A Northern Kentucky theme park to be built around a full-scale replica of Noah's Ark might sink unless investors buy about $29 million in unrated municipal bonds by Feb. 6.
In December, the city of Williamstown issued taxable debt for affiliates of the Christian non-profit Answers in Genesis, data compiled by Bloomberg show.
Even though $26.5 million of securities have been sold, the project needs to sell at least $55 million to avoid triggering a redemption of all the bonds, Ken Ham, the non-profit's president, wrote in an email message Thursday to supporters.
Without the money, construction funding will fall short, he said.
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"We still need those Ark supporters who weren't able to purchase the Ark bonds at closing to prayerfully consider participating in a secondary bond delivery at the level they had indicated to us," Ham said. "Will you please step out in faith with us?"
Proceeds are intended to help build a 510-foot, or 300 cubit, wooden ship, the centerpiece of a planned biblical theme park called Ark Encounter.
The project has drawn comparisons to tourist attractions in Alabama and Nebraska that have defaulted, and it comes with the added risk of legal challenges because its religious theme might violate the U.S. Constitution.
The Washington-based group Americans United for Separation of Church and State said it is monitoring the project.
Industrial-development bonds are considered the riskiest municipal debt because they account for the largest proportion of defaults in the $3.7 trillion municipal market. Williamstown issued the bonds without a rating, making the prospect of repayment even less clear.
The first phase is estimated to cost $73 million, offering documents show. About $14 million had been raised before the bond sale, which was supposed to make up the difference.
Instead, Ark Encounter has had no institutional investors buy its bonds, Ham said.
"The associated complications and struggles have been beyond our control," said Ham, who cited impediments such as atheists registering for the offering and disrupting it. "I urge you to please prayerfully consider the options and help us get this bond offering completed."
The documents cite at least 39 risks to buyers, including that Answers in Genesis has no obligation to back the debt. Bondholders' sole revenue would come from money spent by visitors.
The debt can be obtained in the form of a physical certificate from Minneapolis-based U.S. Bank, the bond trustee, or through an individual retirement account at a company that will accept such a certificate, according to the email message. The IRA deadline is two days earlier, Feb. 4.
Construction is supposed to begin in March, with Ark Encounter scheduled to open in April 2016. It would be built on about 200 acres, with 800 acres reserved for ventures such as hotels and restaurants, offering documents show.
Dan Blank and Zach Logan at the underwriter, Ross Sinclaire & Associates, didn't immediately respond to voice mails seeking comment. Joe Boone, vice president of advancement at Answers in Genesis, didn't return calls to his office and mobile phone.