Battleship New Jersey gets $900,000 DRPA loan guarantee

Kristen Kobley takes a photo of husband Tom and daughters Sarah (left), 14, and Ellen, 10, all of Strasburg, Pa., on the deck of the Battleship New Jersey. Visits to the ship have dwindled.
Kristen Kobley takes a photo of husband Tom and daughters Sarah (left), 14, and Ellen, 10, all of Strasburg, Pa., on the deck of the Battleship New Jersey. Visits to the ship have dwindled.
Posted: June 07, 2012

The Delaware River Port Authority board renewed a $900,000 loan guarantee Wednesday to help keep the Battleship New Jersey moored on the Camden waterfront.

The financially struggling tourist attraction faced default on the loan if DRPA did not extend the three-year guarantee, first signed in 2003. A default would have required DRPA to repay the loan to TD Bank and would have worsened the ship's financial plight.

With declining tour visits and dwindling state financial aid, the battleship has been forced to cut its budget and staff. And it has been fighting an effort by a North Jersey group to move it to Liberty State Park in the shadow of New York City.

Philip Rowan, the new president of the Home Port Alliance, which operates the battleship as a museum and waterfront attraction, said of the loan guarantee, "It's very helpful to us. It's not easy to get financing if you're a nonprofit. ... We're not in a position to get financing without it."

The decision to renew the loan coincided with the release of an investigative report by the agency's new inspector general into DRPA's funding of the battleship and the links between officials at the two entities.

The investigation found DRPA gave $11 million to the battleship between 2000 and 2005, much of it with shoddy bookkeeping and few controls. But the inspector general dismissed claims by Christopher von Zwehl, a leader of the North Jersey group, that DRPA officials had improperly steered DRPA money and services to the battleship.

Von Zwehl, who was active in the unsuccessful effort to base the battleship in North Jersey in 2000, has been pushing to move the ship from Camden. He prompted the inspector general's investigation in January, when he complained to Gov. Corbett, who chairs the DRPA, about improprieties in the agency's financial dealings with the battleship.

"I didn't expect the inspector general, who reports to the CEO, to come out with a scathing report on his own boss," von Zwehl, president of the USS New Jersey Battleship Foundation, said Wednesday. He said he still hoped state Attorney General Jeffrey Chiesa would look into DRPA financing of the ship.

The inspector general also reported Wednesday that DRPA had not followed through with changes of 2010 to strengthen ethics policies, improve financial disclosure, and limit political contributions from vendors.

"It is recommended that these reforms be reviewed, clarified, and consolidated so that the reforms are clearly understood by the commissioners [and] staff," Inspector General Thomas W. Raftery 3d said in his report. "It is further recommended that these reforms should be incorporated into the authority's bylaws and standard operating procedures."

The battleship, built in Philadelphia during World War II, was moved to the Camden waterfront in 2000 after South Jersey won the intrastate battle to host it as a tourist attraction. It opened to public tours in October 2001.

According to the ship's operator, visits have dropped in recent years from 200,000 annually to half that number. And state aid dwindled from $1.7 million in 2010 to $32,500 in 2011.

Earlier this year, the alliance changed leadership and moved to cut its annual budget from more than $3.4 million to $3.0 million. In March, DRPA chief executive officer John Matheussen was replaced as chairman of the Home Port Alliance board by Rodney Sadler, operator of the Wiggins Park Marina in Camden. Matheussen remains on the battleship's board, as does Jeffrey Nash, the Camden County freeholder who is vice chairman of the DRPA board and chairman of its finance committee, which recommended extending the loan guarantee.

Nash should have recused himself from finance committee discussions about the loan guarantee, the inspector general said in his report. But he said Nash's conflict of interest was unintentional, as Nash said he was unaware he was a member of the battleship board and had never attended its meetings.

The loan guarantee was originally for $1 million, but the battleship operator paid off $100,000 in 2009 and 2010. It failed to make a planned $50,000 payment in November.

With the DRPA loan guarantee, the Home Port Alliance will seek to restructure the loan and make smaller principal payments during the summer, Rowan said Wednesday.

He said the Home Port Alliance had completed required audits and charitable registrations and was actively raising money. He said he hoped more state funding would be included in the state budget to be adopted by month's end.

"We're trying to improve our relationship with the state," Rowan said. "The lieutenant governor was here, and we've invited Gov. Christie."

With the busy summer season under way, "we're getting everything shipshape," he said. "I'm seeing the light at the end of the tunnel."

Contact Paul Nussbaum at 215-854-4587 or

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