National Sports Museum to break ground in May.

Gaining city and state approval for $52 million in Liberty Bonds on August 19, the National Sports Museum is on track to begin construction in May 2005 for a planned July 2006 opening. Dubbed the "Smithsonian of Sports" because of the breadth of different sports it will feature--many incorporating state-of-the-art interactive exhibits--the museum will occupy roughly 90,000 s/f at 26 Broadway in lower Manhattan, in close proximity to the Statue of Liberty ferry, Wall Street and the planned World Trade Center Memorial.

Supported by Mayor Michael Bloomberg and Governor George Pataki, as well as congressman Charles Rangel, the $76 million project has been identified as a development that will help revitalize downtown, a quality that determined its eligibility for Liberty Bonds, which are triple tax exempt.

"Getting approval to issue these bonds was critical," said National Sports Museum founder and CEO Philip Schwalb. "Without them this project would not go forward."

Schwalb was also pleased with JP Morgan's decision to be the placement agent for the bonds, citing that the well know investment firm will lend visibility to the funding of the project and vouch for the stability of its returns.

Although the bonds aren't rated, both JP Morgan and Real Estate Solutions Group, in partnership with Ernst and Young, conducted market analyses and financial feasibility studies.

"We had to understand this concept fully, how it would be realized and if it would work financially," said Patty Adell, managing partner at Real Estate Solutions Group.

"We analyzed whether the calculated income for such a venue would support the Liberty Bond requirements and it did. There is a huge demand for a development like this in the city even by conservative estimates."

The 20-year Liberty Bonds, expected to produce 11% returns per year, will be available to institutional investors on November 15. Schwalb, a former fundraiser for major motion pictures such as "Rainman" and "A Fish Called Wanda," is currently raising the remaining $24 million, two thirds of which he says has already been committed.

"There's been a lot of investor interest in these bonds," Schwalb noted.

Although the interior of the museum has already been envisioned, architects Beyer Blinder Belle will spend the next months tailoring the design to the layout of 26 Broadway.

The building's status as a historic landmark prohibits any alteration to its facade and will make for an interesting fusion of old and new, something the architects--who produced the designs for the renovation of Grand Central Station and Ellis Island--are particularly qualified to work on.

While the exterior of the building will remain untouched, the museum's sophisticated exhibits, prevalence of electrical equipment and consequent massive cooling HVAC systems necessitate that the interior of the first two floors be completely gutted.

The construction is expected to be so extensive Schwalb tapped Jones Lang LaSalle to oversee the renovation.

"The character inside will be a very fresh design," said project manager John Krush of Jones Lang LaSalle. "The exterior and interior, although different, will compliment each other."

Central to the National Sports Museum's interior will be a "Hall of Halls," a space that will feature exhibits from various sports hall of fame venues around the country.

The museum has already forged partnerships with the NBA Hall of Fame-in Springfield, the Hockey Hall of Fame in Ontario, NASCAR in Daytona Beach, Fla. and the World Golf Hall of Fame-in St. Augustine, Fla., among others.

"It will boost awareness for those venues around the country," said Charles Shorter, a partner at Ernst & Young who was involved in the feasibility study.

"And they in turn will have displays of the National Sports Museum which will boost awareness for this venue."

The city and state created the $8 billion Liberty Bond Program after 9/11 in an effort to revitalize downtown Manhattan. But because commercial development lagged, the geographic bounds were consequently expanded and the bonds have been used for projects around the city, including The Bank of America Tower at One Bryant Park.

The National Sports Museum, along with actor and restaurateur Robert DeNiro, who will build a $38 million 83-room luxury hotel in Tribeca, are the first to harness the bonds for projects located in the downtown area.