PORTLAND — The Ocean Classroom Foundation, a nonprofit based in Damariscotta that has run educational programs for students aboard schooners for almost 20 years, will stop operating at the end of this summer, according to Executive Director Greg Belanger.
The reason, according to Belanger, is that two of the three ships that the foundation owns are in such serious need of repair that they cannot host students and the third requires more expensive repairs than anticipated this year.
Without the revenue that the two out-of-commission ships would bring in, the organization will not be able to run programs beyond this summer, he said.
“The only viable solution was to work in this direction and eventually to close,” Belanger said. “We’ve been working for several months cooperatively with the bank to come up with a viable solution. It just proved unsustainable to fix these boats and pay the mortgage.”
Ocean Classroom Foundation took out a $2.2 million mortgage from Camden National Bank in 2010, Belanger said. The foundation made regular payments until three to five months ago. Belanger did not say how much was still owed to the bank.
Tax records show the organization reported to the IRS that its revenue was $1.5 million in 2012, while its expenses were $1.7 million.
One of the ships, a 125-foot steel schooner called the Westward, was purchased by Ocean Classroom in 2003 and has not been used for student programs in at least two years. After the ship was purchased, it was determined that the entire bottom needed to be replaced, among other repairs, which will cost between $750,000 and $1 million, Belanger said.
“So you have a vessel that you paid a lot of money for, that you put a money into, that didn’t quite get finished and it’s not producing revenue,” he explained.
This year, another Ocean Classroom ship called the Spirit of Massachusetts needed maintenance that Belanger said boats of its size and age typically undergo every 10 years. He said that work will cost between $700,000 and $750,000.
“You have three boats and two are not operating, in a nonprofit,” Belanger said. “One of them is the result of being surprised by the extent of the bottom repairs. The other one is that every 10 years it needs repairs. They came together.”
Both the Westward and the Spirit of Massachusetts are at Portland Yacht Services.
The third boat, a schooner called the Harvey Gamage, is currently in Gloucester, Massachusetts, undergoing minor repairs. For that ship to continue to operate past August and carry passengers on months-long excursions in the open ocean, which was the plan, it would need an additional $120,000 in repairs.
The Harvey Gamage will return to Maine in August and run three programs, serving about 110 students total, which Belanger said has been approved by the U.S. Coast Guard.
After that, Belanger said, he is not sure what will happen.
“There is no formal agreement between the bank and the Ocean Classroom Foundation about how this process will be completed,” he said.
“They’re still assessing the situation,” he said, referring to the bank. “The boats need an evaluation.”
Camden National Bank officials could not be reached late Thursday afternoon.
David Jones, who runs a yacht brokerage in Camden, said the story of Ocean Classroom is a sad one.
“Either the programs that they’re selling have lost appeal or the maintenance on the boats hasn’t been good,” he said. “You’ve got to put money back into the boats.”
He said he recently saw the Spirit of Massachusetts and it was in a “very sorry condition.”
When the organization was founded in 1996 by Alix Thorne, Ocean Classroom had only one ship, the Harvey Gamage, according to its website. The organization ran accredited programs for students from middle school through college seeking a hands-on educational experience at sea, including a semester-long program for Proctor Academy, a private New Hampshire high school school. Students pay $20,000 a semester to participate in the program.
The Ocean Classroom Foundation manages another ship, the Amistad, a 78-foot schooner that was built in 1999 and is owned by Amistad America, which Beranger headed before he joined Ocean Classroom two years ago.
The Amistad is Connecticut’s flagship and was built to commemorate a group of West Africans who were illegally captured, but won their freedom in a Connecticut court. The state pays the organization almost $360,000 per year, according to a representative for Connecticut’s Department of Economic and Community Development.
The organization drew scrutiny from Connecticut lawmakers after it failed to file federal tax returns and it lost its nonprofit status, according to local media reports.
An audit of the company, which has spent close to $8 million of Connecticut taxpayer money, according to the Connecticut newspaper The Day, is currently underway.
Under a contract between the two organizations, Amistad America Inc. pays the Ocean Classroom Foundation $5,000 per month for insurance, crewing and other marine services, according to the Connecticut spokesperson.
“Were there challenges because they were not able to make all their payments, which impacted our cash flow management? Yes,” Belanger said. “But Amistad’s contract was not the cause of Ocean Classroom’s systemic financial problems.”
The Spirit of Massachusetts, the Harvey Gamage and the Westward are three boats owned by the Ocean Classroom Foundation. The organization’s financial situation is so dire that it will not be able to operate after August.