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Faced with bond debt, Long Beach threatens art museum with sale of artwork

The museum's collection, valued at about $25 million, is a potential target for sale if the museum can't pay its debt by September.

June 19, 2009|Louis Sahagun

For nearly six decades, the Long Beach Museum of Art has served as a cozy, seaside pavilion of sloping gables, breezy verandas, gleaming wood floors and striking renderings overlooking the Pacific.

Now, facing a $3-million bond debt that is due in September, the museum is fighting to maintain its collection amid calls for a city takeover and the sale of some of its most valuable works of art.

Selling museum artworks for any reason other than acquisition or care would violate the code of ethics established by the American Assn. of Museums. But with the city's budget deficit at about $20 million, Long Beach City Councilman Patrick O'Donnell said, "all options will remain on the table until the bond is paid off."

That riles the museum's executive director, Ron Nelson, who fears that the facility, which currently houses 3,100 items worth an estimated $25 million, could become a pariah in the art world by selling works donated for safekeeping.

"We're fighting tooth and nail against a hostile takeover," he said. "If the city prevails, the security of our collection, support for ongoing educational programs and future donations and gifts -- all will be lost."

Nelson added that he may stop accepting donations altogether until the controversy is resolved. "After all," he said, "why would anyone want to contribute to a museum that sells its works to pay its bills?"

Under a cooperative agreement, the city owns the museum and 1,400 works of art acquired prior to 1985, including the Milton Wichner Collection, which contains Modernist paintings by Lyonel Feininger, Vasily Kandinsky and Alexej Jawlensky from the 1910s to the 1930s given to the museum in 1979 with the understanding they would be protected in perpetuity.

The Long Beach Museum of Art Foundation owns the rest of the collection and handles day-to-day operations, including a popular seaside cafe.

In 1999, the foundation launched a campaign to obtain funds for construction of a new two-story exhibition pavilion. Under the agreement, the city promised to accept liability for the bond debt if the foundation could not pay it off.

The museum, with an annual budget of $3.4 million, has been chronically deficit-ridden since the expansion doubled its space.

In a terse statement, Long Beach Mayor Bob Foster warned "there will be consequences to the museum for not following through on its contractual commitments."

The city is already studying a variety of options, Foster said, including, "trusteeship, contracting management and operations, private ownership and the city taking outright control of the museum's assets."

Then there is Patrick O'Donnell's suggestion that the city investigate the possibility of selling off art.

"That's not a preferred option, but all options are on the table," O'Donnell said. "The bottom line is this: We are obligated to create a balanced budget and this debt is hindering our ability to meet that obligation."

Nelson is steadfastly opposed to any effort to "go through the collection with a shopping list of paintings worth the most money."

The foundation has offered to transfer full control of the pavilion, which has a replacement value for insurance purposes of $8.5 million, to the city. It has also pledged $419,000 to the city toward repayment.

City officials, however, believe the property is worth far less than that because it has been formally designated for use as a museum or park.

In any case, "the city should help us out -- we've been doing the best we can under the circumstances," said Roberta Jenkins, the foundation's chair. "The economy is bad and fundraising institutions around the world have had trouble raising money over the past two years."

In January, art experts blasted a proposal to close Brandeis University's Rose Art Museum and sell its collection. Earlier this month, the Orange County Museum of Art in Newport Beach quietly sold 18 of its 20 California Impressionist paintings to an undisclosed private collector.

Many other museums "have had to cut staff and hours to keep their doors open," said Dewey Blanton, a spokesman for the American Assn. of Museums.

"However, the situation in Long Beach seems to be unique," Blanton said. "I've never heard of co-owners of a museum being at such loggerheads."

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louis.sahagun@latimes.com

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