Visit the Getty Center, and you can get a sense of what its fiscal overseers have experienced in five years of running it: a steep ride up and a steep ride down, all for the sake of an edifying encounter with art.
The tram ride to and from the hilltop museum and research complex in Brentwood is a mile-and-a-half round trip and doesn't cost a cent. But the art institution's up-and-down financial journey can be tallied in billions gained, lost and spent.
The market boom of the late '90s pushed the Getty's endowment to its summit, $6.1 billion, during the summer of 2000. Since then, the market slide of the new century has shaken $1.7 billion out of one of the nation's richest cultural piggy banks, leaving it at $4.4 billion -- or just about where it stood when the Getty Center opened in December 1997.
That's OK with Barry Munitz, president of the J. Paul Getty Trust, which funds and operates the Getty Center.
Suppose a seer had appeared to him on Jan. 5, 1998, his first day on the job, and proposed a deal: You can spend an average of $284 million per year for the next five years -- enough to keep up the place, meet payrolls for a staff of about 1,300, pay off the construction debt, add to the art collection and conduct high-level academic research and art preservation projects. You'll be able to share it all free of charge with 7.4 million visitors -- and you'll still be sitting on a $4-billion-plus pile when the time is up.
"I would have signed that piece of paper in the morning," Munitz says.
"It's quite enviable," says Ed Able, director of the American Assn. of Museums. "These are very, very stressful times for museums because all revenue sources have been undermined simultaneously," leading in some cases to staff cutting and the closing of galleries. Meanwhile, the Getty Center sits in relative fiscal serenity atop its hill and its mountain of cash.
"The stability of their funding," says Able, "means they don't have to generate the kinds of outside income that other museums must generate."
Despite that nice cushion, the Getty Trust faces the same economic uncertainties as every other investor, and some major expenses loom. The long-delayed renovation project at the Getty Villa in Pacific Palisades is estimated to cost $250 million. (See accompanying box.) If it goes forward, the plan is to borrow that sum and pay it down long term, at interest rates projected at 2% or less. But when the villa reopens -- two years from now under the current timetable -- the operating expense, which Munitz estimates at $30 million a year, will be immediate.
"It's our main financial challenge," he says.
There's also a $50-million painting in the pipeline -- the Getty Trust having agreed to pay the British owner of Raphael's "Madonna of the Pinks" that sum, unless some buyer in the U.K. can match it under a government program designed to keep historic artworks on British soil. The Getty won't divulge what it spends on art acquisition, but Munitz says it steadily has exceeded the $30.6-million annual average that New York's Metropolitan Museum of Art reported in public financial statements for the three fiscal years from 1999 to 2001. Private collectors, rather than other museums, are the Getty's most formidable bidding rivals.
"Everybody's always telling me, 'Boy, it's great to be able to get anything you want,' " Munitz says. "Most of the things we've gone after lately we haven't gotten. We stay disciplined, and we just won't go any higher than what we think the right price is. Private collectors don't necessarily work that way. They have the money, they like something, and they don't have to [worry about] paying the electric bill for the tram."
The Getty's self-set ceiling for all its annual spending is 5% of its endowment's average value over the previous three years. The investment strategy calls for betting about 60% to 65% of the endowment on stocks and an additional 5% to 10% on "alternative investments" such as private equities and venture capital opportunities. About 30% stays in conservative fixed-income securities such as government and corporate bonds and federally insured mortgage pools. Munitz says the Getty Trust has a series of indexes and benchmarks it uses to rate how its investments are performing. Overall, he said, during the downturn the trust's returns have bettered those standards by about 1.5%.