The Guggenheim regroups: The Story Behind the Cutbacks: in financial crisis, and with its downtown NYC expansion plan deferred or defunct, the Guggenheim museum continues to explore ambitious new global projects - Art & Money

Art in America, Feb, 2003 by Lee Rosebaum

The most recently envisioned new Guggenheim Museum, a Jean Nouvel-designed project for Rio de Janeiro, is partly underwater--an apt metaphor for a museum empire that's been drowning in deficits. No sooner had he acceded in December to demands by his board chairman and chief financial supporter, insurance magnate Peter B. Lewis, to adopt a bare-bones 2003 budget marked by prudent fiscal conservatism, than Thomas Krens, director of the Solomon R. Guggenheim Foundation, was packing his well-traveled bags for Rio de Janeiro to promote yet another ambitious satellite plan. The $250-million construction cost for the proposed project was more than twice the figure mentioned by Rio's mayor to Brazilian journalists in New York in November. Some $30 million to $60 million of this proposed budget would be used to improve the site and to create a concrete-injected perimeter, keeping water out of a structure that would descend about 26 feet below sea level, on a pier jutting into Guanabara Bay.

Krens also revealed in a wide-ranging interview with this reporter that he hoped to charge Rio $40 million for the Guggenheim's imprimatur, which includes access to its expertise and collections. That amount is twice what the Basque government paid for the naming rights on its acclaimed five-year-old, $10O-million Frank Gehry-designed tourist magnet in Bilbao, Spain. Before receiving a full explanation of its costs, many Rio politicians and residents were already expressing strong misgivings about the project.

Unique features of Nouvel's design include an outdoor tropical rain forest and a subterranean entrance lobby, offering underwater views of a reflecting pool through a glass ceiling. A 167-foot-high cylindrical tower would house special exhibition galleries, topped by a restaurant. In November, the Guggenheim presented to officials in Rio a detailed $2-million feasibility study, financed by the city. At this writing, Krens was hoping for a go-ahead from Rio by mid-January, followed by approval from the Guggenheim's board at its Jan. 23 meeting. By the time this article is published, the project could be approved, scrapped or still under consideration.

"Developing the Guggenheim into a Global Brand" is the title of a lecture Krens offers to groups intrigued by his audacious museum-management style, often hailed in the past as "visionary." It has also been one of Krens's chief preoccupations during his 14-year reign as director of the Guggenheim Foundation. Whatever the final verdict on Krens's approach to museum management, his legacy will include important architectural and artistic commissions. Among them are Frank Gehry's Guggenheim Bilbao, Rem Koolhaas's Guggenheim Las Vegas and adjacent Guggenheim Hermitage, and video artist Bill Viola's profoundly moving magnum opus, Going Forth by Day, recently on view in New York. Krens has significantly expanded the Guggenheim's collection, partly with the help of funds from its international branches. He has greatly broadened the scope of and the audience for exhibitions, and forged alliances with the State Hermitage Museum in St. Petersburg as well as the Kunsthistorisches Museum in Vienna, to exchange art and staff and to develop museum construction projects.

But the "global brand" that Krens is now brandishing in Rio has become tarnished by the Guggenheim's recent setbacks. And unlike Bilbao in the pre-Guggenheim years, Rio is already a major tourist destination, so the drawing power of the Guggenheim's cachet may be limited.

Even Krens candidly acknowledges that he's got to start doing things "the old-fashioned way." The museum's "number one priority," he said, will now be "the building of the board and the endowment." Speaking in mid-November, Krens vowed that the Guggenheim Foundation--umbrella organization for the flagship Frank Lloyd Wright-designed New York museum and its outposts in Venice, Bilbao, Berlin and Las Vegas--would balance its budgets for 2002 and 2003. That goal received an important assist from Lewis, who announced at the December meeting of the Guggenheim's board that he would give the foundation $12 million by the end of that month, adding to his previous $50 million in gifts to the museum since 1995. Krens said the money would be used to wipe out last year's deficit, pay debt service on bonds, eliminate outstanding bills and provide funds toward this year's operating expenses.

Krensian Economics

The Lewis largesse is the latest in a series of rescues for a museum that has periodically been desperate for its next financial fix. The Guggenheim's former board president, Ronald Perelman, for whom the Guggenheim's rotunda is now named, accelerated payment of his $20-million pledge ($10 million in 1994 and an additional $10 million in `95) to help make ends meet in the late 1990s. Perelman left the board in 1999. Some $30 million that Lewis had originally intended for the endowment wound up paying the bills and debt service instead in 2000. Fashion designer Giorgio Armani's pledge, reported to have been about $15 million, looked to many observers, despite Guggenheim denials, like a quid pro quo for transforming the New York Guggenheim, and later the Guggenheim Bilbao, into Armani showrooms in 2000 and 2001.