Battle Wages Over Battleship’s Future

Tara Nurin | August 10, 2012 | More Issues
For the past decade, an ugly fight has been going on about who commands the Battleship New Jersey and where it will be berthed

The most decorated battleship in naval history will not berth in Liberty State Park, Bayonne, or anywhere else in North Jersey, insist its owners. This certainty comes despite an ongoing attempt by some supporters of the decommissioned Battleship New Jersey to move it from its permanent home on the Camden Waterfront.

Since being donated in 2000 by the Naval Sea Systems Command (NAVSEA) to the nonprofit Home Port Alliance (HPA), which operates it as an interactive museum and memorial, the World War II-era battleship has been the target of a campaign to shift it to a North Jersey site that’s more visible to tourists.

But the HPA says regardless of the high-profile tug-of-war that’s sucked in mayors, congressmen, and governors, it never had any plans to move the ship from its landing across the Delaware River from Philadelphia, where it was built and commissioned. Further, a letter NAVSEA sent several months ago to the USS New Jersey Battleship Foundation, Inc., which is spearheading the relocation efforts, re-affirmed HPA’s exclusive ownership.

Nevertheless, in an ugly fight that pits ship supporters from north and south against one another, the foundation continues to write pleading letters to the governors of New Jersey and Pennsylvania, instigating investigations into the HPA’s affairs by the NJ Office of the Attorney General and Delaware River Port Authority (DRPA) .

“We formed the alliance to bring the ship here to help revitalize the Camden Waterfront,” said Phil Rowan, the newly appointed executive director, who along with Sen. Donald Norcross (D-Camden), DRPA CEO John Matheussen, and other Camden-area politicians and advocates, formed the HPA and wrote the 1,500-page application that won them the confidence of the Navy. “We were awarded the ship, we built the pier, we operate it, we pay the electric bills. Now we’re focused on coming up with new marketing strategies to bring more people here.”

Repossessing a Battleship

NAVSEA’s Inactive Ships Donation Program states that the Navy can repossess a donated ship only if its titleholder fails to maintain the ship in “a condition satisfactory to the Secretary of the Navy. A NAVSEA spokesperson has confirmed that the division sent a letter to the foundation in February, unequivocally informing it that “the Homeport Alliance [is] the legal owner of the ex-New Jersey and that any proposal regarding the ship should be made directly to Homeport Alliance.”

But Foundation president Chris von Zwehl denies receiving such a letter and continues to say it should be allowed to take over the financially struggling ship. Zwehl believes the New Jersey won’t ever thrive in Camden, and he questions whether the HPA can afford to periodically dry-dock the ship to perform significant maintenance on its hull.

The HPA counters by pointing out that the Delaware’s fresh water requires dry docking once every 18-20 years, while the salt water of the Hudson River would require the ship to undergo such maintenance every five or six years. Nevertheless, the foundation asserts the ship should be moved closer to New York City where tourists can more easily visit and take advantage of the ferries the group says it would run between the “Big J,” as the battleship is nicknamed, Freedom Tower, and the popular USS Intrepid aircraft carrier, berthed in New York Harbor.

The foundation, whose president headed the only group to submit a competing application when the Navy first offered the USS New Jersey to the public, has vacillated between arguing for the port of Bayonne, where it was re-commissioned for the Korean War, and Liberty State Park. Currently, foundation trustees favor the park despite repeated written objections from the Friends of Liberty State Park (FOLSP), whose president, Sam Pesin, calls the continued push “an unfortunate waste of everyone’s time.” Members of the FOLSP, the park’s only advocacy group, feel another major tourist attraction would clog traffic and parking spaces while detracting from passive recreation areas and skyline views of Manhattan.

A foundation trustee who declined to be named because he didn’t “want to get involved” explained the importance of the LSP site by claiming many downtown New York City businesspeople have shown enthusiasm for the idea of eating lunch or hosting meetings aboard the ship. He also claims that “all the major maritime corporations in the United States” have expressed interest in donating money and services, so long as the New Jersey is docked there.

“Maintaining a ship is a very costly affair unless you have a sugar daddy somewhere,” he said. “It’s very hard to pay those bills. You have to find a place to put these ships where there’s going to be money coming in.”

Money Problems

The economic troubles of the HPA have been well-documented, though Rowan says they’re exaggerated or misunderstood by the media and are no greater than those faced by other nonprofit cultural and historical institutions. He says reports of bankruptcy, insolvency, and missed debt-service payments are incorrect, though according to the DRPA’s inspector general, TD Bank informed the authority several months ago that HPA was in default on most of a $1 million loan dating to 2003.

Rowan refutes this, explaining that the HPA pays $48,000 interest annually and was hoping to begin paying down the principal but was unable to do so after unanticipated cuts to funding. He also estimates the ship’s net worth at $19 million, though the bank declined to accept that assurance as collateral.

Rowan does admit that visitors have dropped by 50 percent since the museum’s first full year of operation in 2002 but has held steady at 100,000 annually for the past four years. He also acknowledges the difficulty in raising enough grant money and donations to close the gap between the ship’s approximately $2.2 million annual revenue from ticket sales and events and its $3 million annual operating and capital budget. It doesn’t help that the HPA didn’t receive any direct public funding this year or last, since Gov. Chris Christie eliminated the state appropriation that accounted for $3.5 million in 2010 and $1.7 million in 2011. The line item was replaced last year by a $35,000 grant from the state’s Historic Preservation Office.

In addition to the cutbacks, the HPA spent an uneasy winter since the DRPA deliberated over whether to continue to guarantee the remaining $900,000 due on the TD Bank loan. Had the DRPA not voted to extend its guarantee (for another three years), the authority would have been required to pay back the entire amount immediately.

Meanwhile, the DRPA’s inspector general was conducting an investigation into the joint affairs of both groups, which involved possible conflicts of interest, mismanagement of funds, improper use of worktime, and inappropriate procuring of vendors by Matheussen, who chaired the HPA board at the time. The audit was provoked by a letter from von Zwehl.

Unsubstantiated Allegations

This past May, DRPA Inspector General Thomas Raftery issued a report that found most of von Zwehl’s allegations to be unsubstantiated. The report did note some accounting mistakes that forced the authority to write off state-originated loans and advances to the battleship that totaled $8.5 million. It also found that complaints over conflicts of interest by Camden County freeholder Jeffrey Nash, who sat on the boards of both the DRPA and the HPA, though truthful, were inadvertent. Raftery submitted recommendations for avoiding such oversights in the future, and Matheussen stepped down as chair of the HPA board, though he remains a member.

Around the same period that the DRPA was looking into whether it had engaged improperly with the HPA, von Zwehl also convinced the state attorney general’s office to open at least one case against the HPA. The first one — an inquiry into why the HPA hadn’t legally registered as a charity with the department’s consumer affairs division for two years — concluded with an “in compliance” letter from that office after Rowan, who took over as executive director in January, says he immediately saw to it that his organization retroactively registered.

Then in March, a Philadelphia news outlet reported on a second investigation by the attorney general that concerned questions about the solvency of the HPA and its fiduciary relationship with the DRPA — a matter that von Zwehl raised in a September letter to Christie. According to The Inquirer report, Richard Bagger, the governor’s chief of staff, wrote to von Zwehl, “Please be advised that since taking office, this administration has been closely monitoring the minutes of all authorities, including the DRPA, and their actions regarding the use of taxpayer dollars and revenue expenditures.”

Peter Aseltine, spokesperson for the attorney general, could neither confirm nor deny the investigation but acknowledged, “We did receive information from Mr. von Zwehl that was referred to the appropriate people here for review.”

While the report quotes von Zwehl, who did not respond to questions on this topic during a series of emails, as saying that he met for two hours with representatives from the attorney general’s office, Rowan said he knows nothing about this.

“A lot of this whole story is based on misinformation,” said Rod Sadler, the new chairman of HPA’s board and the chair of Camden’s planning board. “We have never been in bad standing with the Navy … DRPA does not pay anything into the ship, and he [von Zwehl] gave a quote to the media that the Battleship New Jersey is quietly rusting away in the dirty Delaware behind a dirt pile, when nothing could be further from the truth.”

Changing Times

Suffering from the impact of the recession and missing its appropriations from Trenton, the HPA is working frantically to find ways to adapt. It’s changing its business approach to model those pursued by successful museums rather than corporations. It’s also trying to lose any lingering military-like rigidity in part by encouraging employees and volunteers to become more customer-oriented. Rowan says he’s brainstorming with TD Bank to restructure the payment schedule, and it’s reduced its staff from a one-time high of 58 to six full-timers and 320, volunteers..

Although Rowan says the HPA has kept ticket prices relatively stable at less than $20 per adult, he and employees and trustees are implementing new ways to generate more cash. They’ve just received their first shipment of commemorative custom plaques for donors who contribute $100, and they’re selling the naming rights to their pier for $2 million. They’ve begun hosting weddings, parties and private events, with two annual beer festivals.

Whats more, an extensive public event and tour-group program includes one of the nation’s most highly lauded overnight encampments, and the battleship’s position on the Delaware makes it one of the most enviable perches in the region to enjoy ticketed Independence Day and New Year’s Eve festivities, which culminate in grand fireworks displays sponsored by the City of Philadelphia.

By the end of the year, trustees will unveil a new tour called Turret II, which invites visitors to simulate the loading and firing of the 16-inch guns. They intend to launch a dockside tiki bar. They already run a free shuttle between the ship and the Independence Seaport Museum across the river, and they’re in talks with the museum to collaborate on special events.

In January of last year, trustees received some welcome affirmation of their efforts when the Star Ledger reported that Capt. Chris Pietras, the Navy’s program manager for inactive ships, had “commended the Big J’s condition amid the ‘continuous struggle for all museum ships to keep up with needed maintenance.’” It also quoted him as saying, “The Navy is confident that the Battleship New Jersey will continue to be self-sustaining as a museum and memorial in Camden.”

Last week the ship garnered some buzz when it won the coveted Philadelphia magazine “Best Of” award in the historic attraction category. Meanwhile, the Battleship New Jersey has embarked on its next mission: to resurface all 418,000 square feet of the exterior deck with teak, an endeavor that can only be accomplished by raising another eight million dollars.