Colonial Williamsburg announces layoffs, major changes

Contact Reportertbozick@dailypress.com

The Colonial Williamsburg Foundation plans to lay off 71 people by the end of the year and is outsourcing some operations as part of a restructuring plan to become financially stable by 2019, President and CEO Mitchell B. Reiss announced Thursday.

Colonial Williamsburg plans to outsource management of its golf operations, retail stores, commercial real estate and much of its maintenance and facilities operations, Reiss said. Another 262 employees, if they choose to transition, would work for outside contractors, who agreed to keep the staff for at least one year.

"We want to manage what we do better and bring in professional managers to run them profitably," Reiss said in a phone interview.

The move would reduce Colonial Williamsburg's workforce from about 2,400 full-time employees to about 2,100, according to the foundation. Colonial Williamsburg employs another 500 part-time workers, but that number fluctuates seasonally, a spokesman said.

Reiss, who became CEO in 2014, released a stark open letter to the community, informing readers of the foundation's serious debt, operating losses and the need to return Colonial Williamsburg to its core educational mission, including Historic Area preservation, museums and programs.

"Ultimately, doing nothing would mean the end of this national treasure, and that would harm every single person who works here, their families, and our community," Reiss wrote.

The restructuring decision, endorsed by the board of trustees, comes after the foundation suffered operating losses of $54 million — or $148,000 per day — in 2016, according to a foundation fact sheet. The foundation lost $277 million from operations during the past five years.

The nonprofit has been withdrawing excess funds from its endowment to cover losses, but continuing to do so isn't financially sustainable, particularly as the foundation's debt was $300 million at the end of 2016 and those payments are coming due, Reiss said. The value of Colonial Williamsburg's endowment is $684 million, and the portion available to fund operations could run out in about eight years without changes, according to the fact sheet. The foundation said it has withdrawn $639.6 million, including $200 million in supplemental withdrawals, from the endowment during the past decade.

"I'm not happy about the news, but unless people understand, they won't be able to support us, and I won't be able to lead this organization into the future," Reiss said.

Donors and supporters had been emailing the foundation after hearing the news Thursday, indicating support for a returned core focus, Reiss said.

He said he has some ideas and vision for Colonial Williamsburg's future, but solving the foundation's financial problems must come first.

Multiple previous decisions got the foundation into financial straits, including heavy borrowing to improve hospitality facilities and the visitor center, Reiss said. That was compounded by declining attendance.

"We think we'll be able to turn losses into profits going forward," Reiss said.

Colonial Williamsburg taverns will continue operating, and visitors shouldn't notice a change in their experience, Reiss said.

The foundation plans to ask the city of Williamsburg for tax relief, Reiss said.

"Today is the day when I'm asking for help, and I'm hoping our friends will step forward and help us," Reiss said.

Williamsburg City Manager Marvin Collins said the city would evaluate any future requests and would seek collaboration on mutual goals.

"The Colonial Williamsburg Historic Area is central to the city's strategic goal 'to protect and enhance Williamsburg's unique character and iconic landmarks,'" Collins said.

Don Pratt, owner of Aromas and president of the Merchants Square Association, said taking action to stop hemorrhaging money was past due.

"It is very, very unfortunate that such an action had to be taken because there are many people who are going to feel the brunt and pain of what hasn't been done and should have been done in the past," Pratt said. "It was a painful day."

State Sen. Thomas K. "Tommy" Norment Jr., R-James City, College of William and Mary President Taylor Reveley and Greater Williamsburg Chamber and Tourism Alliance president and CEO Karen Riordan released prepared statements in support of moving Colonial Williamsburg to a sustainable path.

"There is no denying this is a challenging situation," said Norment, who serves on the foundation board.

While the changes will not be easy, the long-term consequences of continuing on the current course would be more devastating, Riordan said.

"Without a thoughtful plan to turn things around, the foundation will continue to bounce from crisis to crisis and will ultimately be lost to us within the decade," Riordan said. "Colonial Williamsburg put Williamsburg on the map as a tourism destination and must be here for future generations of locals and tourists to experience and enjoy."

Bozick can be reached by phone at 757-247-4741.

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