Museum Closure Exposes Financial Risk of Signature Architecture

© Michael Moran

–Although the American Folk Art Museum has avoided dissolution thanks to a cash infusion from trustees and the Ford Foundation, the institution’s ongoing financial troubles raise difficult questions about the relationship between and cultural capital.

The museum’s former home on 53rd Street opened in 2001 after a renovation by Billie Tsien and Tod Williams. To finance the construction, the museum borrowed $32 million by issuing bonds through the city’s Trust for Cultural Resources, a public benefit corporation that helps cultural institutions borrow money for capital projects. The payments on the bonds were significant, about $3 million a year, and in 2009, the museum defaulted on the debt.

Despite early optimism, the American Folk Art Museum’s renovation project did not raise attendance or donations to the levels needed. Last year, as it ran a nearly $4 million deficit, the museum raised just $3.3 million from donors. As we reported in May, the museum was forced to sell its building on West 53rd Street to the Museum of Modern Art to pay off the debt. Before opening, consultants predicted the building would draw 255,000 visitors a year by 2005. In 2011, the museum only attracted the equivalent of 160,000 per year.

Like many other museums, the American Folk Art Museum saw capital improvement as a means for bolstering public awareness and philanthropic revenue. The last two decades has witnessed a dramatic increase in such projects, with Frank Gehry’s design for the Museo Guggenheim Bilbao probably the most notable in a category which also includes the Milwaukee Museum of Art (Santiago Calatrava, 2001), and the ICA/Boston (Diller Scofidio + Renfro, 2006). These projects, wherein signature architecture is essentially used as collateral for outside financing, differ from other iconic projects such as The Getty Center (Richard Meier, 1997), Islamic Art Museum, Doha (I.M. Pei, 2008), or the ongoing expansion of LACMA (Renzo Piano and Peter Zumthor), which were well-funded before construction.

The American Folk Art Museum serves as a potent reminder of the risk associated with architectural investment. While Yoshio Tanaguchi’s redesign of MoMA (completed 2004) has increased yearly attendance from 1.5 million to 2.5 million, the museum has had to raise its admission price from $12 to $20. The Please Touch Museum in Philadelphia spent $88 million to renovate a large structure constructed for the 1876 Centennial Exhibition, assuming it’s fundraising campaign would cover the costs. Donations slowed drastically after the museum’s reopening in 2008, and the institution has fallen $21.5 million short of its fundraising goal (read more). The Asian Art Museum of San Francisco, which shared space with the de Young Museum until 2003, spent $160 million renovating its new home in the former San Francisco city library. After refinancing with a variable interest rate in 2005, it was soon facing a 9% interest rate, equivalent to half their yearly operating budget (read more). The museum narrowly avoided bankruptcy when its outstanding $120 million debt was refinanced in February (read more).

FOR MORE ON TROUBLE AT THE AMERICAN FOLK ART MUSEUM, SEE:

Critic’s Notebook: As Folk Art Museum Teeters, a Huge Loss Looms, Roberta Smith, NYT. http://www.nytimes.com/2011/09/20/arts/design/preserving-the-american-folk-art-museums-place-in-new-york.html?ref=nyregion

With Help From Friends, Folk Art Museum Will Stay Open, Robin Pogrebin, NYT. http://www.nytimes.com/2011/09/22/nyregion/american-folk-art-museum-to-stay-open.html

Cite: Jacobson, Samuel. "Museum Closure Exposes Financial Risk of Signature Architecture" 27 Sep 2011. ArchDaily. Accessed 26 Nov 2014. <http://www.archdaily.com/?p=171620>
  • allan

    I personally think the problem Herr has much more to do with interest in the product being displayed – American folk art – than the cost or quality of the architecture employed to display it in. As an NYC local and MoMA member since 2005 I can honestly say that I walk past this museum regularly but have only been there once – and them only to see the architecture!

    So in my case, in particular, the architecture actually brought me into a museum which I otherwise had no serious interest in viewing.

    Ihad to say something because I entirely disagree with the point of this article. I believe entirely that quality architecture absolutely serves to increase and prove the quality and usership of a place, most especially for cultural centers.

    Look at Kimbal Art center in Texas. The Renzo Piano museum in Chicago or San Francisco, or Paris. The MOCBA by Richard Meier Barcelona, even the MACBE in Vienna, Austria. The list goes on, ad nauseous. Are we really saying that the architecture did nothing more than add to the cost of the project?

    • Randy

      Pretty much, yes.

    • and

      Totally agree with mr.Allan. I hope Archdaily won’t deny the quality of a good project despite its cost. The problem is financial, and it belongs to the Museum Institution. If I have the chance to go to NY I will sure visit this museum for its architecture, having noticed it by magazines. And of course I will be curious of its collection.

  • Rick S.

    I’m happy that, maybe inadvertedly, the article ends up denying its own point.
    It is clear that the problem is not in the cost of the building, but in the quality of the funding policies and the supporting consultancies implemented.
    The budget of a building is based on the evaluation of the consultants (here, the over-optimistic 255,000 visitors a year!), and approved by the promoters, not settled by the architects. In the end, ‘signature architecture (…) used as collateral for outside financing’ means essentially that the problem is in the ways of financing, not in signature architecture.
    The ‘well funded’ Getty Center and LACMA projects tell us that.

  • Doug C.

    Expansion is not without risk. While many are successful some will not be. The architecture has only a limited part of the blame; good & bad news for architects. A museum’s financial health and it’s planning is a critical part of the puzzle.
    Taniguchi’s renovation at MOMA is mediocre with the exception of the design + architecture collection which is hugely improved. Should we draw the conclusion that a middling but very expensive project is the way to go?

  • jason

    the museum basically did the same thing as so many homeowners…they bought too much house without the money in the bank to pay for it. the only real counter would be if the building went over budget because of deficiencies with the architecture.

  • ati

    hi dear friends.i wanna be your friend to get some information about architecture in your countries.do you accept my friendship request?atm0265@yahoo.com