury released its findings, should be fired for misusing so much museum money. Donches has given up his title, and his $180,000-a-year salary was cut in half while Marcon was named the interim, unpaid CEO.

Morganelli said he's chosen not to interject himself into the attorney general's investigation, but has been kept up to date and expects the investigation to conclude by the end of the month.

The attorney general's office did not respond to a request for a comment.

"My thinking is that if the [attorney general] does anything, it won't be to shut [the museum] down, but maybe to keep their feet to the fire on how they spend their money," Morganelli said. "They've told me they're close to finishing."

Morganelli recalled that as a child growing up on Evan Street in south Bethlehem, he'd stand in his yard at night to look at the blast furnaces. So, when the museum opens, he'll be there trying to bring back those memories.

"My father and uncle worked at Bethlehem Steel," Morganelli said. "I'll buy a ticket. Why not?"

WHERE IT STANDS

Funds raised since 1997: $17 million to $19 million

Money spent to renovate museum: $2.5 million

Verbal commitment: $3 million

State grant: $3.1 million

Bethlehem tax increment financing district: $340,000

Cost of first phase: $5 million*

* Estimate from September 2013

Sources: Northampton County grand jury report, National Museum of Industrial History

Copyright © 2014, The Baltimore Sun
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