KEARNEY — The Classic Car Collection is closing.
The attraction is billed as the best public collection of classic automobiles between Chicago and Denver, but its visitor numbers — averaging 8,000 to 13,000 annually — never rose significantly to offset expenses, and it has become a drain on taxes collected at local hotels and motels to promote tourism.
Someone complained last year about tax support for the attraction, and the Nebraska State Auditor office reviewed the use of tourism promotion funds as well as the relationship between the Classic Car Collection and the Kearney Visitors Bureau, which is the source of those funds.
“We took a chance and it just didn’t work,” said Roger Jasnoch, executive director of the Kearney Visitors Bureau, who played a major role bringing the privately owned car collection to Kearney nine years ago.
Brad Kernick, one of the organizers of Kearney’s annual Cruise Nite festival, also played a key role with the Classic Car Collection. He helped establish a relationship with the Elkhorn collector, Bernie Taulborg, who donated his cars to launch the collection. Kernick later became a member of the Classic Car Collection board of directors as well as the board of the visitors bureau.
“I’m personally devastated and heartbroken,” Kernick said about the decision to close the attraction. “I’m not willing to give up yet. I don’t know what that means, but I’m not willing to give up.”
The Classic Car Collection, Featuring Bernie and Janice Taulborg’s Automobiles, is slated to close in May 2021 — the attraction’s 10th anniversary. At that time the Taulborg vehicles will be auctioned to repay the car collection’s loan from the visitors bureau. The loan amounts to about $3.3 million today, but it likely will increase by May 2021, Jasnoch said.
The liquidation of the Taulborg collection will wait until May 2021, Jasnoch said, because the 10th anniversary is the trigger that allows total liquidation. The agreement also allows for the sale of vehicles prior to the 10-year anniversary — at the five- and seven-year marks — to cover operating expenses and startup costs, such as renovation of the showroom.
The agreement with the Taulborgs reads: “After such period (10 years) in the event that all or substantially all of the collection is liquidated, the Taulborg appointee (on the CCC board) shall be consulted regarding the plan of liquidation. Such consultation and advice, however, will be advisory only ...”
The loan from the visitors bureau to car collection was addressed in the state auditor’s review of the finances of the visitors bureau, along with the individuals serving on both organizations’ boards.
Of the nine members of the Kearney Visitors Bureau board, four also sit on the Classic Car Collection board.
Members of the visitors bureau board are chairman Tim Mannlein, Paul Younes, Tammy Jackson, Kernick, Jackie Purdy, Ben Holl and John Payne.
Kernick, Purdy, Holl and Payne also sit on the car collection board along with Gene Beerbohm, Al Young, Yvonne Deyle-Barth, Marv Dawes and Jeff Knapp.
County Board Chairman Bill McMullen of Kearney and City Councilman Jonathan Nikkila are ex-officio members of the Kearney Visitors Bureau board.
“They (car collection) really gave it as hard a try as I’ve ever seen, but it’s just not attracting the visitors,” McMullen said. “The volume is so small and the cost is so high.”
Nikkila said the car collection was commanding tourism promotion resources that might have been better spent elsewhere.
“What’s the rate of return for cranes or other projects? It was a lot of money that was going into this (car) museum,” Nikkila said. “We felt it is time to take another look at how the revenue is used for the community. There are other projects out there that could be more beneficial. It may be time to look in another direction.”
The visitors bureau receives about $1.8 million annually for tourism promotion. Of that sum, $1.2 million is from the county’s lodging tax and $600,000 is from the city’s occupation tax.
Documents from the state auditor said its financial review of the visitors bureau was prompted because of “some financial concerns regarding the distribution of money” from two funds: the County Visitors Promotion Fund and County Visitors Improvement Fund.
Jasnoch said since it opened in 2011, the car collection has received $3.3 million from the city of Kearney’s 2 percent occupation tax and Buffalo County’s 4 percent lodging tax.
The visitors bureau uses the $1.8 million in city and county revenues to support and promote various attractions and to recruit and to assist events in Buffalo County.
The $3.3 million the visitors bureau loaned to the car collection during the past nine years included $1.1 million to renovate the space in the Cabela’s building that houses the collection. Additionally, Jasnoch said the visitors bureau provides about $250,000 annually to the car museum to cover its $10,000 monthly rent to Cabela’s along with utilities and other expenses, for an average monthly total of $16,000 to Cabela’s. The collection also has payroll and other costs to maintain its collection of automobiles.
According to the state auditor’s findings, the visitors bureau has corrected several bookkeeping issues uncovered by the review.
One of the issues involved comingling of revenues. Under contracts with the city and county, part of the hotel and motel taxes is to be used to promote events and attractions and part is to be used for brick-and-mortar improvements.
Comingling the funds made it difficult for auditors to confirm the tax revenues were utilized for both promotional and brick-and-mortar uses.
Regarding the $3.3 million loaned by the visitors bureau to the car collection, state auditors noted the loan may have violated the Nebraska Constitution, which says “the credit of the state should never be given or loaned in aid of any individual, association or corporation,” with the exception of student loans.
Jasnoch said the visitors bureau is independently audited each year and that procedures have been improved in accordance with the state auditor’s recommendations.
He said one of the final chapters of the Classic Car Collection will be the auction in 2021. He said the Taulborg vehicles are appraised at $4 million — enough to repay the visitors bureau for the tax revenues that kept the car museum afloat.
“We all agree that in the spirit of openness that there should be a public auction where everyone can bid on the cars,” he said.
Jasnoch said there has been no decision how the auction proceeds might be used.
“We’ll get a good amount of the money we invested back,” Jasnoch said. “We’ll probably take the question of how to use it to the tourism industry (representatives) and see what they think. What kinds of things would people like to see that will bring visitors to Kearney?”