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Earthpark Business Plan (Des Moines: March 2006): A Review

Nicholas Johnson

August 12, 2006

"The potential attendance patterns that were identified in evaluating the full 2001 project were based on a destination that was unprecedented in scale; and a destination that many people would feel was so large that they had to return just to feel they had fully experienced it. . . . However, as currently described, it will offer a reduced visitor experience from previous plan iterations. The potential visitor length of stay will be reduced. It will be less of a 'must see' destination, and its ability to market itself based on unprecedented scale [i.e., "the world's largest indoor rain forest"] will be diminished. Repeatability for visitors may be affected by a reduced project scale. . . . During the first several years [after] opening, it is likely that attendance will be higher than in a later stabilized attendance year." p. 50 (bracketed material added). -- Earthpark Business Plan (consultant's comment)
Links to Contents

Dispositive Fact: Not One Dime Raised in 10 Years

Related Reading

The Document's Omissions

Problems Inherent in Project Remain

Spreadsheets and "What If?" Games

Useful Check List -- With Omissions and Questionable Numbers

Unmet Financial Sources for Teachers, Researchers

The Need for Credentialed Professionals

Unmet Needs of Education Component

Consultant's Candid Caution

Conclusion: Without Money Business Plan's Irrelevant

For the years I have been following the saga of the Iowa rain forest (now "Earthpark") I have been frustrated by the absence of focus, details, construction and operating plans, detailed budgets and a "business plan."

There is now a document entitled Earthpark Business Plan (Des Moines: March 2006). So far as I know it is still not available from the Iowa Child Web site, nor otherwise generally available to the public and mass media.

Given the fact that 14 of the 16 cities the project claims to have been interested at one time have now backed out, presumably this document has been prepared for the remaining two: Riverside and Pella, Iowa.

Since I have had the opportunity to examine it, I thought a few words of comment, a "book review" of sorts, might be useful to the citizens and public officials of those two cities as well as others.

The document is of substantial size and weight. It consists of 116 pages of text, followed by two appendices, one of 120 pages, the other, thankfully, only 11. The appendices consist of documents prepared in prior years, comparable to this 2006 116-page one. (As my colleague, and then-Chair of the Federal Communications Commission, Rosel Hyde, used to say when holding a document of comparable size from the FCC's staff, "You could kill a man with that!")

There is one unalterable fact, regardless of what is in the business plan:

The most significant observation to be made -- indeed the dispositive fact -- is that the project has been unable to raise one dime of financing during the past 10 years of trying. Ted Townsend started it off with a $10 million pledge. (How much of that remains is unknown.) Iowa's Senator Chuck Grassley, Chair of the U.S. Senate Finance Committee, has offered a conditional $50 million grant. However, the condition is that the $50 million of federal taxpayers' money be matched with an additional $50 million from private sources -- at the moment nowhere in sight. And, even if met, the project would still need an additional $55 to $80 million more, which it is even less likely to attract.

The 8-million-gallon aquarium that opened in Atlanta in 2006 was funded in large measure with an upfront single gift of $200 million from the CEO of Home Depot. The recently completed $140 million Riverside casino went from plans to opening night in 13 months. By contrast, after a decade of trying the rain forest has yet to turn a shovel of dirt. And this notwithstanding the project's close ties to wealth and political power -- in Iowa (e.g., former Governor Robert Ray), Washington (e.g., Senator Grassley), the Fortune 500 (e.g., Ted Townsend and David Oman's contacts), and the Republican Party generally.

In a way, "that's all she wrote." That's all anyone should need to know. If the project doesn't have the money all the rest is just blue smoke, dreams and mirrors -- however beautiful the dreamy smoke may be. At this point in time it really doesn't matter what's in the promoters' "business plan."

However, there are dozens of additional comments that could be made about the report as well. I don't have the time to write all of them, and in all probability you wouldn't be interested in reading them if I did. So I've just selected a few highlights. But before we begin . . .
For those interested in doing a little bit more reading beyond this brief discussion (including those who may actually have had access to, and read, the document itself) you might find it useful to review, or read for the first time, Nicholas Johnson, "The Coralville Rain Forest: A Brief Overview of Remaining Issues," April 24, 2004, (It's available from my main Iowa rain forest Web site,, which is something of an encyclopedic reference collection of news stories, reports and commentary about the project.) You can then compare the problems, issues and unanswered questions from two years ago with those obviously still remaining today, discussed below.

You might also want to look at Nicholas Johnson, "Time to Learn From What Works," Iowa City Press-Citizen, January 20, 2006,, in which I set forth what seem to be the qualities of successful attractions. Among those characteristics are: (1) a project that is built from the ground up with the enthusiasm of a local community's residents, rather than being imposed from the outside; (2) a precisely clear sense of purpose, scope and focus from the beginning; (3) up-front financing that is relatively quickly in place; (4) substantial local support represented in significant financial and other contributions from local residents; (5) no debt; (6) realistic, conservative estimates of attendance and revenue (a knowledge that "build it and they will come" only works in a movie like "Field of Dreams"); and (7) a project that relates in some way to the environment in which it is located (such as the "Living History Farm" near Des Moines, or the National Mississippi River Museum on the banks of the river in Dubuque).

Note that the problem is not that the rain forest project fails to meet one or two of these qualities -- it fails to meet every single one of them!

(Another op ed column along these lines, comparing the rain forest project to a single successful attraction, is Nicholas Johnson, "Coralville Project Can't Match Up To Omaha Zoo," Des Moines Register, July 17, 2004, As with "Time to Learn From What Works," above, the column documents the specific qualities of the Henry Doorly Zoo -- which, not incidentally, includes among its nine major attractions an indoor rain forest once claimed to be "the world's largest." Once again, these qualities are simply absent from the rain forest project.)

Some of the problems with the document relate to omissions.
(a) In some cases the omissions are both deliberate and obvious: A structured outline of what the document was intended to cover is presented in the form of headings and sub-headings, but the text that was intended to be inserted under a given heading may not yet be there. For example, under III. Earthpark Landscape, A. Customers and Stakeholders, 1. Mission and Values, b) Research, we find "This section to be further developed pending site selection." p. 34. (Never mind pondering what site selection could possibly have to do with the project's research program; the point is that when it comes to research "there's no 'there' there.") Under IV. Financial Information, D. Revenues, 1. Earned Income, a) Market Analysis we find (1) Potential markets, (2) Probable markets, (3) Market niches, (4) Markets and attractiveness over time, and (5) Attendance estimates by market niche. What we do not find is any text under any of these headings. p. 62. And two entire major sections are totally devoid of content, VII. Master Planning, p. 115, and VIII. Strategic Planning, p. 116.

(b) In other cases the omissions are less obvious: A subject is raised, and presented in textual form, but important considerations and issues are simply not addressed, as with its teacher training component.

(c) Throughout the reader is reminded that important details of the project -- indeed, details that may impact on its success or failure -- will turn on facts not yet known, such as the site ultimately selected, its relation to other attractions, the future of the economy, and so forth. For example, "a detailed pre-opening budget has not been drafted because there are many variables which are dependent on site selection and building design decisions. More input in these areas is required before a budget with integrity can be presented." p. 12.

(d) The document is still full of generalities, such as, "Earthpark will be operated by professional management . . ." without providing even examples, let alone the names of the individual, or firm, chosen. p. 12. And I'm not sure how much day-to-day guidance can be provided by Earthpark's "core value" -- "We believe in the truth of nature." p. 33. I think even most orthodox Buddhists, not to mention business school graduates, would require something a little more precise than that.

(e) And there are occasional lapses. For example, while there is reference throughout to the use of debt to enable the construction of the project, and debt servicing as a challenge thereafter, there is no mention of either -- of regular payments of principal and interest -- under "Expenses" in Table  IV-1: "Income Statement for a Normalized Year," p. 48. (Debt is later discussed at pp. 107 et seq.)

Of the claimed 16 possible Iowa sites that are said to have made serious applications to host it (only half of which have ever been revealed) the only one mentioned by name in the document is Coralville. Since Coralville long since removed itself from consideration, one must assume the document was, in fact, prepared for Coralville, revised in some particulars, and the proof reader simply failed to delete this one reference to a city. Clearly, however, the document is not, and does not even purport to be, something prepared with the two remaining possible locations in mind -- Riverside and Pella.

Some of the problems with the document are inherent in the concept itself, not the document; the project promoters' idea of what they want to build is itself flawed. What I have described over the years as the project's "lack of focus" continues to dog the project to this day. The document refers to what it calls the "confluence of 1) science education, 2) economic development, 3) environmental conservation, and 4) entertainment" which are how "Earthpark is working to bolster Iowa as a leader in education . . .." p. 4. But it is this very "confluence" of tourist attraction, national research center, teacher training, corporate products display, overnight camping facility, entertainment 3-D theater, educational facility and exhibits that creates the confusion in the minds of project management as well as the public. The "synergy" of multiple attractions in a geographical area -- such as downtown Atlanta near the new aquarium, Las Vegas, southern California, or even Branson, Missouri -- can work. But intuitively, to bring education, entertainment, research and training under one roof does not hold much promise of either thematic or financial success. Necessarily, this fuzzy thinking and failure to focus runs throughout the document.

The document's greatest strength is also its greatest weakness. To understand what follows it's necessary to know a little bit about computerized spread sheets and "what if" games.

It's not that complicated. Suppose you're paid $17.50 an hour, and you're guaranteed eight hours work a day, five days a week, for 50 weeks a year. A spread sheet enables you to put those numbers in "cells" and have the computer program, the software, do the math for you. It multiplies each of the four numbers by each other and informs you that you'll be earning $35,000 a year. Now comes the "what if" part. Let's say you have a job offer that will pay you $18.00 an hour. But your $17.50 job is five miles from home, your $18.00 job offer is 35 miles from home, and you figure it costs you 30 cents a mile to drive your pickup to work. Again, the spread sheet lets you subtract from your earnings the cost of the drive: 35 miles x 2 (for a round trip) x 50 weeks x 5 days a week x 30 cents. Instead of having to do all this math, to find the answer to "what if I were to take this other job?" all you'd need to change is the wage per hour (from $17.50 to $18.00) and the mileage from 5 to 35, and by the time you looked back at the computer screen, there would be the answer. (If you keep your present job you'll end up with $34,250; if you accept the "raise" you'll only make $30,750.)

So that's a "what if" game. It's a tool that can be used with any project or business. A school district might ask "What if the folks moving into the new development have an average of 1.5 children who will be looking for classroom space?" "What if they are retired and elderly and have only an average of 0.5 children?"

The utility of the tool obviously turns on its realism. (1) You may forget a variable. For example, one job may enable you to continue to wear your old clothes to work and eat a lunch you bring from home; the other will require a whole new wardrobe, and its upkeep, and the expense of eating out with clients or colleagues at least three days a week. (2) The numbers you plug into the formula may be unrealistically high or low, possibly because of unwarranted optimism, and possibly because of unforeseen, and unforeseeable, changes. For example, you may have assumed total transportation costs of 25 cents a mile based on $2.00 a gallon gasoline, only to find you're now paying over $3.00 a gallon.

Another of the dangers of this tool comes from our natural inclination to confuse precision with accuracy. The spreadsheet can create whole pages of very precise numbers. When they become a document as thick as the Earthpark's "business plan" the mere size of the document suggests that it contains a lot of solid answers. It may not.

Consider digital clocks and watches. This morning, while writing this, the power went out and the digital clocks went dark. Once the power came back on they began to flash, their very precise -- and very wrong -- time. Meanwhile, my 100-year-old $2.95 Sears "grandmother clock" went right on ticking, displaying a much more accurate time. Spreadsheets and "what if" games are like that. They produce very precise results that can be disastrously wrong.

Even though the numbers are wrong, and the course of action they suggest would be a great mistake, the spreadsheet can still serve a useful purpose. If it is well and thoroughly done, if you have not omitted a single variable, it still constitutes a very valuable check list of all the factors you need to take into consideration.

Which brings me to my comment about the numbers in this document. The project's consultant has done a very useful, thorough and lengthy job of bringing together in one place a list of, if not all at least all that occur to me, of the variables that one would need to consider in evaluating a project of this kind. It is a little daunting and I won't even begin to list them here. But while the categories are useful as such, they are also a reminder of just how complicated a project of this kind is, a reminder of how much can go wrong, how much has not formerly been discussed, how much may not have yet been well thought through, how much a community -- such as Riverside or Pella -- needs to resolve to its satisfaction.

(a) The document itself recognizes the difficulty in predicting, for example attendance, when the project's location and other variables are unknown. Nonetheless, it does so. While I find the checklist as such very useful, the numbers that have been plugged into it I find less so. For example, when major educational attractions in Iowa are drawing 35,000 to 100,000 visitors a year I think it is wildly unrealistic to expect the rain forest to attract over one million. Especially is this so given its relative disadvantage in terms of return visits.

(b) When the project was targeted for Coralville the promoters made a great deal of its location near -- indeed its visibility from -- a major cross-country Interstate highway, I-80. So far as I noticed there is no mention in the "business plan" of the negative impact on attendance as a result of losing the opportunity to draw from those drive-by potential tourists.

(c) When the Riverside casino is estimating that 75% or more of its customers will come from an area within a one hour's drive of Riverside, when an Illinois study estimated that percentage for other attractions at over 90%, I believe it is unrealistic for the rain forest to assume it will regularly draw equivalent percentages from a 150-mile radius.

(d) Having been involved in fundraising myself for non-profits and political campaigns, I am familiar with the fundraising firms' technique: They arbitrarily set giving levels (e.g., $25,000, $5000, $500, $100), make a reasonable estimate of IF people could be found in those categories how they would be distributed among them (i.e., there will be more giving $100 than can be found who will give $10,000), you multiply the number of people in each category by the amount of money given by each of the people in that category, run the totals, and then tell the organization to go out and find those people and get that money from them. In other words, they've done the math correctly, it's just that the numbers themselves bear questionable relation to reality.

The only problem with this technique, so far as the rain forest project is concerned, no one has been found in any of these categories throughout the last ten years of the promoters' efforts to find them! (The document posits an organization with 26 board members -- a little unwieldy in my experience -- of which two are projected to donate $25,000 to the project, and 10 are projected to give $10,000 each -- every year! Table IV-16: "Annual Board of Directors Contributions," p. 72. All I can say to that is, "Good luck." It also contemplates a total of $1.5 million from corporations. Table IV-19: "Total Corporate Contributions," p. 74.)

Nor are the financial problems limited to attendance by tourists at an educational-entertainment venue. While the focus of the project is still not totally clear, to the extent it hopes to be a center for education, teacher training and serious scientific research it will need other revenue streams as well. Where is the funding to come from to pay the teachers -- both those doing, and those receiving, the training in science education? What will be the source of the continuous stream of grants to fund the research of the rain forest scientists?

Who's on first? One of the most important elements in any business plan, one of the first things a venture capitalist or bank loan officer will ask about, is the management. The rain forest has brought in a number of first rate architects and contractors, even educational leaders, over the years. In fact, the ability of architects to design, and contractors to build, the shell of the structure has never really been addressed, let alone the focus, of those who've expressed doubts or ridicule about the rain forest. The questions have related to what will be going on inside that structure. One of the disquieting facts regarding those associated with the project over the years is that they are no longer there. New appointees are announced with a flair of publicity at a news conference and then a year or so later are nowhere to be found. That's troublesome both because they're no longer there and also because -- like the communities that have worked with the project and then walked away from it -- one cannot help but wonder what is going on that causes people on the inside to become disaffected over time.

In the piece about the Omaha Zoo, referenced above [Nicholas Johnson, "Coralville Project Can't Match Up To Omaha Zoo," Des Moines Register, July 17, 2004,] one becomes aware of the obvious and central role played by its professional director, Lee Simmons, over the years -- including its financial success.

The emphasis put on "credentials" is often overdone. In the context of the University of Iowa's search for a new president during 2006 I have written that we might very well be able to find persons who would willingly take the position, and do an excellent job at it, and be perfectly well satisfied with a salary of $300,000 (or even less). (Nicholas Johnson, "Pricey Presidents Added Cost," The Daily Iowan, March 7, 2006.) The fact remains that everyone seems to be more comfortable hiring a president who has a track record as an educational administrator from a prestigeous university that demands twice that. Similarly, we might do very well with football coaches who are not courted by the NFL teams, and haven't yet coached in the biggest college conferences. But we're more comfortable going for "the best," measured by credentials -- and, at Iowa, willing to pay the highest salary in the Big 10 -- and clearly the highest salary paid any State employee, at $3 million a year.

Following Katrina, the credentials of Federal Emergency Management Agency Director, Mike Brown, came under scrutiny. (See, e.g., CNN, "FEMA director Brown resigns,", September 12, 2005, ("Federal Emergency Management Agency Director Mike Brown resigned Monday after coming under fire over his qualifications and for what critics call a bungled response to Hurricane Katrina's destruction").) Most independent observers were of the opinion that he hadn't done a very good job. But his prior association with the International Arabian Horses Association was often mentioned in this connection. Although humorous, it was in many ways a cheap, and irrelevant, shot. He might very well have made an excellent Director. I wouldn't be stunned to discover that there may very well be somebody, somewhere in one of our 50 state governments, with credentials and experience at "emergency management" who would have done no better, and maybe worse. But it was Mike Brown's lack of credentials and experience with Arabian horses that was seized upon and thought relevant.

I mention this because whatever one may say about David Oman's education, training and experience -- and he is clearly a skilled publicist -- from the superficial perspective of credentials he is no more prepared to run a rain forest -- whether one focused on K-12 education, entertainment, or serious research -- than Mike Brown was to run FEMA. I've set up this point as I have because I'm not suggesting that he would not do a good job of it. (Actually, there is no evidence of which I am aware that Oman would even want to, or envisions that he might, be associated with the project after it is constructed and operating.)

The point is simply that to achieve credibility among the professionals who manage -- and fund -- educational attractions such as zoos, botanical gardens -- not to mention a center for world class research scientists -- the rain forest needed to be perceived from the beginning as being in the hands of a professional credentialed, experienced and skilled in such specialties.

Nowhere is this more serious than in the education component of the project -- often said to be its centerpiece. The project once had on board an educational leader, Ted Stilwill, the former distinguished director of the Iowa Department of Education. The circumstances of his leaving soon after being hired have never been made clear. But so far as I know from published reports, he has never been replaced. And a not-unrelated serious failing of the project is that something so focused on its educational component has so little planning and detail in place. What, exactly, is going to be going on in the 15,000-square-foot [See Table IV-3: "Preliminary Building Spaces," p. 52] teacher training facility? How much of it needs to happen there rather than at the University of Iowa College of Education facilities? Why will the teachers choose to go into a rain forest to receive this training? Who will pay them, how much, from what sources? What institution will provide them the academic credit necessary to increase the pay they receive from their school district? At one time there was talk of a K-5 school inside the structure. Is that still a part of the plan? Indeed, in Table IV-1: "Income Statement for a Normalized Year," under "Expenses," and "Program and Operation," I can't find any reference whatsoever to an "educational" or "teacher training" program or operation. p. 48. (There is a line item for "education" in the portion of the document discussing personnel at pp. 79, et seq.)

Much the same can be said for the proposals regarding making the rain forest a center for scientific research. At a minimum this requires that a nationally, or internationally, known researcher of great reputation -- someone whom other scientists would come to Riverside, Iowa, to work with -- is on board and at work already, lining up colleagues and grant money. It's not apparent from the document that this is being done.

Candid caution from the consultant. Not only has the project's consultant provided a very useful, detailed check list of considerations, he has also provided us some very candid caution.

For example, in the earlier document he prepared, contained in Appendix A of the current "business plan," "Market Potential of the Iowa Environmental Project in Coralville, Iowa," March 2004, he assumes the project "will have the largest indoor rainforest exhibit in the country" with 363,800 square feet, and "aquarium exhibits of 1.3 million gallons." He continues,

"The assumptions and projections in this report only apply to this description. A facility of substantially different scale or visitor experience would likely have a different response from the market. Possible differences could include attendance, warranted ticket prices or visitor spending" (emphasis added).
Id. at Appendix A, p. 3.

Earlier, a consultant had warned the project's promoters -- who had already reduced the project's scope from $300 million to $225 million -- that any further reduction would seriously threaten its ability to market itself as "the world's largest," indeed its ability to be self-sustaining. Since then the promoters have, as is well known, reduced the scope first to $180 million and now $155 million.

The project is now planned to be a "facility of approximately 300,000 square feet," p. 7 (down from 363,800 in 2004). The aquarium -- which is nowhere mentioned in I. Executive Summary, C. The Vision, pp. 7-8, or Table IV-3: "Preliminary Building Spaces," p. 52 -- was reduced from the 1.3 million gallons planned in 2004, Appendix A, p. 3, to 400,000 gallons in May 2005, and now 575,000 gallons in March 2006. p. 39.

As the current consultant cautions,

"The potential attendance patterns that were identified in evaluating the full 2001 project were based on a destination that was unprecedented in scale; and a destination that many people would feel was so large that they had to return just to feel they had fully experienced it. . . . However, as currently described, it will offer a reduced visitor experience from previous plan iterations. The potential visitor length of stay will be reduced. It will be less of a 'must see' destination, and its ability to market itself based on unprecedented scale [i.e., "the world's largest indoor rain forest"] will be diminished. Repeatability for visitors may be affected by a reduced project scale. . . . During the first several years [after] opening, it is likely that attendance will be higher than in a later stabilized attendance year." p. 50 (bracketed material added).

Clearly, the existence of this "business plan," whatever its omissions and defects, is much better than nothing. The work the consultant has done in putting together a check list of the considerations involved in putting together a project of this kind is a very significant contribution. But that doesn't fill in the blanks the document still contains, nor is it an independent verification of the numbers it plugs into its "spreadsheet." And the very conception of the project, and much of the document's representation of its implementation, are seriously flawed.

I end as I began. In most ways the details of what purports to be a "business plan" are irrelevant, because . . .

The most significant observation to be made -- indeed the dispositive fact -- is that the project has been unable to raise one dime of financing during the past 10 years of trying. . . .

In a way, "that's all she wrote." That's all anyone should need to know. If the project doesn't have the money all the rest is just blue smoke, dreams and mirrors -- however beautiful the dreamy smoke may be. At this point in time it really doesn't matter what's in the promoters' "business plan."