Representatives of the site, which last year was nearly $9 million in debt and on the brink of foreclosure, announced yesterday that the nonprofit has reached agreement with its creditors on an overall restructuring of its debt.
The agreement will "significantly" reduce The Mount's debt service, and more importantly, provide what officials there say is a "reasonable and realistic" timetable to retire the principal balance within a five-year term.
"This restructuring represents a remarkable achievement in extraordinarily difficult times," said Gordon Travers, the chairman of the Mount's board of directors. "We are grateful to everyone who, despite the current economic environment, recognized the importance of keeping The Mount in the public domain."
The Mount fell into financial difficulties last year, when the nonprofit Edith Wharton Restoration Inc. ran out of money. Berkshire Bank sent a notice of intent to foreclose after The Mount had fallen behind on its payments of more than $4 million in bank loans. Payments to other creditors had lapsed or had never commenced in the first place.
In response, The Mount laid off about half its staff, named Susan Wissler as executive director and immediately initiated the 'Save The Mount Fund Drive.' There are now seven full-time
In recognition of The Mount's more aggressive business plan, Berkshire Bank twice extended the foreclosure deadline to enable The Mount to take advantage of last summer's tourist season. By September 2008, officials at the famed non-profit felt comfortable saying that they believed they could pull The Mount out of its financial doldrums.
As a result of the restructuring announced Wednesday, the Mount's funded debt will be reduced from about $8.4 million to $4.7 million. The financial terms of the transaction were not disclosed due to confidentiality obligations among the parties involved.
The key to the restructuring, said Wissler, was a $750,000 grant from the Alice M. Kaplan Memorial Reserve, an entity conceived and administered by Kaplan's children to honor their mother.
In addition, the Save The Mount Campaign, launched last year, has raised a total of $1.4 million, said Wissler. Those two financial underpinnings paved the way for the plan to retire The Mount's debt.
"We are particularly appreciative of our creditors," Travers said. "(They) have demonstrated considerable patience and understanding throughout this period."
He added a note of caution, however.
"The Mount must continue to raise meaningful funds in order to continue operating in the black, as it did last year, and fund a critical expansion of mission."
The recent fundraising and restructuring success, Travers said, will hopefully demonstrate to potential donors that The Mount's leadership "provides responsible financial stewardship and is worthy of their confidence."
One of the key strategies for creating a more robust revenue stream, Wissler said, is to expand the programming offered by The Mount. This includes offering year-round programming, including writing seminars and workshops for adults and teenagers, panel discussions involving leading writers and public figures and an annual summer writers' festival.
The Mount has already opened for the summer, said Wissler. Some Enchanted Evenings, The Mount's outdoor evening cafe featuring drinks, hors d'oevres and live jazz, will open for business on June 26.
Wissler said Wednesday that she believed The Mount could raise enough money to pay off the debt and continue to cover its annual operating costs.
"But its still going to be dependent on the generosity of our supporters," she said. "We cannot let up on fundraising. We're grateful to all our donors, large and small, who responded to our campaign."