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resume promptly and reach new high levels soon with the opening of new shops and the tripling of present Shops' floor area. Product Development revenues, on the other hand, are likely to shrink as Fieldcrest's need to restyle may reduce its emphasis on Smithsonian products.

[[underline]] Proposed Transfers to Plant and Endowment; Financing of West Court Construction [[/underline]]

Previous plans approved by the Regents for the financing of the NMHH West Court construction called for the transfer in FY 1976 of an additional $1,500,000 for this purpose; that amount together with the $500,000 previously transferred for this purpose would have thus provided a total of $2 million toward the $3 million total cost (exclusive of the $500,000 for kitchen equipment contributed directly by Marriott and also excluding the cost of the new Museum Shop in this area which is being capitalized and amortized off from Shop income over a 10-year period). The remaining $1 million was to be provided from a bank loan, the principal and interest payments for which were to be totally covered by guaranteed revenues from Marriott Corporation, the concessionaire and construction contractor, under a contract provision calling for them to pay us (a) 15% of gross restaurant revenues or (b) total principal and interest payments each year, whichever is the larger. Because of Smithsonian's improved earnings picture outlined herein, however, coupled with our very strong current balance sheet position, it is now proposed that we pay off immediately this additional $1 million from the surpluses projected for the current fiscal year and transition period [[underline]] without resorting to a bank loan.[[/underline]]