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This document represents an abbreviated Business/Financial Plan related to the proposed

Adams Class Museum.

Revised: June 25, 2012

Artistic rendering of the proposed ADAMS Class Museum next to the Acosta Bridge

Jacksonville Historic Naval Ship Association, Inc. ADAMS Class Museum at the Jacksonville Landing

2 Independent Drive, Suite 144 Jacksonville, FL 32202

(904) 647-5177 www.adamsclassmuseum.org

“An exciting, interactive, educational, and historic Naval Ship Museum utilizing the USS CHARLES F. ADAMS (DDG-2)”

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1.0 Introduction The vision of the former USS CHARLES F. ADAMS (DDG-2) being put on display as a Naval ship museum, representing the ADAMS class of guided missile destroyers, began with the sailors who served in these fine ships throughout the Cold War. But now it has also become the vision of many former Navy personnel, residents and businesses of the Jacksonville, Florida area. That vision sees a financially sound, lasting, and fitting memorial and museum visitor attraction that will enhance downtown Jacksonville, support local youth programs, provide educational opportunities for youth, and honor all veterans, especially paying tribute to Navy veterans and the crews who served in this first of a kind, keel up built, guided missile destroyer. This will be the first and only naval warship museum in Florida.

1.1 History of Efforts to Preserve the ex-USS CHARLES F. ADAMS (DDG-2) In 2004 after a previous effort to save the ex-USS CHARLES F. ADAMS as a ship museum, former ADAMS class veterans from all 23 ships of the class, formed the Adams Class Veterans Association, Inc. (ACVA). ACVA’S efforts to find a home for this last remaining ship of the class of ships focused on the current plan to bring the ADAMS Home to Jacksonville, Florida where she was home ported in Mayport for 21 years.

Artistic rendering of proposed ADAMS Class Museum berthed next to the Acosta Bridge (ship will actually be bow out)

1.2 Organization Background The Adams Class Veterans Association (ACVA) is a national organization with Adams Class veteran members and Board members living throughout the continental United States and Australia. Once Jacksonville, FL was chosen as a viable ship museum site, the ACVA Board decided that a local Jacksonville presence was needed to accomplish the numerous local tasks, approvals, and support efforts. In January of 2008, ACVA members residing in the Jacksonville, FL area formed the Jacksonville Historic Naval Ship Association (JHNSA) with a charter to set up and, once established, operate the Adams Class Naval Ship Museum. Shortly after being formed in 2008, JHNSA applied for and was granted non-profit 501(c)(3) status by the Department of Treasury’s Internal Revenue Service and joined ACVA organization as an IRS approved non-profit organization working to save the ex-USS Charles F. Adams.

1.3 Mission Statement The Jacksonville Historic Naval Ship Association’s Mission Statement is . . . To excite, inspire, educate and entertain the general public; to create a venue dedicated to the mission, memory and Sailors of the Adams Class destroyers; and to distinguish and define the role of the Navy in securing and maintaining a free and safe world in which the United States stands as the vanguard for other countries to thrive.

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2.0 Business Opportunity

2.1 Project Description

The JHNSA Ship Museum project for Jacksonville, Florida began in earnest during 2008 with resources and people being recruited for the project. On October 12, 2010, the Jacksonville City Council voted UNANIMOUSLY to approve Ordinance 2010-675, which gave the City of Jacksonville's formal support for berthing the USS CHARLES F. ADAMS as a ship museum adjacent to the east side of the Acosta Bridge in downtown Jacksonville on the south bank of the St. Johns River. This is one of the key legislative steps in satisfying the US Navy requirement to demonstrate the availability of a permanent berth for ADAMS for at least 10 years. The site, on the City’s Riverwalk and in the heart of the tourist area where numerous hotels are located, will make the ADAMS Class Museum a popular tourist attraction. JHNSA is working closely with local businesses, community groups, and City Council members to develop the long-term detailed plan to make this a reality.

2.1.1 U.S. NAVY award of the ship to JHNSA At the present time, the former USS Charles F. Adams is moored at Philadelphia’s Inactive Ship Facility. In order to have the ship awarded to JHNSA to become a ship museum, ACVA and JHNSA will have to demonstrate to the U.S. Navy that the necessary cash and in-kind donations have been pledged and/or deposited in the bank. Subsequent to the official donation, the ship will undergo an open ocean tow from Philadelphia, PA to Jacksonville, Florida where it will be dry docked for hull and museum status restoration.

USS Charles F. Adams at the Philadelphia Inactive Ships Facility

2.1.2 Proposed Museum Mooring Site The mooring system will require construction of a new pier parallel and adjacent to the Acosta Bridge. A detailed mooring plan was designed and developed by a professional mooring system design company, and will be able to withstand a 100 year weather event.

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We are now working with the Florida Department of Environmental Programs, the USCG, and the Army Corps of Engineers to obtain the environmental and submerged lands easements necessary to begin construction of the mooring system. It is anticipated that all necessary permits will be granted and obtained, and the U.S. Navy donates the USS CHARLES F. ADAMS to JHNSA.

2.1.3 Ship Restoration

The USS CHARLES F. ADAMS will be put in dry dock for the hull and deckhouse to be refurbished. During that docking period the ship will have all of the necessary hull plating repaired and painted to maintain the ship watertight for a long period of time. Both sonar domes will be removed in dry dock and covered with blank flanges; and both of the ship’s screws will be removed with at least one kept for display at the museum site. The ship’s radar antennas will be restored and placed on the mast/platforms. Additional repairs will need to be completed to refurbish the ship’s interior museum spaces and to restore ship’s equipment. Volunteers who have already signed pledge letters to help with the refurbishment efforts will complete most of this refurbishment.

2.1.4 Museum Ship Development JHNSA, assisted by ACVA, has begun the process of identifying and locating key pieces of equipment that were taken from the ship during its long period in the Inactive Ship Facility. JHNSA and ACVA have been working with the Navy to locate key items currently missing from the ship, some of which may be in supply or ordnance warehouses or depots. During official “Open House” events, JHNA and ACVA have already been granted permission to visit other inactive ships that are not on donation hold to obtain some of the replacement equipment that these ships may have. With this help from the Navy, the ACVA and JHNSA have already acquired several hundred pieces of vital restoration equipment needed to make the ship look like it did when it was in service.

Artist Rendering of Proposed Berth Site and ADAMS - the ship will actually be breasted out on the port side with four large "dolphins" and access to the ship will be by two gangways from the pier.

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2.2 Rationale for the Proposed Museum Ship So what is the rationale for trying to establish an ADAMS Class Museum in Jacksonville, Florida?

1. Jacksonville has a long history of over 70 years with the Navy that continues to this day. 2. Whereas 35 states in the nation have retired US Navy warship museums, the State of Florida is

not one of them. In fact, no such attraction exists from Charleston SC all along the SE coast to Mobile AL, despite the excellent weather Florida offers compared to most other states.

3. An ACVA commissioned market study conducted by Keyser Marston, the same market research firm that evaluated the successful USS Midway Ship Museum in San Diego, CA, concluded that the proposed ADAMS Class Museum should be able to operate as a financially viable museum.

4. Governor Rick Scott and Lt. Governor Jennifer Carroll – both Navy Veterans – have expressed their public support. Governor Scott attended the JHNSA’s Bring the Adams Gala as guest of honor in October 2011 at the Omni Hotel in Downtown Jacksonville.

5. Many local organizations have already expressed written support for this project: Florida Secretary of State, Florida Director of Veterans Affairs, Superintendent of Duval County Public Schools, Jacksonville Scout Executive Boy Scouts, Jacksonville Naval Sea Cadets, Jacksonville University NROTC, Northeast Florida and Southeast Georgia NJROTC units, and numerous veterans groups from around the country.

6. Duval County Schools are very interested in having U.S. History classes on board with the USS Charles F. Adams history in key Cold War events such as the Cuban Missile Crisis. It will educate visitors on the Cold War, how it was won, the sacrifices that were made to win it, and the reason why winning the Cold War was so important.

7. It will be place for Naval Sea Cadets, Boy and Girl Scouts, High School NJROTC units, the Jacksonville University NROTC unit, and others to have events, ceremonies, training, camp aboard weekends, lectures, history classes, etc.

8. The ship museum will provide more excitement to downtown Jacksonville with interactive exhibits on the ship, ship tours, and exciting recreations of ship experiences (like a battle scenario in the Combat Information Center), which make the museum a really fun attraction in downtown Jacksonville.

9. It will be a fitting memorial honoring all military veterans, the ships of the Adams Class, Navy sailors, along with providing an appropriate place for ceremonies on July 4th, Veterans Day, and other special holiday events.

10. It will be an exciting place to have dinners and social events (July 4th, Memorial Day, Veterans Day, New Year Celebration) with a spectacular view of the City and riverfront

11. An economic stimulus for hotels, restaurants and all business in downtown Jacksonville by attracting many veterans for ship reunions from all over the United States and even Australia to bring more visitors and dollars to the area. In the last two years many of these reunions have already been held in anticipation of the establishment of the Adams Class Ship Museum.

12. The former USS CHARLES F. ADAMS is a truly unique vessel; it was the US Navy’s first ship designed and built from the “keel up” as a “guided missile ship” and served during the entire “Cold War”. She is the forerunner of today’s high technology, computerized missile Navy. ADAMS was “lead ship” of the ADAMS class of guided missile destroyers, and is the last surviving ship of that class in the country!

13. JHNSA has not asked for any kind of funding from the City of Jacksonville!

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2.3 Support for this Proposed Naval Ship Museum

COMMUNITY SUPPORT

The proposal to berth the ex-USS CHARLES F. ADAMS (DDG-2) as a Naval ship museum on the riverfront area of the St Johns River in downtown Jacksonville, Florida has gained local, regional, and state support.

LOCAL SUPPORT

The proposed ADAMS Class Museum has the support of the following groups and/or individuals: 1. The Jacksonville Florida Waterways Commission passed a Resolution on November 1, 2007 stating their support for the berthing in their city the last existing ADAMS class guided missile destroyer in the United States, USS CHARLES F. ADAMS, and the creation of a Memorial and Museum, dedicated to the ADAMS Class DDG's, the sailors who served on them, their contribution to our nation's security during the Cold War, and their part in US Naval History.

2. On October 12, 2010, the Jacksonville City Council voted UNANIMOUSLY to approve Ordinance 2010-675, which gives the City of Jacksonville's formal support for berthing the ADAMS Class Museum, utilizing the USS CHARLES F. ADAMS, adjacent to the Acosta Bridge in downtown Jacksonville on the south bank of the St Johns River. This is one of the key legislative steps in satisfying the US Navy requirement to demonstrate the availability of a permanent berth for the ADAMS Class Museum for at least 10 years. If viewing this online, click here to see a copy of the City Council Ordinance.

3. The North Florida Council of the Boy Scouts of America (BSA) strongly supports berthing the ADAMS in Jacksonville. They believe that establishing a ship museum in Jacksonville would provide many excellent program opportunities, especially as a camp aboard opportunity (currently local Scouts travel as far as Charleston for this type of experience, instead Scouting families would travel to Jacksonville). They also believe that the ADAMS could be used for meetings, training opportunities, and special events such as merit badge classes and court of honor ceremonies. Scouting remains strong in the Jacksonville area and we welcome additional programs. If viewing this online, click on this link to see the letter from Jack L. Sears, Jr., Scout Executive/CEO, North Florida Council of the Boy Scouts.

4. Local Junior Reserve Officer Training Corps (JROTC) high school units see significant potential for interaction between their cadets and the ADAMS Naval Ship Museum. Since there are 56 JROTC units with over 8,300 cadets in Area 12 (Duval, Clay, St. Johns and Nassau counties in Florida and all of Georgia), the ADAMS has the potential to have an enormous impact. The JROTC units have stated that they see other opportunities for the cadets to utilize an ADAMS Class Naval Ship Museum.

5. JROTC units in southeast Georgia have expressed enthusiastic support for berthing ADAMS, so that their cadets can have classroom materials brought to life. Although the JROTC have the assets of Naval Station Mayport available, the constraints of active duty intense operating schedules preclude daylong visits and the in-depth, hands-on exposure to the complexity of a naval warship. Southeast Georgia JROTC units believe that having the ADAMS available for educational opportunities as well as special

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events, ceremonies and over-night camp-aboard experiences would be a welcome addition to their programs. They believe that ADAMS would also offer an excellent opportunity for a partnership in community service between the NROTC Units and the Association operating the ADAMS.

6. Discussions between the ACVA and the Naval Reserve Officer Training Corps (NROTC) unit at Jacksonville University have shown that there is interest on the part of the NROTC in utilizing ADAMS for ceremonies, events, and hands-on training. For example, the NROTC would like to use the bridge area for cadet indoctrination regarding the way US Navy bridge personnel perform their functions on a Navy ship.

7. The Naval Sea Cadets of the Navy League of the United States would also greatly benefit from having a Naval Ship Museum such as ADAMS berthed in downtown Jacksonville.

REGIONAL SUPPORT

1. The former Florida Secretary of State, Secretary Kurt S. Browning, supported extended his support as stated in his letter dated February 22, 2008. His letter of support to ACVA explains the many reasons why he supports the ADAMS project and his offer of continued support is contained in his letter.

2. The former Executive Director of the Florida Department of Veterans‘ Affairs, the late Rear Admiral Leroy Collins, Jr., USNR (Ret.), was an avid supporter of the establishment of a Naval Ship Museum in Jacksonville using the ex-USS CHARLES F. ADAMS.

3. The incumbent Executive Director of the Florida Department of Veterans’ Affairs, Mike Prendergast, Colonel USA (Ret.) is also a strong supporter of the Adams Naval Ship Museum.

OTHER SUPPORT

Support from other groups includes: 1. Crews from most of the ships of the ADAMS class of guided missile destroyers have formed ship associations. These various ship associations have actively supported the ACVA/JHNSA effort to establish a Naval ship museum using the former USS CHARLES F. ADAMS. These ship associations have sent donations, some quite sizeable, to support the museum effort, and they have also encouraged their members to support the project. As a direct result of the plan to establish the Adams Class Museum in Jacksonville, various Naval Ship Association reunions have already been held in Jacksonville, with more being planned. This demonstrates how Jacksonville has already become a headquarters for such tourist business. 2. Strong support from senior retired Naval officers including the Jacksonville area. 3. Support from the Navy's former top admiral, the Chief of Naval Operations, Admiral Gary Roughead, who released the following statement: “The ADAMS Class Veterans Association and the Jacksonville Historic Naval Ship Association are truly undertaking a worthwhile cause. The CHARLES F. ADAMS Museum will represent all of the DDGs of this historic class of destroyers. The Museum will be a fitting and dynamic tribute to the many Navy veterans who served on these great ships.” G. Roughead, Admiral US Navy

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3.0 Capital Investment and Fundraising “This is defined as the total cost of donation application preparation, submission and revision, taking possession, towing of the vessel, and converting it into a ship museum. This is also known as pre-opening costs.”1 Estimated start-up costs have been classified into various major categories and are based on current cost estimates provided by River Consulting, LLC (now Halcrow Engineering), Environmental Services, Inc., Crowley Marine Services, ACVA/JHNSA, and market research firm 4P Group, Inc. Financial modeling assumed conservative revenue streams against inflated expense projections. This was done on purpose to increase the probability that study results accurately reflect future events. Total capital costs needed to establish the ADAMS Class Ship museum adjacent to the Acosta Bridge are estimated to be $9.151 Million as shown in the Budget Summary below. Budget Summary PHASE 1 - Capital Campaign $250,000 Environmental permits in Jacksonville 23,000 Environmental remediation 75,000 Tow ship to Jacksonville 170,000 Dry dock ship and moor ship (in kind value ~$400,000) In Kind

Donation PHASE 2 - Hull/deckhouse repairs, remove both SONAR Domes & propellers; preserve and repaint hull and superstructure; re-gun both 5" mounts; install antennas

600,000

Paint & hull preservative coatings 32,000 Mooring lines and fenders 11,000 Exterior angled ladders, fittings; hatches (in kind value ~ $75,000) In Kind

Donation PHASE 3 - Pier side refurbishment 1,517,000 Warship museum preparation & simulation devices 300,000 * Mooring System 30 % design to allow bids 73,000 PHASE 4* Mooring System -construction, engineering w/dredging 6,100,000 * If the City of Jacksonville agrees to display the ADAMS on the north bank, the pier and infrastructure already exist. We should know by 12/31/2012.

$ 9,151,000

The Jacksonville Historic Ship Association (JHNSA) has not requested any kind of funding from the City of Jacksonville. Through June 25, 2012, both organizations have raised and expended the following funds:

Income Total Cash Raised to Date $505,704 Cash on Hand (in bank accounts)

$207,161

Restoration Pledges (1) $28,998 Future Volunteer Services (2) $4,914,300 Pledged Cash Donations (3) $11,000 Total Expenses Paid to Date (4) $298,543 In-kind Expenditures (5) $2,800,152

1 NAVSEA, “General Requirements for Ship Donations”, 28 January, 2002

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Notes: (1) Restoration Pledges - Pledges to our various ship restoration programs, including the Hull Plate

and Yard - O - Concrete for the pier - donation programs. (2) Future Volunteer Services - This is the total value of hours committed by volunteers to restore

the ship once the ship is obtained. These figures were obtained by from the volunteer pledge forms submitted either via the websites or by regular mail.

(3) Pledged Cash Donations - This includes "cash" pledges. (4) Total Expenses - These are the total "cash" funds expended to date on the project. (5) In-Kind Expenditures - This is the value of "in-kind" donations of services and other items that

have been raised and expended to reach this point in the project. This also includes the value of hours donated by Board members and others in support of the project (i.e., submittal of the Ship Donation Application).

Capital fund raising has a long way to go which is why we need your support. Both ACVA and JHNSA have launched various fund raising initiatives to help secure the necessary funding. Since November 2009, JHNSA has operated the ADAMS Class Museum Visitor Center and retail store at The Jacksonville Landing to help raise awareness of the naval ship museum.

ADAMS Class Museum Visitor Center at the Jacksonville Landing

A number of fundraising avenues are being pursued concurrently. On a more direct approach, business leaders are volunteering to host intimate events – such as in intimate lunch for no more than ten attendees – to present our vision to attendees with the intent of getting substantial contributions and commitments. The Omni Hotel downtown developed the first major fundraising endeavor. The Hotel hosted a special “Chef’s Dinner” during which the Omni Chef entertained ten dinner guests with personal attention – describing each course and the wine paired with that selection. The dinner raised $3,000 in cash that night with another $27,000 pledged. The second meal event was a special business luncheon hosted by a prominent local businessman. A golf fundraiser netted $13,000. The Third Annual Gala to support the Adams was held on 15 October 2011 with Governor Rick Scott in attendance at the Omni Hotel. This event netted $17,000. The JHNSA worked with a local fund raising company to develop the best possible plan to raise the seed money to initiate the Capital Campaign necessary to bring the Adams Home. This eight-week Seed Money Campaign conducted April-June 2012 brought in some $150,000. A major capital fundraising campaign is being developed and is to be supported by a professional fundraising company with extensive experience in raising funds for non-profit organizations such as us.

4.0 Market Viability During the initial investigation phase of converting the former USS CHARLES F. ADAMS into a historical naval ship museum, market research was conducted to determine if the Jacksonville area has sufficient visitor traffic to support the operation of a ship museum. Both marketing studies that were conducted concluded that the area was large enough to financially support the project.

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4.1 Market Needs Market needs can be categorized into global, regional, country, industry, or consumer specific needs. However, in most cases, market needs identified with a particular plan are a combination of needs from all or some of the major categories. The following are some of the identified needs associated with this plan:

• Jacksonville and adjacent Mayport have been and continue to be a strategic location for the Navy. However, to date, there have been limited venues established that honor and remember our stalwart men and women in uniform.

• Whereas there are some 35 other former Navy warships as museums in over 25 states in the nation, the State of Florida is not one of them. In fact, no such attraction exists from Charleston SC all along the SE coast of the United States to Mobile AL despite the excellent weather Florida offers compared to most other states.

• There is indeed a need to preserve part of our naval history depicting when the fleet started deploying modern day missile defense systems and other high technology on surface warships.

• Jacksonville’s economy has a need to be revitalized via new attractions that will draw visitors and local residents to the area and thereby stimulating local businesses and institutions.

• The proposed ADAMS Class Ship Museum would certainly assist those needs.

4.2 Target Markets The following target markets have been identified:

1. International and domestic tourism industry 2. Local and Regional Educational Institutions (Duval County Public Schools) 3. Local and Regional Groups, Clubs, Associations (Boy Scouts, Girl Scouts, 4H Club, Naval Sea

Cadets, Naval ROTC, JROTC units at local high schools and Veterans Associations, etc.) 4. Local and Regional Hospitality Industry, including the Jacksonville Zoo and Gardens.

4.3 Museum Concept The ADAMS Class Ship Museum will be positioned to be the only regional ship museum using state-of-the-art technology in support of a “Real Life Simulated Onboard Experience”. All exhibits will be designed to demonstrate real life simulations, specific purposes, history, and provide education. Photos and system diagrams in easily visible and explanatory displays will enable the visitors to understand the purpose of ships equipment and operating spaces on the ship. The ship museum intends to offer the following to local, regional and international visitors:

Narrated Guided Tour: Docent tours would lead groups of visitors around the ship pointing out what the visitor is seeing as the tour progresses. Questions could be answered about different types of equipment, what was Sick Call and what was Mail Call, and the various exhibits available on the ship from the Ship’s Laundry to the Ship’s Barber to the Ship’s Store. Looking into 5”/54 gun mounts, the ASROC Magazine, Radio Central and the Combat Information Center, visitors questions would be answered by ADAMS Class Veterans who volunteer as docents.

Self Guided Tour: For those visitors who chose to see the ship on their own, a recorded self-guided tour on CD players will be available to take guests around the ship to principal locations with an explanation of the various locations on the tour, along with a description of what the sailor went through during a day on board. From the berthing compartment to the mess decks to the working spaces around the ship, the tour would give short explanations and take them back to the quarterdeck where they began. Training films and other video footage would be available on the mess decks where volunteers would show these videos as

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groups of visitors assembled. The films would show how the engineering plant was operated, the guns fired, and how submarines were tracked with ship’s sonar, and where meals were served.

CIC Simulation Guided Tour: Several videos of recreated scenes of typical incidents in the life of a guided missile destroyer crew will be shown and explained by volunteer docents. In the Combat Information Center, visitors will be shown these recreated events and also the equipment involved. Training films will be shown of weapons firings and anti-submarine warfare engagements to give the visitor a better understanding of the routine types of operations that Navy veterans experienced in their daily operations at sea in the Cold War and in the waters off Vietnam.

Overnight Stays: Overnight camp aboard programs, already widely used by students and other groups such as Boy Scouts, Sea Scouts, and Junior ROTC groups from high schools, will be developed to include real shipboard routine activities, typical of the sailor at sea. Recorded announcements typical of the events in the sailor’s day for change of the watch, meals, taps and reveille will simulate what sailors went through at sea. Movies on the mess deck, standing watches on the bridge and in CIC with volunteers walking the visitors through the duties of the watch standers, and showing training films, newsreels, and simulated action sequences to illustrate life on a combatant ship.

4.4 Competition Both market research studies evaluated the effects of competition on visitor numbers to the ADAMS Class Museum. The Jacksonville area museum, the Museum of Science and History (MOSH) with an annual attendance of 165,000 persons, is located adjacent to the proposed ADAMS Class Museum venue. Due to its close proximity, i.e. across the parking lot, the MOSH was judged to be a significant positive rather than negative factor in achieving ship museum visitor projections from the local market, since MOSH has a well known regional draw. The newly renovated “Friendship Fountain” with its nightly program of dancing water jets timed with wonderful music is also an attraction.

5.0 Ship Museum Operation Viability Two independent Marketing studies were conducted to determine if the proposed ADAMS Class Museum could attract sufficient visitors to be financially self-sustaining and generate sufficient revenues to build up a necessary reserve to fund future dry-docking needs. The study by 4P Group, Inc., concluded that the proposed museum could be self-sustaining if the $12.75 Million in capital star-up costs could be raised. The following highlights the Museum Ship’s projected operating financials:

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5.1 Ship Museum 5-year Pro-Forma Income Statement

JHNSA 2013 2014 2015 2016 2017 Revenue ( x 1,000)

Total sales $1,365 $3,073 $3,496 $3,717 $3,907 Cost of goods sold $52 $119 $140 $152 $162

Gross profit $1,312 $2,954 $3,356 $3,565 $3,745

Overheads Advertising/promotion $250 $250 $250 $250 $250

Painting $30 $30 $30 $30 $30 Event Platform Assembly $75 $125 $150 $160 $170 Dues and licenses $3 $3 $3 $3 $3

Curator Supplies $45 $45 $45 $50 $60 Insurance $5 $5 $5 $5 $5

Internet $2 $2 $2 $2 $2 Light/heat $45 $45 $45 $50 $50

Maintenance/repairs $35 $35 $35 $35 $35 Office expenses $6 $6 $6 $6 $6 Canteen Supplies $288 $288 $288 $290 $292

Gift Shop Supplies $90 $90 $90 $92 $95 Photo Supplies $80 $80 $80 $80 $80

Salaries and benefits $886 $1,139 $1,187 $1,252 $1,323 Payroll burden $124 $160 $166 $175 $185 Telephone/fax/mail $2 $2 $2 $2 $2

Travel $12 $12 $12 $12 $12 Vehicle costs $4 $4 $4 $4 $4

Endowment Fund $125 $125 $125 $125 $125

Total overheads $2,107 $2,446 $2,525 $2,623 $2,729

Net profit / loss -$795 $508 $831 $942 $1,015

Net business result -$795 $508 $831 $942 $1,015 Notes: The first year of museum operations shows a loss due to 3-6 months of pre-opening staffing requirements and associated payroll expenses.

5.2. Ship Museum Five-Year Profit & Loss Projections

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5.3 Ship Museum Five-Year Cash Flow Projections

6.0 Project Benefits 6.1 Local Economic Benefits The economic downturn over the past 18 months has negatively affected downtown Jacksonville causing numerous businesses to close and others to reduce production and staff. Establishing the proposed ADAMS Class Museum is expected to help stimulate economic growth for a number of reasons:

6.1.1 Jobs Created It is estimated that 26-28 incremental jobs will be created over the five-year study period of this plan consisting of:

• 1 Museum Director/Curator • 1 Operations manager • 23 Museum operations staff • 3 Museum maintenance personnel

6.1.2 Linkages The addition of a Naval ship museum onto the downtown Jacksonville riverfront area, such as the one being proposed by the ACVA and the JHNSA using the former USS CHARLES F. ADAMS (DDG-2), will produce significant benefits to the local tourism industry. Having an exciting, inspiring and compelling attraction such as the proposed ADAMS Class Naval Warship Museum would enhance the Riverwalk of downtown Jacksonville. The already existing Liberty Hound Statue on the south bank Riverwalk, the Veterans Arena and Memorial Wall would be complemented by the presence of the ADAMS Class Museum. In addition, there would linkages and “trickle down” financial benefits to other local businesses, also referred to as the multiplier, from the increased visitor traffic to the ADAMS Class Museum. The partnerships that have been formed with the local downtown hotels, which are supporting the ADAMS Class Naval Warship Museum proposal, will provide additional tourist traffic as well as event patronage, to the Museum. These “win-win” partnerships between the ADAMS Class Museum and local business leaders are a key aspect of the financial plan. The fact that ADAMS Class Museum will

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be bringing various Navy reunion groups to the downtown Jacksonville area will benefit the local hotels, and related businesses.

6.2 Cultural/Social Benefits Support of Local Youth Programs and Educational Support to the Local Community The JHNSA would work closely with local elementary, middle, and high schools to afford the young people of the Jacksonville/North East Florida/South East Georgia the opportunity to come aboard ADAMS, and explore the histories, the displays, the high technology systems, and the interactive exhibits. The JHNSA has already put into place the foundation for a partnership with the Duval County Public Schools (DCPS), enabling the school groups that are visiting downtown museums the ability to visit ADAMS Class Museum during the same “field trip” under the same program. The intent is to have a partnership between the JHNSA and DCPS that would provide educational opportunities including; classes on naval history, electricity, physics, etc. The intent of offering these classes would be to give young people insights into the technologies of today’s Navy, and enable them to earn school credit for successful completion of the various courses. The JHNSA would partner with the local and regional Junior Reserve Officer Training Corps (JROTC) Units that exist in a number of high schools. The JHNSA and the ADAMS Class Museum would be an ideal place for their projects, their ceremonies, and their camp-aboard events. The JHNSA would partner with the local and regional Naval Sea Cadet Programs, sponsored by the local Councils of the Navy League of the United States. The ADAMS Class Museum would be a perfect location for their Sea Cadet meetings, training, and their various events including graduations, ceremonies, camp-aboard programs, and shipboard training. The JHNSA would also partner with the various local North Florida Boy Scout and Sea Scout organizations, including the seven (7) Sea Scout Ships in the Jacksonville area: Sea Scout Ship TS Resilience (654), Yankeetown, FL, Sea Scout Ship (254), Jacksonville, FL, Sea Scout Ship (288), Ponte Vedra Beach, FL, Sea Scout Ship (398), Hastings, FL, Sea Scout Ship (631), Atlantic Beach, FL, Sea Scout Ship (660), Fernandina Beach, FL, and Sea Scout Ship (963), Live Oak, FL. These Scout groups would be encouraged to use the ADAMS Class Museum as a venue for their various events, and participate in special ADAMS Class Museum events. There is a Naval Reserve Officers Training Corps (NROTC) unit at Jacksonville University (second largest NROTC unit in the US), and another at Embry-Riddle Aeronautical University in Daytona Beach. The ADAMS Class Museum would provide a wonderful backdrop for the presentation of such subjects as Naval History, shipboard systems, and various high-technology weapons systems. Many areas of the ship will be available to the NROTC to view and receive instruction, including the Main Engineering Spaces, CIC, the Bridge, Signal Bridge, After Steering, berthing compartments, Wardroom, Mess Decks, Galley, Damage Control Central, and others. We would make the ship available for various ceremonies (officer commissioning ceremonies, Navy Birthday ceremonies, etc), and other NROTC events.

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7.0 Conclusions

7.1 General Conclusions • The proposed ADAMS Class Naval Warship Museum would the first and only one in the State

of Florida adding to other Florida based tourism attractions like Disney World, Epcot Center, Universal Studios Theme Park, Sea World and a host of others.

• The ship museum will be an economic stimulus at the intersection of Interstates 95 and 10 to downtown Jacksonville.

• The museum will become a venue for numerous classes, meetings and entertainment events. • Conservative financial models have demonstrated that the ship museum will be self-sustaining. • Local knowledge and project visibility has been limited up to this point.

7.2 Critical Success Factors Critical Success Factors represent the vital features without which a project stands little chance of success. The following lists, in priority order, the major Critical Success Factors associated with this project:

• $9.1 Million in funding, either in cash, loans, or contributions of "in-kind" work and/or materials.

• Final commitment on berth site with a Florida State submerged land lease, partnering with the City.

• Stronger advertising and media exposure. • A broader level of public support for the project. • Navy award of the former USS Charles F. Adams. • Volunteer ship refurbishment commitments. • Environmental permits.

8.0 The Way Ahead!

1. Implement a capital campaign for more local, regional and national funds. 2. Secure corporate sponsorships and grants. 3. Complete the necessary permits and Submerged Lands easement in partnership with the City to

the State. 4. The ADAMS Class Museum project must be advertised and communicated to the local residents

of Jacksonville, Northeast Florida, and Southeast Georgia. 5. Obtain stronger local enthusiasm and support for the project. 6. Most of all, your personal participation and support will make a difference!