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After five years of mounting debt, the Napa food and wine center Copia is laying off a third of its workers, shuttering exhibit space and selling land for development in a bid to finally operate at a profit.

Major changes have been looming for months at the huge center with great ambitions, where attendance has fallen short of expectations and losses of more than $4million annually have sucked down cash reserves.

"This day has been a long time coming," said Arthur Jacobus, Copia's president. "I think it was an ambitious undertaking. In a way, you can say it could be growing pains."

Layoff notices went to 25 of the 80 workers this week, with most of those effective next Friday. Under the next step of the restructuring plan, Copia will convert its main art exhibit area into space for conferences and will sell five acres of gardens and parking lots to a developer.

Copia should emerge next year with a balanced budget for the first time since opening in November 2001, Jacobus said.

He said the cuts are painful, yet do not alter Copia's primary mission celebrating Wine Country's place as a center for fine wine and food.

"We tried to keep the programs as intact as possible," he said.

The vast majority of the public is interested in the food and wine offerings at Copia, so the reduction of the art portion will likely be little noticed, said Brian Kelly, president and chief executive for Charter Oak Bank and a founding Copia member.

"My sense of this, as an individual, is that to the general public and visitor it's going to be transparent," Kelly said.

Still, these are just the most dramatic in a succession of changes for the struggling center.

Copia: The American Center for Wine, Food and the Arts was the dream of legendary winemaker Robert Mondavi and other Wine Country luminaries. Mondavi bought the 12-acre site in downtown Napa and provided $20million toward what became $55million in cash raised for Copia.

Capturing and expanding the legacy of American contributions to wine and food was a first-of-its-kind undertaking.

Construction of the 80,000-square-foot, polished concrete, metal and glass building began in 1999, funded by $70million in tax-exempt bonds. Copia is a nonprofit institution with all income from ticket sales, membership and donations supporting programs and exhibits.

Copia opened in November 2001 and the timing couldn't have been worse. Recession gripped the region and the nation, and the tourism industry was struggling in the wake of the Sept. 11 terrorist attacks.

Attendance totaled 205,000 the first full year of operation, well below the anticipated 300,000. Attendance since has sunk to 140,000 to 150,000 visitors annually.

Earlier this year, Copia slashed its admission fee from $12.50 to $5. It then decided to eliminate admission fees entirely for three months, an idea designed to boost spending in the museum's gift shop, cafe and flagship restaurant, Julia's Kitchen.

As a result, Copia has experienced a surge of visitors. The center expects about 200,000 visitors by year's end. Revenues should increase 20percent this year, despite the free admission promotion and cut in ticket prices.

But Copia projects another annual operating deficit this year. With $13million in expenses and $9million in revenue, Copia's administrators again will dip into cash reserves to balance the books, Jacobus said.

By losing more than $4million each year, Copia has nearly eliminated its $55million in cash reserves. Copia could continue at that pace for only another year or two, he said.

Adding to the financial squeeze is the annual payment due on the construction bonds. The payment jumped from $3million in each the first four years to $5.3million last year and over the next 25 years.

Jacobus, hired in July 2005 to turn around the center's flagging fortunes, and Copia's trustees have settled on a plan they are confident will put the center on firm financial footing.

"This is one of the larger challenges I have faced," said the longtime performing arts administrator and onetime San Francisco Ballet executive director. "But the good news is we have found a way to make it work.

"We took a situation that was heading down a pretty dismal path and found a strategy and a set of actions that will set us up for the future."

First are the layoffs. The cuts are mainly in administrative positions and should not affect the center's programs, Jacobus said.

"The people who are left are going to have to do a lot more. But there's no question that we can make this thing work," he said.

The land sale will be a major revenue boost, although Jacobus would not disclose the price or the buyer. He said a deal is near that will include an agreement on the type of construction, including a hotel, restaurants, retail stores and possibly condominiums.

"It's going to be a development very compatible with Copia," Jacobus said.

Converting the 13,000- square-foot exhibit space into conference space should turn an area that lost money into one that generates revenue. Art exhibits were included in the admission price, yet the space was expensive to maintain because of temperature controls and other utility demands, Jacobus said.

Kelly, chairman of the Napa Valley Conference and Visitor's Bureau, said the center was smart to narrow its focus because the art offerings were clearly a money-losing proposition.

"To the locals, I just don't know that art was that big a thing," Kelly said.

Two of the current art exhibits at Copia are "Forks in the Road," which, according to the Web site, "examines contemporary culture through shared expectations of food and drink," and "Canstruction," a display of structures built out of cans of food.

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