The art world has long been dependent on the financial industry. Not surprisingly, artists and museums have begun to worry about how the collapse of so many once mighty banks and brokerage houses might hurt their own bottom line.
Artnet asks some questions—that mostly go unanswered—about how the collapse of Washington Mutual and Wachovia might effect the Seattle Art Museum and the Philadelphia Museum of Art.
It seems that the Seattle Museum of Art rents the land on which WaMu, which is the largest commercial tenant in Seattle, built its headquarters on land that belongs to the Seattle Art Museum.
Washington Mutual, the nation’s largest savings-and-loan, was forced to sell itself to JPMorgan Chase last week, marking the largest bank collapse in U.S. history. The fallout is not yet clear. Among the bystanders, however, one potentially left holding a bag is the Seattle Art Museum (SAM), which entered into a much-touted partnership with the bank when it opened its expansion in 2007 [see Artnet News, May 1, 2006].
As befits a time of derivatives and credit default swaps, the WaMu-SAM deal was teeth-achingly complex. Basically, the two institutions shared SAM’s 16-floor, Brad Cloepfil-designed expansion in downtown Seattle, with the museum using the first four floors of the building for exhibitions. WaMu owned the top four floors of the new structure outright, and leased the remaining floors from the museum for $4.6 million (a significant contribution towards SAM’s $24-million annual budget).
As part of the deal, Washington Mutual also got to build its own new headquarters on museum land adjacent to the expansion, purchasing development rights for $18 million, an $8-million discount on the appraisal. The sweetheart deal — no one else was allowed to bid on the rights — was justified by the fact that WaMu was helping out a loved nonprofit. For similar reasons, WaMu was allowed by the city to exceed zoning regulations in constructing the 42-story Washington Mutual Tower, getting 900,000 square feet of new space for its headquarters.
At this point, all this space — WaMu was the largest commercial tenant in the city, with 1.6 million square feet owned or leased in downtown Seattle — looks like a prime example of monumental overreach. Seattle is bracing for major cuts in the bank’s local operations.
The effect of such cutbacks on the Seattle Art Museum remain to be seen. According to the museum, WaMu is current on its rent, and the new owner is responsible for maintaining the arrangement with the museum.
Meanwhile, local wags have quickly noted the museum’s vulnerable position. According to Monica Guzman in the Seattle Post-Intelligencer, pranksters stuck a fake “Notice of Proposed Land Use Action” on the front of WaMu Tower last night. The notice proclaimed that the building would be converted into condos and retail, adding that “[t]he connected museum complex will be demolished to clear space for a future parking garage.”
And down in Philadelphia, Wachovia was a big sponsor of the Philadelphia Museum of Art’s Education Resource centre, which is now called the Wachovia Education Resource centre.
The Philadelphia Museum of Art (PMA), meanwhile, has had a notable partnership with Wachovia, another banking giant that disappeared into the ether in the last few days (under government pressure, Wachovia sold itself to Citigroup). The Charlotte, N.C.-based financial institution had a specific charitable focus on community development and education, but teamed with the PMA to fund the creation of the Wachovia Education Resource centre, which promotes arts education with area children, in the recently opened Perelman Building on the museum campus. In 2004, the bank supported the initiative with a $750,000 gift. On the opening of the new building in Sept. 2007, Wachovia stepped in with another $500,000 gift, bankrolling free admission to the facilities for the last four months of the year.
So, does the end of Wachovia signal a name change for the PMA’s education centre? “What a bizarre question,” said a museum spokesman. At present, the name remains — leaving the Wachovia Education Resource Centeras a monument, for the time being, to a bygone era.