February 23, 2009 / 11:48 PM / in 10 years

NY-based Sports Museum of America shutters doors

NEW YORK (Reuters) - The New York-based Sports Museum of America shut its doors on Friday, just nine months after opening as efforts to restructure its debt failed.

The for-profit museum, opened last May, was touted as the first of its kind in the United States.

Construction of the museum in lower Manhattan was funded by $52 million of tax-exempt and $5 million of taxable Liberty bonds issued by the Empire State Development Corp in 2006.

JP Morgan, lead underwriter on the issue, said no one was able to comment.

The 6.125 percent bonds due 2019 were last quoted at 50 cents on the dollar, according to Interactive Data Corp. That was down from 88.689 cents last August.

Liberty bonds were part of a $20 billion package Congress granted New York City to assist an economic recovery in lower Manhattan following the September 11, 2001 attacks.

A spokesman for New York Governor David Paterson declined to comment on the museum’s closing. The project was originally supported by the administration of Republican George Pataki, the three-term New York governor from 1995 to 2006.

The museum suspended payments on the bonds late last year and struggled since then to restructure the debt, according to media reports.

Founder and Chief Executive Philip Schwalb is reported to be seeking a buyer and may be forced to liquidate if none is found. Efforts to reach Schwalb by telephone were unsuccessful.

The museum’s collection of memorabilia is on loan from individuals and sports organizations across the United States.

The museum is home to the Heisman Trophy, which is awarded annually to an outstanding college football player. It also houses the Billie Jean King International Women’s Sports Center, named after the former tennis champion.

Schwalb has said the museum was hurt by a $6 million construction cost overrun that ate into the its marketing budget.

Reporting by Tom Ryan; Editing by Dan Grebler

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