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Possible Shinn takeover not welcome news at Storytelling Center

Stopping just short of accusing the former New Orleans Hornets’ owner of mounting a form of hostile takeover, International Storytelling Center leaders are telling George Shinn they don’t want his help.
In a strong response to recent news of Shinn’s interest in and potential involvement with getting the ISC out of financial trouble, ISC President Jimmy Neil Smith and the organization’s Board of Directors are making it clear that Shinn’s offer, which may sound too good to be true, is not a welcome one.
The ISC Board accuses Shinn of offering to help the organization out of its financial woes with “significant strings attached.”
“Rather than the ‘savior’ position outlined in a recent newspaper headline,” Smith says, “Mr. Shinn made it unequivocally clear that any proposal from him would be conditional upon his assuming full and complete control of ISC, including the production of its annual festival.
“Mr. Shinn intends to put into place his own leadership team, staff and board. Furthermore Mr. Shinn stated that he offered to pay creditors ‘pennies on the dollar.’ Mr. Shinn’s involvement may also threaten the cultural integrity of the festival.”
When Shinn appeared before the ISC Board of Directors recently to express his interest in the financially-troubled ISC, he indicated he was interested in acquiring the assets of the organization, according to Smith.
Currently, Smith says, no formal written proposal has been made by Shinn.
The two verbally agreed that since any public statement concerning the discussions would be premature, no public comments would be given. Since then, Smith says, Shinn has worked with his publicist to promote himself and his ideas about his plan for the ISC to at least one media outlet.
“There is a concern among local businesses, donors and others close to the Storytelling Center and festival regarding their future if the ISC is taken over by Mr. Shinn,” said ISC Board chairman Jim Reel. “The people closest to the ISC know that a takeover by Mr. Shinn puts Jonesborough in danger of losing a national treasure.”
The ISC hoped to work with Shinn as a potential donor since they learned of his interest in storytelling last year, Smith said.
Shinn brought his NBA team to East Tennessee State University’s mini-dome last year to play in a pre-season game that benefitted both ETSU and the ISC.
Shinn, who owns property in Telford, has an extensive business background that includes owning the Charlotte Hornets NBA franchise, which he later moved to New Orleans before selling the franchise last year.
“Since filing for Chapter 11 reorganization in December, the International Storytelling Center has slimmed down its budget through staff reductions, personal sacrifice including pay cuts and operational cost-cutting…while also maintaining its reorganization goals with the protection of the Bankruptcy Court,” Smith said. “It is our full intent to come through Chapter 11 successfully and to remain intact.”
The ISC maintains that its financial problems, which include more than $4 million worth of debt, stem from a variety of issues including construction over-runs, unexpected and costly environmental soil sampling, reduced attendance at the festivals over the last few years and the economic recession.
According to the ISC, festival attendance spiraled downward 12-16 percent annually in 2008 through 2010, amounting to over $400,000 in lost revenues.
According to an ETSU Bureau of Business and Economic Research study published in April 2009, the ISC has a nearly $7 million dollar annual impact and is responsible for over 100 jobs in the region each year.
The study goes on to say that, “Each year that the center operates, the region reaps multiplied benefits from associated spending. Clearly the International Storytelling Center is an important contributor to the region’s economic welfare.”
The ISC is currently in its 39th year of business.
Smith says he sees the current bankruptcy filing as an opportunity for the ISC to reorganize within a reasonable period of time preserving the historic traditions of the festival.
Recently, Town of Jonesborough officials expressed concern over the future of the ISC and discussed their plan to be ready, “if the opportunity should present itself,” to be in a position to possibly purchase the ISC building and then lease it back to the ISC.
Town Administrator Bob Browning confirmed that the town is continuing to monitor the ISC’s progress as it works through the Chapter 11 proceedings.
“We have to wait and see how the issues work out,” Browning said. “The biggest concern the town would have would be what happens with the building and the festival. It is very important to the future of Jonesborough. But right now, there isn’t much we can do except just pay attention to where it’s headed. It would be irresponsible for us not to be monitoring the situation. For it to be lost or used for something completely different could impact the economic well-being of the town.”
Shinn did not immediately return calls made to him by the Herald & Tribune on Monday.