Ark Park as Xanadu?

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A Slate article the other day compared the Ark Park to Coleridge’s Xanadu: “an extravagant vanity project born out of boundless narcissism and ambition.” An apt comparison, except of course that in the poem Kubla Khan actually builds his stately pleasure-dome – and he does not float junk bonds to do so.

Answers in Genesis, by contrast, is floating unrated municipal bonds to finance its proposed monstrosity – bonds that BusinessWeek describes as uncommonly risky. Indeed, they quote an overseer of municipal bonds as saying he would not consider purchasing such bonds and in fact likens their purchase to charity: if you lose your money, at least you may get a tax deduction.

According to BusinessWeek,

The documents cite at least 39 risks to investors, ranging from the potential for the animals to catch infectious diseases to the unclear constitutionality of tax incentives for a biblically themed attraction. There’s also no assurance that projected results, which are based on data gathered as early as 2008, will materialize, bond statements say.

Nor is Answers in Genesis backing the debt. Bondholders’ sole revenue stream comes from money spent at Ark Encounter. The park “may never achieve positive cash flow,” which documents say would lead to default.

AIG’s response? According to a “Message from Ken Ham about Ark Project and Media Attention,” which we received from an unnamed source, they blame it on “secularists” and an imaginary being known as Satan. Here are some choice quotations:

I remember the time when one of my friends said to me years ago, “When you stand on the Devil’s toes, he reacts. You guys must be kicking him in the shins!”

When we stepped out in faith to build the Creation Museum years ago and the atheists began rallying intense opposition against us, they also made all sorts of false accusations about AiG (and me personally). I was even accused by one lady of being “like [suicide cult leader (Ham’s emendation)] Jim Jones, coming to get our kids.” Secularists were labeling us as a “cult” and doing all they could, using ad hominem attacks, to try to discourage people from supporting the museum. …

That’s why … right in front of the secular media and other guests, I stated that God used the atheists to enable the Creation Museum to be a far bigger outreach than we had ever imagined.

The attacks we are now seeing on the Ark’s bond offering once again just confirm for me that the Enemy [sic] does not want this project to go ahead.

Mr. Ham concludes the message by comparing himself to the apostle Paul: “I am reminded of the struggles the Apostle Paul went through as he spread the gospel message …” and advises his followers, in the words of Paul, “Amidst the opposition, I trust we will all ‘watch, stand fast in the faith, be brave, be strong.’”

Coleridge does not tell us of the fate of Xanadu, but Shelley has an interesting comment on the ultimate fate of vanity projects:

… Round the decay

Of that colossal wreck, boundless and bare,

The lone and level sands stretch far away.

16 Comments

Ken the Ham

In Grant County did Ken the Ham A stately pleasure-Ark decree: Where 75, the sacred interstate, ran Through Outer Bluegrass measureless to man Down to a sunless fossil sea. So twice 400 acres of fertile ground With barbed wire fences girdled round: And here were hay fields bright with dairy cattle, With many an Indiana Bat-nesting tree; And here were politicians ancient as the hills, Enfolding sunny spots of greenery ($$$$).

The Ark Park. It will have a parked Ark, petting zoo and a Seven Plagues of Egypt (consisting of cars on a track that go through seven rooms illustrating the plagues.) That’s it. Who would go there even once much less make use of a “lifetime” pass?

Like they say, “follow the money.” Follow the money right into Hambo’s pocket. The only people who will get paid out of this will be Hambo, the officers of the various shell companies erected to protect AIG from litigation.

Compare the $62 million Ark Park with a new $200 million dollar theme “district” breaking ground near Houston: 90 acre baseball/softball complex, 40 acre water park with wake boarding, amusement park with rides, hotels and shopping mall, and an RV park. They hope to attract a million visitors a year and provide about 1200 jobs.

Yeah, and Hambo claims he’ll attract a million visitors with a petting zoo and a plague ride.

For sure, somebody is getting taken for a ride!

The attacks we are now seeing on the Ark’s bond offering once again just confirm for me that the Enemy [sic] does not want this project to go ahead.

Yes. And apparently, “the Enemy”, in this case means “fiscal common sense”.

Shockingly, it seems that “qualified investors”, ie. individuals who have managed to amass more than $1M in assets, might actually have second thoughts about investing in a project that quotes 39 significant risk factors in its prospectus, and is such a good investment the parent company feels the need to specifically note that they don’t stand behind the bonds.

Go figgure. Must be Satan at work.

Enough faith to shift the risk to any investors stupid enough to back Ken.

I see a lot asked from humans, nothing tangible being expected from God.

What a materialist Ken is!

Glen Davidson

That Business Week article also has this interesting tidbit about the Creation Museum:

Attendance has declined every year since the museum opened in 2007, offering documents show.

Just out of curiosity, I wonder what the recidivism rate is for the Creation ‘museum.’ That is, how many return visitors does it have?

My guess would be that very few bother to return, or come back bringing friends or grandkids. After all, even if you’re a believer, once you’ve seen it what more is there to learn on a return trip? How many lifetime memberships result in more than one or two visits?

Glen said:

Enough faith to shift the risk to any investors stupid enough to back Ken.

For those who might not have picked it up, I’d point out that the offering documents specify “accredited investors” and “qualified investors”.

Those are financial terms meaning “investors worth more than $1 million in assets or more than $200,000 in annual income”.

Now, it’s understandable that AIG would seek out deep pockets, but one might ask why AIG would want to limit investors to this relatively small pool? After all, wouldn’t $10000 investments from church groups and $ 1000 bonds sold to individuals be just as.… well… made of money?

Well, it turns out that “accredited investors” have a special place in the hearts of junk bond brokers because that’s the level at which investors are no longer under certain individual fraud protections of the SEC umbrella.

Below that level of wealth, you get special protections against overly optimistic sales pitches, and you have legal resources if you were sold crappy goods.

If you sign up as an “accredited investor”, (you’ll have to sign a document to this effect) the SEC assumes you should have enough financial acumen to weigh the pros and cons and when you loose all your money, that’s your problem, don’t complain to us.

By coincidence, I got an e-mail a few minutes ago from the Daily Kos, which reported Thursday that the San Diego Museum Council had denied admission to a creationist museum. The creationists predictably sulked and compared their position to that of a museum of black Americans in Selma, Alabama, in the ‘50’s. To my mind, it is more like the position of a flat-earth museum in San Diego in the teens. And, no, I am not prejudiced against God; I merely find the concept irrelevant.

stevaroni said:

Well, it turns out that “accredited investors” have a special place in the hearts of junk bond brokers because that’s the level at which investors are no longer under certain individual fraud protections of the SEC umbrella.

I think the rules against fraud still apply (which is why the documents disclose all those “risk factors”). The big advantage to selling securities in a private placement is that it avoids the elaborate requirements of registration with the Securities and Exchange Commission.

SensuousCurmudgeon said:

stevaroni said:

Well, it turns out that “accredited investors” have a special place in the hearts of junk bond brokers because that’s the level at which investors are no longer under certain individual fraud protections of the SEC umbrella.

I think the rules against fraud still apply (which is why the documents disclose all those “risk factors”). The big advantage to selling securities in a private placement is that it avoids the elaborate requirements of registration with the Securities and Exchange Commission.

That is what “accredited investor” means. However, in my understanding, it’s pretty damn unusual for a municipal bond to be offered in this way. Mainstream municipal bonds are usually sold through regular stock brokerages, usually with a minimum investment of $5000. Incidentally, “junk” bonds are just corporate bonds which are rated with a relatively a high risk of default, and carry a high rate of interest (or more accurately, high coupon relative to the price they sell for). A bond originally issued as a highly rated, highly secure bond could become a junk bond quite if unexpected financial difficulties struck the company that issued it. For the most part, anyone can buy a typical “junk” bond.

Accredited investors usually buy SHARES in risky start up businesses. Private placements are usually equity opportunities. This makes sense because start up businesses are very likely to fail but can multiply early investment many, many times if they succeed.

This is different from business loans. Someone who wants to start a less risky business, say an individual franchise of a successful chain, as a hands-on proprietor, might be able to get a loan at the bank and avoid giving up any ownership.

To oversimplify, but in a potentially useful way, a business with high risk but high potential for great future payoff, like a biotech company with a patent on an untested but potentially important drug, is best financed by offering shares to risk-tolerant equity investors (since the interest rate a rational lender would have to charge would be very high). A business with lower risk but lower payoff potential, like an individual coffee shop, is best financed by loans. The risk is low enough that a lender who routinely lends to such businesses can charge a manageable interest rate and still profit. The entrepreneur can retain full control, rather than selling shares to outside investors.

Large scale mainstream relatively low risk businesses can and often do look to the taxpayer to subsidize their borrowing costs, for better or for worse. The secular amusement thing in the Houston area, described above, is a good example. It sounds like the type of project that has a relatively low risk of outright bankruptcy. They could probably build it with private money, but why should they, when the public’s representatives are, for one reason or another, willing to provide some taxpayer-funded subsidies? I think it’s highly unlikely that that taxpayer benefits as much from subsidizing amusement parks, as they would from direct spending of taxes on infrastructure, public education, public parks, and so on, but politicians of both parties seem to disagree with me.

What Ken Ham is effectively doing here is asking people to loan him money at a low interest rate, for a highly risky start up venture. In the unlikely event that he pays back the money, investor gains are limited to the coupon rate of the bonds. The worst of both worlds; high risk and low potential return.

I find it very distasteful. If he simply built his ark thing with private donations, that would not particularly bother me (of course I wish people wouldn’t make foolhardy donations to authoritarian charlatans, but it is their right), but all of these shenanigans to get government favoritism and imply that the donations are an investment are unpleasant. The clear implication is that if he simply asked for donations to build the thing and run it as he wishes to (including paying himself and some chosen others large salaries, of course), he couldn’t fund it.

Alternately, equally distastefully, and not completely exclusively, it could all be a mutually voluntary charade. It could be that potential donors know that they’re giving money to Ham, but that they want the charade of mutual bonds to imply their taste for theocracy and dislike of the First Amendment. Creationists, and authoritarians in general, are big on dog whistles. Maybe his supporters pick up that this is way of not just funding the thing, but funding it in a way that thumbs a nose at the US constitution and the rights of other people, and like it better that way.

I’m fairly sure that Satan is imaginary, but if he isn’t, far from disapproving of all this, I’m sure he’d find this all quite amusing.

I regularly visit AIG, for a short time at least, just to see what the ‘great deceiver’ is up to this time. Likewise, regular trips to UD are necessary (especially their archives circa Dec 2005- March 2006), so the madness can be monitered.I get a general subliminal message that Ham is genuinely worried about the prospects of his latest venture. There are referances to ‘satan’ the ‘secular world’ and ‘press’. These guys have made being a victim into art. This is a multi-million dollar effort, and I strongly believe that the braggadocio may finally be wearing off and Ham and his minions will finally have to just accept that,history and science, though universally interesting, are best left to the historians, and scientists.

I am hopeful however, I strongly believe that his efforts, along with the loony efforts of some in Texas to alter secondary school texts ultimately backfire; eventually, and perceptably reality oozes in.

My favourite loon is Denyse O’Leary, known as ‘News’ at UD. From 2005 to today I have detected in her speils a definate drift toward the unhinged. I believe all of her efforts, and those of all these detractors from reason do this because psychologically they are acting like nine year old boys, who have been told to be quiet because they are intefering with a grown up discussion, they pout, stomp their feet, and hold their breath until noticed; perhaps less notice?

News for Ark Park converts to a 501c3 The Sketchy Finances of the Noah’s Ark Theme Park Slate Magazine ‎- 5 days ago

Building a full-scale wooden replica of Noah’s Ark forces one to … The next stage of his quest to convert America to young-Earth creationism is Ark Encounter, .… “A private bond offering through a 501(c)(3) that will allow us to …

The Ark Park recently converted to a 501c3 which is a nonprofit organization.

The industrial development municipal bonds were originally supposed to be issued through the city of Williamstown, KY.

I’m not sure if that is still the case. That they are a nonprofit emphasises that they are a religious cult group. And having a city issuing bonds for them stretches the separation of church and state a lot.

Even though the bonds would have been issued by Williamstown, it’s just window dressing. The city neither guarantees the bonds nor has any obligation to make sure they are paid off. My cat could do that much.

raven said:

News for Ark Park converts to a 501c3 The Sketchy Finances of the Noah’s Ark Theme Park Slate Magazine ‎- 5 days ago

Building a full-scale wooden replica of Noah’s Ark forces one to … The next stage of his quest to convert America to young-Earth creationism is Ark Encounter, .… “A private bond offering through a 501(c)(3) that will allow us to …

The Ark Park recently converted to a 501c3 which is a nonprofit organization.

The industrial development municipal bonds were originally supposed to be issued through the city of Williamstown, KY.

I’m not sure if that is still the case. That they are a nonprofit emphasises that they are a religious cult group. And having a city issuing bonds for them stretches the separation of church and state a lot.

Even though the bonds would have been issued by Williamstown, it’s just window dressing. The city neither guarantees the bonds nor has any obligation to make sure they are paid off. My cat could do that much.

I’m mainly a pathologist but I was a semi-successful start up entrepreneur for several years and have some knowledge of and interest in the way projects are financed. (I’ll bother to make an obligatory comment that understanding and describing something is not the same as advocating for it.)

I’m not a huge proponent of the current US venture capital system. It was once pretty effective at funding innovative ideas, but in my view, has become suboptimal in a variety of ways that are not relevant here. Likewise, in ways that are not relevant here, the US system of providing business loans to entrepreneurs is less optimal than it once was.

What is relevant is that Ken Ham’s convoluted financing schemes are bizarre and seem inappropriate, by any standards.

Essentially, he’s trying fund a religious venue. When it suits him, he portrays it as a for-profit venture, and then seeks taxpayer support. At other times, he portrays it as a non-profit religious venture, but seeks inappropriate symbolic endorsement from a secular government.

At all times, instead of seeking appropriate financing for either an amusement park (best financed by loans and/or equity investments by private individuals or entities that understand the risks), or a religious venue (should be financed by informed donations from supporters, openly understood and expressed to be donations to a religious cause), he constantly seeks to use highly atypical financing mechanisms, in an apparent attempt to disguise the actual nature of the project.

In contemplating how to finance his new venture, he prayed on “What Would Jesus Do?”.

This, apparently, is how Jesus would finance a religious amusement park. Sneaky, of questionable legality, deceptive, risky. But always personally profitable to the Ham family. Praise Jesus!

So, it looks like Ham wants to bring home the Bacon?

Henry J said:

So, it looks like Ham wants to bring home the Bacon?

Jesus wants you to tithe a tenth of your bacon to Ham, Inc.

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This page contains a single entry by Matt Young published on November 16, 2013 12:21 PM.

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