[Editor's Note: This article originally appeared in the January 2009 issue of Classic Motorsports.]
If one of your passions is collecting classic cars, chances are you love showing them to others, especially those who appreciate the beauty, power and historical significance of these machines. You’ve probably toyed with the idea of opening up your collection to the public as a museum. In just the last decade, we’ve seen new automotive museums open—and we’ve seen existing ones close.
When deciding whether to turn a personal collection into a museum, there are several factors to consider. “Everyone’s circumstances are different,” explains Jeff Lane of Lane Motor Museum. “It all depends on your resources, tax situation, family, time commitments and personal desires. You’ve got to decide if you want to keep your cars as toys or share them with the public.”
Certainly there are advantages to opening a museum. You’ll receive accolades from museum visitors who will appreciate your good taste. However, it’s likely that most of your income will be in the form of praise, as most museum owners admit they don’t turn a profit on the operation. Even so, owners can realize tax benefits and offset some of the costs of maintaining the fleet. Jeff Snook of Snook’s Dream Cars says his museum helps to cover some of his vintage racing expenses.
There are disadvantages, too. Setting up a museum requires an enormous investment of time and money, both for the facility and the required marketing efforts. Also, when cars are part of museum diorama or are grouped together on the floor, getting them out for a drive can be difficult.
Private or Nonprofit?
Central to the decision-making process is whether to keep your museum a private enterprise or turn it into a nonprofit organization. Alain Cerf, owner of Tampa Bay Automobile Museum, says that his decision was easy: “We don’t need to be a nonprofit, because we don’t make money.”
Meanwhile, Jeff Lane says that turning his collection into a nonprofit made sense for him. This way he doesn’t have to pay property taxes on the large museum building or deal with sales tax. “I couldn’t have developed the museum to this extent otherwise,” he explains.
But Lane cautions that if owners decide to go the nonprofit route, they must be comfortable with giving up their collections and never getting them back. Under 501(c)(3) nonprofit status, if a museum closes and its assets are sold, the proceeds must go to another charity; they cannot go back to the individual or heirs. “For some people, their car collection is a big part of their assets or financial holdings,” he adds.
On the upside, collectors get a huge deduction on their income taxes when they donate their own cars to the museum foundation. And they can still drive the cars whenever they want, so the enjoyment factor is not eliminated, Lane explains. Plus, nonprofit status means the museum can get donations, member support and volunteers a lot more easily than a private enterprise could.
According to Lane, the bottom line is determining what you want for your collection as well as your family or heirs after you’re gone; it’s essentially estate planning for the cars, as the rest of the family might not be interested in running a museum.
“I wanted the public to see these cars and I wanted the museum to continue on if something happened to me,” Lane explains, adding that a foundation ensures this outcome. He notes that the process is simply a matter of filing paperwork with an attorney.
Location, Location, Location
Once you’ve decided to open a museum, whether as a for-profit venture or a nonprofit enterprise, there are a number of challenges to face. The first priority is finding a building in a good location to attract visitors.
Lane says that he was thrilled to find a 132,000-square-foot former bakery to showcase his collection. Its high ceilings, natural light and hardwood floors lend a feel of historical authenticity. It’s also close to three major Nashville highways.
Snook says that he had his heart set on an old car dealership or gas station, especially since he also had so much automobilia to display. When commercial warehouses seemed like the only option, he decided to custom-build a museum in Bowling Green, Ohio, that would look like a historic service station.
Cerf also started from scratch with a purpose-built building. He chose an avant-garde design to suit the spirit of his technologically innovative car collection. The museum is located adjacent to his Florida packaging manufacturing plant.
However, a museum doesn’t have to be enormous or state-of-the-art to meet the owner’s goals. Bill Putman of the Toad Hall Classic Sports Car Collection initially stored his cars under covered parking behind his Simmons Homestead Inn, a bed and breakfast located in Hyannis Port, Massachusetts. He has since enclosed this parking area to create his museum, although it still features a gravel floor and no heat.
Other Concerns
Once you have the cars and space, it’s important to consider how you will arrange your displays. The style of the exhibits must be determined according to space and objectives. Some museums pack in the cars in order to organize them by country or decade of origin, while others prefer more room so the cars can be taken out of the museum for exercise. Cerf says he needs extra space for educational displays that explain the technological advances featured in his collection of cars.
At the new Simeone Foundation Museum in Philadelphia, Pennsylvania, the race cars are displayed in their historical contexts, with dioramas depicting legendary racing venues such as Watkins Glen, the Bonneville Salt Flats, Mille Miglia, Targa Florio and LeMans. Snook enlisted the design department at a local college to create period backdrops for his museum—a general store façade for the 1930s, a Bowling Green street scene for the ’40s, a diner for the ’50s, and the pits at Sebring for the ’60s.
The next step in setting up a museum might seem a bit obvious: fine-tune your collection. Snook sold off some duplicate models and realized that he needed to purchase a Model T to add some balance. Lane focused on acquiring cars that related to the others in the collection, like his 17 Tatra models.
Maintaining Traffic
How do you keep people coming through the museum doors? Generating awareness in the community, interest among area tourists, and repeat visits typically requires a multifaceted approach to advertising and marketing. This can be expensive, and the number of visitors generated by some methods might not be worth the investment.
“Marketing is a challenge,” Lane admits. He spends $35,000 a year on marketing, including television commercials, billboards and brochure distribution. He also puts out a monthly e-newsletter to visitors and members, and he links to car club sites all over the world. As a result, more than 22,000 people visited the museum last year. “Advertising is a long-term effort,” he says.
“I’ve tried all the advertising methods and haven’t found a solution,” Snook says. He admits that he underestimated the cost for marketing when he wrote his business plan.
His current mix of methods includes one billboard, some newspaper advertising, and local tourism guides. He says brochure racks maintained around the region by the Convention and Visitors Bureau produce the biggest bang for the buck. Snook also involves his classic cars in parades, shows and cruise nights for exposure.
A glossy, 28-page special supplement in Vintage Racecar magazine helped launch the new Simeone Foundation Museum. A full-time marketing director has major media coverage in the works for this unique racing collection.
Cerf says that in his experience, the admissions generated by advertising don’t compensate for the expense. He links to many Web sites and takes his unique cars to high-exposure concours events such as Meadow Brook, Pebble Beach, The Quail Motorsports Gathering and Amelia Island. Putman says he takes advantage of all the free marketing exposure opportunities. Toad Hall is listed on Web sites for Cape Cod tourism, the Chamber of Commerce and car clubs.
To keep visitors coming back again and again, Lane says they change their display floor regularly. They can only display less than half their car collection at a time, so they keep it fresh for returning visitors by rotating the cars. The Simeone Foundation Museum is planning special visiting exhibits.
Making Money?
Museums have a variety of ways to generate income, if not profits. Admission fees are part of the equation, but museums often offer gift shops, custom products, group tours and facility rentals for special events. Nonprofit museums earn additional revenue from memberships, fundraisers and donations.
Cerf says his museum’s admissions and gift shop sales cover staff fees, though the owners noted that training museum staff can be difficult. Meanwhile, his company’s sponsorship covers the cost of two mechanics, car restoration work and other expenses. The museum also sells an 80-page illustrated book on the noteworthy collection. Lane says only 20 percent of his operating budget is covered by museum admissions; memberships and private donations cover the remaining expenses.
Wondering how the finances of running an automotive museum add up? The 2007 operating budget for the Owls Head Transportation Museum shows where the money comes from and goes to. This museum is actually broken into three wings; the original one is dedicated to aircraft and ground vehicles, while the other two highlight the Wright Brothers and the museum’s home state of Maine. You can take 360-degree tours of the three wings online at ohtm.org.
Snook says his museum immediately started earning enough money to at least cover out-of-pocket expenses. Thanks to fully equipped service bays and a full-time mechanic, classic car repair is his museum’s largest income source. Hosting special events is the second-biggest money generator, as the facility has entertained corporate affairs, weddings, class reunions, car club events and retirement parties. A museum event planner coordinates rentals, catering, bar service, waiters and entertainment. Snook also offers classic car storage and a service for selling classic cars on eBay.
“I was well aware that a museum wasn’t a get-rich scheme,” Putman admits. But he notes that all the cars in his collection have appreciated in value far more than other investments would have. And he’s happy that admissions at least cover his electricity bill.
Don’t Wait
If you’re serious about opening a car museum, don’t wait until it’s too late to get started, Lane advises. Many collectors wait until they’re 70 before forming a plan for their collection, he says.
“You’re dreaming if you think a museum will be successful in three or four years,” he continues. “You need 10 to 20 years to establish a viable entity that will keep going after you’re gone.”
So far, Lane is taking his own advice. He started his foundation and museum endowment at age 40 and is optimistic that his museum will survive into the future.
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