Written by The Business Journal Staff
(AP) — The nonprofit foundation that runs San Diego Fleet Week is out of money, and its board has been negotiating with creditors to settle its debts, according to a report.
A San Diego Union-Tribune analysis published Saturday found the San Diego Fleet Week Foundation’s deepest deficits are tied to its cornerstone event, the Coronado Speed Festival, a series of auto races, car shows and related events.
The newspaper found the organization was $147,157 in the red at the end of 2015. It has yet to release audited figures for 2016, but Executive Director Larry Blumberg confirmed that revenue shortfalls have pushed the foundation to the brink of insolvency.
The group’s financial crisis has occurred in one of the world’s largest concentrations of military might, with more than $23.3 billion flowing through San Diego County last year for troops, veterans and defense projects.
Rather than declare bankruptcy, many insolvent nonprofits close down and alert charity regulators in their state that they plan to dissolve as a corporation — something San Diego Fleet Week has vowed to avoid.
“I started looking at the financials in the fall, knowing the sponsorship levels and where they were. I had an idea that there were going to be issues at the end of the year,” said Blumberg, a retired Navy captain who agreed to work for $1 per year when he took on the leadership post in November.
The foundation’s revenues, coming primarily from donations and ticket sales, peaked in 2007 at nearly $1.4 million — but Fleet Week still lost $43,506 by the end of that year.
Blumberg declined to specify the number of creditors still owed money or indicate the terms that Fleet Week’s board offered to liquidate the nonprofit’s debts. But, he told the newspaper, the “vast majority of our vendors have graciously agreed to the settlement.”
Lisa Richards, a non-voting member of the foundation’s advisory board and a Speed Fest food-service vendor, said she settled for a fraction of the money owed to her.
“I’m not happy about it, but I want Fleet Week to keep running,” she said. “The cause is important.”
Blumberg said he expected Fleet Week would be solvent by early 2017 and would stage a revamped series of events in mid-October, minus the Speed Fest.
Between 2001 and 2015, the foundation spent more than $12.3 million on the annual program of festivities designed to honor military personnel and their families. Expenses have exceeded revenues in more than half those years, according to its IRS filings.