Featured Article (June 2003)

The Virginia Horse Center Considers its Options in the Face of State Budget Cuts

Earlier this year, the Virginia legislature reduced the Virginia Horse Center's State appropriation for debt service by $412,000 for fiscal year 2003 - 2004, leaving Center officials to rework and revise their budget and business plan to adjust for the budget shortfall.

Historically, the Virginia Horse Center received Virginia state funding to service the debt that was incurred during the initial construction of the Center's facilities and more recently to fund the construction of the Center's East Complex, including two new barns and an indoor arena, as well as the purchase of the Oak Hill property, which allowed the additions of international three day event and combined driving courses.

"State appropriations have never been intended to cover anything except debt service," said the Virginia Horse Center's interim director John F. R. Scott. "Revenues for the Center's operations have been generated through show activities and the Virginia Horse Center Foundation has raised any shortfall."

"Now with the addition of the new East Complex, the Center is in a position, under normal circumstances, to operate in the black," Scott continued. "However, funds for the debt service are still needed to stay in line with the original public/private partnership created by the Commonwealth. Hopefully politics won't interfere with the continuation of the business model that has worked so well since the Center's inception."

Option I

"With the partial loss of State funding, the Virginia Horse Center now faces an uncertain future that could involve three different options," explained Scott. "The first option is that the Center would continue to operate as it always has, while attempting to drive more dollars to the bottom line to offset the reduction in state funds. We would maintain the integrity of the horse shows currently scheduled, but would also consider the addition of more diverse events, better utilizing the Anderson Coliseum when there are no horse show activities scheduled."

The Virginia Horse Center would also develop an expanded, more comprehensive approach to fundraising through the private foundation, though Scott acknowledged raising private funds to pay debt service is difficult.

Option II

The second option, explained Scott, is that the Virginia Horse Center operations would be turned over to the state of Virginia, "This would likely result in a completely new look to the operation," he said.

Option III

The third option being discussed is privatization, which would involve selling the property and operations to a private individual or group of individuals. "Currently Virginia's Attorney General is in the process of sorting out whether or not privatization is even an option, which is dependent upon his interpretation of the Virginia Horse Center's ownership," said Scott. "If the Center could be privatized, then the Attorney General would also determine how that process would unfold. It is very complicated and we will work through it, but these answers aren't going to be available very soon."

"If the Center is privatized, mandates would certainly be built into the deal to maintain the current schedule of horse shows and to limit the ways in which the property could be developed," he continued. "There are many pros and cons to the privatization issue, and much discussion still needs to take place."

Along with the fact that the Virginia Horse Center's funds have been cut, the state is also requiring the Center to present a business plan by November 1, 2003, stating how it will adjust to its new reality.

"A timely determination by the Attorney General concerning the questions already presented to his office is crucial to our being able to develop a viable business plan in the near future," said Scott. "Maintaining the integrity of our current horse show schedule and physical layout of the facility is our number one priority, and all of our options will focus around that."