Here We Go Again—With Secular Newspapers

The two major newspapers in our state have not been keen at all (putting it mildly) on the Ark Encounter and its goal of bringing parts of the Bible to life and presenting biblical events as true history—including a wooden full-scale Noah’s Ark here in northern Kentucky (and in the same region as our Creation Museum). The Louisville paper, the Courier-Journal (the largest paper in the state), and the Lexington newspaper (the Herald-Leader) have featured several articles and editorials in the past several weeks that have attacked the Ark project and also Gov. Steve Beshear for supporting it.

The Louisville paper is preparing an article that will probably appear tomorrow (Sunday) and which will apparently take another swipe at the Ark Encounter. We are aware that the reporter has been asking people in the theme park industry for their views on the Ark Encounter and its yearly attendance projections. Supposedly, there are people at theme parks who have been contacted by the paper who are skeptical about the Ark’s success and have shared that with the paper. Yet since they have not conducted any kind of study on such an attraction and its theme, their opinion is mere guesswork and not based on any hard data.

Mark Looy, our CCO, has sent me a report on how the two state newspapers have been misrepresenting the project and are determined, apparently, to move it out of the state and take millions of dollars in revenue and thousands of jobs with it. How is that for responsible journalism when they not only horribly misrepresent the Ark Encounter, but do so in a time with a shaky economy and so many people unemployed?

Ken:

It is regrettable that many journalists/bloggers, most of them intentionally it appears, have left people with a totally wrong impression about the state’s involvement in the Ark Encounter. Several of them either give false reports or leave the impression that the Ark project will be a drain on Kentucky’s state revenues. To be clear: the tax incentives, in the form of a rebate of sales tax we collect at the Ark, will NOT be a grant of state funds to help build the Ark Encounter; no money to either build or operate the Ark Encounter will come out of someone else's pocket and away from state programs (e.g., social services, schools, etc.). Only recently, after a few of its Ark articles appeared, has the Louisville Courier-Journal paper even mentioned the true nature of the incentives and the rebate (and only in passing and further down in a recent article); for weeks, they were leaving readers with the impression that the Ark would be a drain on state revenue.

With this report, I will deal with two major items: 1. to correct the misreporting of so much of the media, especially in our state, and 2. to share reasons why the Ark may attract some very large crowds, contrary to what some detractors are claiming (including what some people might be quoted as saying in the Louisville newspaper article that is coming out soon).

1.   Media Misrepresentations of the Ark Encounter

In the widespread reporting that has wrongly implied that the Ark Encounter will be a drain on the state’s budget (as I mentioned above), another thing has largely been omitted by the press: that the state’s coffers will actually benefit tremendously when the Ark opens. The part of the sales tax that the state will keep, plus payroll and property taxes collected from the 14,000 people who are projected to be eventually working in the region at the Ark Encounter and at other new businesses that will be created, will be significant. Also, the sales tax collected by the many newly created local businesses through the Ark’s ripple effect will also add revenue to the state coffers (e.g., the sales taxes collected by hotels, gas stations, restaurants, shops, etc. in the region).

Bottom line: Kentucky taxpayers will not pick up the tab, and there is no financial risk to the state in the construction and operation of the Ark if the tax rebate is approved. Furthermore, think of it in this way as well: the state wouldn’t collect any sales tax from the Ark Encounter if it was never built. Moreover, if the Ark Encounter moves out of state, not only will hundreds of millions of dollars in sales tax revenue be lost to Kentucky, but so will several thousand jobs.  Plus the sales taxes, property taxes, and other applicable taxes collected by the state, city and county—which would far exceed the rebate offered to the Ark Encounter—will also be lost. This all seems so basic, but if reporters don’t have much background in economics, they may miss the significance of the rebate plan – or intentionally hide the rebate aspect from readers if they really do understand the nature of the rebate.

As we look back on the terrible reporting by the Louisville and Lexington newspapers on the nature of the tax incentives (especially the omission of essential information), we now have a better understanding of the significance of the admonition: “Tell the truth, the WHOLE truth, and nothing but the truth.” While newspapers can present information accurately, when they omit key information, they can leave a totally wrong impression with their readers. With many reporters, they apparently hope the reader will connect some dots for themselves and arrive at a wrong conclusion, especially when they write things like “tax incentives from the state will be offered to the Ark Encounter and the Ark will receive money from the state.” The unwary reader is led to believe from such a comment that the project will be a drain on state revenue. This kind of tactic is not ethical for anyone pretending to be an honest reporter when that reporter doesn’t mention what is clearly a rebate offered through the Tourism Development Act of Kentucky.

To summarize the impact in the state: once the Ark Encounter opens, the total economic impact is expected to be $500 million in the first year alone (including final construction on the Ark project itself). The only people to pay taxes related to operating the Ark will be the Ark Encounter visitors: they will pay sales tax at the attraction (e.g., on tickets, food, and merchandise), and the state – through its Tourism Development Act -- will rebate a portion of the sales tax to the Ark Encounter LLC based on meeting attendance-performance marks.

As Lou “Steve” Stevens, the president of the regional Northern Kentucky Chamber of Commerce observed in a December 2010 letter to the Herald-Leader: “Kentucky taxpayers will not pick up the tab and there is no financial risk to KY. This is not ‘stimulus funding’ in that no money will be taken out of the state budget to fund the Ark’s construction or its operation. ...  Additionally, many different taxes will be paid by the numerous indirect business activities created by the massive project.”

It appears that many of the Ark’s critics are far more concerned about the state supporting tax incentives for an attraction that will feature elements from the Old Testament than they are about  unemployed people (10% unemployment in Kentucky) and a cash-strapped state that is desperately seeking additional revenue to balance its budget and provide needed services. And there is no risk to the state. If we don’t achieve the attendance figures, then our portion of the rebated sales tax is lowered, and the state still keeps the rest of the sales tax. It’s the proverbial “no-brainer” – there is no risk to the state.

Attacks on the Ark Encounter project only help to reveal the nature of many Ark detractors, who are so set in their beliefs that they will not even consider how this family-friendly and economically sound attraction will be a great asset to the state during difficult times. Such bias seems to have clouded some reporting and has ultimately misled readers about how the Ark Encounter will really be funded.

Yet that may be the price that some Ark Encounter critics in Kentucky are willing to pay in order to advance their agenda. 2.  Will people come to the Ark when it opens?

First, we should point out that there is something of a proven track record with our Creation Museum. In the first three years of operation, museum attendance (over one million) has been beyond projections (even in a difficult economy), and the quality of the exhibits has drawn rave comments. Even many of the museum’s detractors have admired the museum’s high-tech displays and presentations. As a great boon to the Ark project, the same design team that designed and built the successful Creation Museum is returning for the Ark Encounter.

Before the Creation Museum opened in 2007, a feasibility study was conducted through the consumer research organization, ARG, which indicated that the museum might see 400,000 people come the first year, as opposed to 250,000 (our original estimate). The eventual attendance was 404,000, and so the ARG study was right on the mark. Now, this same group was commissioned to estimate the attendance at the Ark Encounter, and its figure is over 1.6 million people in year one. Given ARG’s accurate forecast for the museum and its national reputation in successfully predicting consumer behavior, we think the 1.6 million figure is a solid (if not overly conservative) estimate.

We should also point out that ARG’s extensive feasibility study indicated that interest (nationwide) in the topic of the Ark crosses religious lines (including those who are irreligious). In addition, geography will play a big role in helping to bring many tourists to the Ark Encounter. Almost 2/3 of Americans live with a one-day drive (less than 650 miles) of the Ark site in Williamstown, plus several million of Canadians are within an 8-hour-drive.

Furthermore, Mr. Cary Summers, the main consultant for the Ark Encounter (and who was interviewed by the Louisville paper for the story that is about to appear) has been involved in the theme park industry for three decades. Mr. Summers was the CEO of Herschend Family Entertainment group in the 1990s; during Mr. Summers’ tenure, Herschend owned and operated 14 themed locations (including Silver Dollar City, Dollywood, Stone Mountain, and many more). His expertise is vital to the Ark project’s success.

Also, Mr. Summers points out that a tourist attraction like a theme park is one of the most dynamic industries a state can pursue, and he predicts that the Ark Encounter will attract over 80% of its guests from out of state.

In addition, the CBS “60 Minutes”/"Vanity Fair" on-line poll that was conducted in late 2009 revealed that the archaeological discovery most people wanted to be made next is Noah’s Ark. The response: Noah’s Ark (43%), Atlantis (18%) Amelia Earhart’s plane (16%), Nixon’s lost tapes (13%), and Cleopatra’s barge (5%).” <cbsnews.com/stories/2009/11/30/earlyshow/main5835957.shtml?tag=mncol;lst;2>  Interest nationwide in a full-size, all-wood Ark is substantial.

Now, we have no reason to inflate the estimated numbers of people who might come to the Ark Encounter.  First, we don’t want to be wasteful and buy more land than is necessary to accommodate the number of people.  If anything, we want to be conservative with the estimated figures and save on land costs. Second, the state is commissioning an independent study (which we pay for) regarding the number of people who might come to the Ark, as well as the associated economic impact for the state. (Our feasibility study is moot as far as the state is concerned in making its decision in possibly offering a rebate.)

So as I await Sunday’s Courier-Journal article (and maybe it will turn out better than we expected, but I doubt it), I will be curious to figure out how people, even if they are in the theme park industry, can speak knowledgeably about a project where they know little of what we intend to do and have no data to draw from (whereas we have conducted our own thorough study of the Ark Encounter’s feasibility with a nationwide survey).  They would be flying blind.

As Cary Summers states concerning those who might be doubtful about the Ark’s success: “We had one of the leading research groups in the country, ARG, conduct a general population survey which showed the potential visitation. ARG has been providing customer-behavior information to hundreds of industry leaders in numerous fields for the last 30 years. We in turn took those detailed projections and had one of the leading theme-attraction research groups review the projections and conduct a second survey. Both surveys support the attendance projections we have announced and the economic impact the project will have on the region.”

Summers added: “These surveys and studies were then coupled with data gathered from the over one-million visitors who have visited the Creation Museum over the last three years, providing us with additional information as to the potential visitation and the financial results that might be expected at the Ark Encounter. All data and survey information gathered adhered to strict methodologies required to derive statistically correct conclusions as to who and how many people will attend.”

Summers closed with the observation: “The only way to draw a conclusion as to the potential success of such a project as the Ark Encounter is to study all the data; use industry experts  to develop financial projections and operating scenarios; and take into consideration the potential economic climate that could exist over the next several years. If you try to draw a conclusion as to the potential success of any project of this size without going through these steps, which took over two years for us to develop, it is futile , for it is based upon superficial thin air. However, our conclusions are based upon valid research and many years of industry experience.”

The readers of this blog today, Ken, should take the information above and then overlay it on the upcoming Courier-Journal article.

I know that newspapers are struggling for survival in our electronic age and thus they have the pressure to stir things up to create headlines and keep up their circulation numbers. But fairness and accuracy are often lost in the process. Now, our local paper, the Cincinnati Enquirer has been fair toward us, and it has even reported on the Ark’s opposition--and that is to be expected. I won’t cancel my subscription to a paper that attempts to present both sides fairly. But the two Kentucky papers have been relentless in their attacks on the Ark Encounter as they push an anti-Christian agenda.

– Mark

Ken