This past weekend I spent time in our nation’s capital, Washington DC. I used some of my time there to visit the future site of the National Law Enforcement museum. Located at 901 E St, and just a few blocks from the Capitol building, the museum will be one of a few new attractions popping up in the downtown DC area over the next few years. The museum, which should open in the fall of 2018, is being built to complement the National Law Enforcement Officers memorial that opened in 1991.
For the last two decades the memorial has been a tranquil, stoic site visited by over a quarter of a million people each year. It has provided a place of reflection for family members and citizens alike to remember those who have made the ultimate sacrifice while in the line of duty.
The museum will be a complement to the remarkable memorial and will be a fantastic display of the heroism, hard work, ingenuity, and grit displayed by those who have chosen to serve and protect. The museum’s purpose will be to improve the public’s understanding and support of law enforcement. The museum will also cover the history of law enforcement, from the early days of law enforcement, to the deadliest day in law enforcement, Sept 11th, to the advancements in policing that have been developed over time.
How does a museum like this get built? I am glad you asked.
While initial funding came from the National Law Enforcement Officers Memorial Fund, the lion’s share of the funding for this significant project can from the municipal bond market. It came from retirees and investors looking to earn a return on their savings by loaning the foundation money. In 2016, $103MM in bonds were issued through the District of Columbia Revenue Authority to fund the construction of the museum. The bonds came to market with no rating attached by any agency, in what would certainly be classified as a high yield issue, with coupons between 6.375 and 10 percent. Payment for these bonds are secured by the borrowers’ gross receipts, including all receipts, revenues, rentals, income and other money received by or on behalf of the borrower (except for restricted gifts, grant, endowments). See the detailed list of specified revenue in the official statement available on EMMA.
It will be interesting to see how the facility performs when it opens its doors in the fall of 2018. Even the most stunning of museums can have a difficult time gaining traction, especially with free exhibits all around them. Recall that the iconic Intrepid museum on the Hudson River in Manhattan, which is now a popular attraction and a must see for any tourist, had its own struggles when it originally opened its doors, needing to negotiate their debt service a number of times before they settled at a level that was manageable.