Two of the Corporate World’s Distinguished Movers and Shakers Find That Reshaping O.C.’s Museum Scene Can Leave Folks A Little Bit . . . Well, Shaken

They seem perfectly suited to bring off a museum merger that could secure Orange County’s future in the visual arts.

Charles D. Martin and Gilbert E. LeVasseur Jr. have built successful careers by launching, restructuring and putting complex organizations together.

Martin, the venture capitalist and investor in leveraged buyouts, and LeVasseur, the merger specialist who made a small fortune buying and selling companies, know deal-making inside and out. When the two applied their skills to the art world last year, LeVasseur, as the Laguna Art Museum’s president, and Martin, a Newport Harbor Art Museum trustee, adroitly pulled together in a few days a proposed merger plan, something their respective institutions had tried to do for a decade.

The plan calls for making a financially sturdy museum out of two wobbly ones. The new Orange County Museum of Art would have reduced staffing, a collection of 20th century California art, and hopes of becoming a first-class venue.

Newport Harbor’s expanded facility in Fashion Island would be the headquarters, at least for awhile, with Costa Mesa often discussed as a final site. Original plans suggested closing the historic Laguna museum building, though public protest has forced deal makers to consider alternatives.

Indeed, Martin and LeVasseur are discovering the art museum business doesn’t work like any they’ve known.

While both love art--Martin began collecting more than a decade ago, LeVasseur has a few pieces--their inexperience in museum governance shows.

In their drive to cut a deal, they emphasized its financial merits while failing to articulate an artistic vision. They failed, too, to see how the broad constituencies their museums serve make the process of combining them far more complex than putting two companies together. They’ve ruffled some expensive feathers among trustees with fund-raising clout. They’ve angered Laguna citizens who want trustees recalled for suggesting that their local museum be closed.

Martin says, “‘What we dramatically underestimated was the element of a kind of self-centered parochialism within the Laguna community.”

Adds LeVasseur, “I thought we were doing the right thing for this institution and when anybody saw it, it’d be hands down, everybody’d go for it.

The duo, who have become friends in the process, recently discussed their views in a wide-ranging interview at the Pacific Club. They had just met over lunch at the private Newport Beach club to discuss whether Martin might invest in a company owned by a friend of LeVasseur.

LeVasseur is kicking himself for failing to read up on the Laguna museum’s quirky bylaws until a month ago. They give its 1,383 voting members--about 390 of whom live in Laguna--the power to approve or disapprove the merger.

If he’d known about them a year ago, he says, he would have followed standard corporate operating procedure: change the bylaws, shifting power to the trustees.

The two also feel they’ve been personally threatened.

Martin says that, while trustees from the two museums met Feb. 27 at the Five Crowns restaurant in Corona del Mar, somebody scratched his black Mercedes SEL with a key.

LeVasseur says someone left a message on his answering machine: “You can hurt us. We can hurt you.”

*

These two highly successful practitioners of the corporate deal might as well have landed on a foreign planet. They’re accustomed to quiet boardrooms, far from the glare of publicity.

In the private business world, Martin, who is 59, has built a reputation for his intelligence, integrity and artistic bent.

His longtime friend, Fred Chaney, the chairman of a Newport Beach-based company which runs education programs for company presidents, says Martin’s “raw mental horsepower” amazes him.

Martin, the son of a postmaster from Willard, Ohio, moved to California after putting himself through Ohio State University. He spent years running and advising companies on business development, mergers and financing. In 1985, he founded Enterprise Partners, a Newport Beach venture capital firm.

Enterprise has $215 million worth of investments in health care and information technology companies, with investors ranging from founders and chief executives of California companies to major organizations such as AT&T; and Citicorp.

LeVasseur, 52, a milkman’s son born in Washington, D.C, and raised in Westchester in Los Angeles, has always impressed friends as someone who makes dreams happen. While surfing the Pacific waves as a child, he used to admire homes along the oceanfront bluff. Now he has built one for himself.

As a teenager doing factory work, he imagined himself one day owning his own business. He got an MBA from USC, then a job as an acquisitions specialist for ICN Pharmaceuticals Inc. president Milan Panic.

He next joined other investors who turned a nursing home company into a publishing firm, then sold the publishing assets to ABC in 1977.

In 1981, he bought a Sylmar-based publishing company, later called Frames Data Inc., which provided information to ophthalmologists.

LeVasseur says the company’s earnings increased eighteenfold by 1991, when he sold to Thompson Corp., in Canada, and became wealthy enough to quit working.

*

He and Martin now both express a longing--not uncommon among successful business people--to give something back.

After selling his company, LeVasseur remembers feeling dissatisfied. “In terms of leaving something of some permanent nature, with the skills that I had, I was searching for something to grapple with.”

Adds Martin: “We’ve all seen individuals and companies give financial support to charities. What I find intriguing is a different kind of involvement, which is giving not just of your time, but really bringing your skills to try to make a difference.”

Both LeVasseur and Martin pass the acid test for nonprofit leadership these days. They can contribute--and, in Martin’s case, also raise--big bucks. Two years ago, with the Laguna museum teetering on bankruptcy, LeVasseur was one of three trustees who lent a total of $250,000 to keep the doors open, says a source close to the museum.

Martin, elected president of the proposed new museum, has fund-raising potential. His computerized Rolodex is filled with contacts made through the 90 corporate deals he’s handled over the years, Tokos Medical Corp., among others.

Last summer, as a board member of Homedco Group Inc., he represented the former home health care giant in talks with its Orange County rival, Abbey Healthcare Group Inc., which led to the creation of Apria Healthcare Group Inc., in Costa Mesa.

Martin personally guaranteed that he’ll plug any funding gaps in Newport Harbor’s pledge to erase a $300,000 working capital deficit before the merger goes forwards, sources say. When asked about his pledge, Martin said he expects other trustees and museum supporters will make considerable contributions.

What’s more, his wife Twyla last year raised $320,000 at the museum’s crucial Art of Dining fund-raiser at the Four Seasons Hotel, honoring sculptor Robert Graham. “This year, Twyla’s heading it again, and she’s expecting to even do better,” says Martin. “The most expensive table sold last year was $10,000, and this year there are already six $25,000 tables sold.”

Martin and LeVasseur first encountered each other as rivals at a Laguna art auction a year and a half ago. Martin, a collector, says the only piece he wanted was sculptor John Frame’s small study for a large public sculpture that never got built. “It was a dynamite piece,” says Martin, “and Gil bought it before I got to it.”

Martin, who collects California art, easily rattles off his favorite artists, noting painters David Hockney, Charles Arnoldi and the late Richard Diebenkorn, and others who are less well-known. The venture capitalist says, “I’m in a business which is high-risk. In art, I plunge on adventures that are not yet certified by the art community.” LeVasseur has a few works himself, including Frame’s sculpture in his living room, but says he isn’t a collector. (He confesses that he has such trouble remembering artists’ names that while struggling to recall his favorites during the interview, he jotted them down on his palm.)

Last summer, the two kicked off a relationship that later evolved into the merger proposal.

The Martins invited LeVasseur and his wife for a picnic on their property overlooking Emerald Bay, where the Martins are building a new home. Sitting on the bluff, after dinner, wine glasses in hand, Martin and LeVasseur shared ideas for putting their museums together.

They had plenty in common. Both had been on their boards a limited time--LeVasseur since April 1993, Martin since September 1994. Both saw the frail futures of their institutions in the terms of two business rivals who finally decide to quit competing and merge to survive.

Both museums faced rising competition for scarce funding, with the federal government and corporations cutting back on art grants, and individual donors feeling tapped out.

Negotiations grew serious when LeVasseur was elected president of the Laguna museum in August. “Gil and I informally picked this thing up and were moving on it,” says Martin. “The granting of authority came after the fact.” In November, the two men put their respective balance sheets together and were amazed at how things fit.

“It looked like, Wow!,” says LeVasseur.

*

Indeed, the economics looked so favorable that trustees on both sides were easily persuaded, and both boards approved the plan Feb. 27. But some key constituencies--museum professionals, prominent fund-raisers, and, of course, the Laguna residents--were left out of the loop. “The only people who’ve worked on this are the deal guys,” says one insider. Museum professionals say the deal might be farther along if Martin, LeVasseur and fellow trustees had focused more on the artistic and less on the business reasons.

“It’s chicken and egg,” says Dr. Hugh Davies, director of the Museum of Contemporary Art in San Diego. “The art has to come first, then the support follows.”

Once the proposed merger became public, Laguna residents cringed as the deal makers referred to their prized museum and its collection in business lingo. “[LeVasseur] called our collection ‘product’--that was shocking--and our museum ‘land mass,’ ” bristles Stuart Katz, a gallery owner.

Museum experts says mergers of nonprofit organizations should be undertaken with an inclusive, rather than exclusive, understanding of who’s involved.

Edward H. Able, executive director of the American Assn. of Museums in New York, says “There’s a sense of community in the ownership of those institutions. . . the members, the board, the community leaders, the visitors, the founders, a host of stakeholders.”

Insiders add that the deal makers mishandled some delicate personality matters involving certain dedicated volunteers--issues which can make or break a nonprofit.

One source said that when Naomi Vine, Laguna’s director, was designated director of the future museum, Newport Harbor trustees assumed they’d get to pick the president. They suggested their current president, James Selna.

Selna, a trustee from 1985 to 1993, had pressed for merger talks to proceed when he returned to the board as president in 1994. But word came back from the negotiating committee, led by LeVasseur and Martin and including two trustees from each museum, that Selna wouldn’t do, say sources close to the deal.

As LeVasseur tells it, he and Selna agreed that neither of them should be the president, that the new organization should get a fresh start under a new leader.

Newport then floated the name of Joan Beall, a highly regarded fund-raiser, longtime board member and former president, who Martin says brought him onto the board. Last year, Beall and her husband, Donald, the chairman and CEO of Rockwell International Corp., gave $500,000 to Newport Harbor’s building campaign. Yet, sources say negotiators wouldn’t go for Beall either.

The message? Only Martin would do. “That was almost an insult” to Beall, says one insider. “It was a mark of her class that she stuck with it, said she wasn’t going to resign, and that’s what kept it together.”

Selna says “There was a consensus on both sides that Chuck should be the leader” but refused to comment further. Martin and Beall wouldn’t comment.

It’s unclear, as yet, how the miscalculations of LeVasseur, Martin and their respective boards could hurt Orange County’s shot at the big time.

“This is as greedy and vain and complicated by other human emotions as any other merger. We aren’t immune,” adds the insider. “Like other mergers, if this one blows up, it’s most likely because of human error, not because the deal wasn’t there.”

Observers say the hard part still lies ahead. “They’ve got to create a dream and they’ve got to sell it to the people,” says Eli Broad, the co-founder and chairman of Sun-America Inc., the founder of Kaufman and Broad Home Corp., and the founding chairman of the Museum of Contemporary Art in Los Angeles, whose personal art collection has been valued at $100 million.

Martin and LeVasseur express strikingly similar motivations for getting involved in all this. Both say they have no interest in having their name etched on the museum edifice. LeVasseur, noting he’d like to model himself after Pablo Neruda in the film “Il Postino,” says, “That poet came into the lives of these people and then he left and those people were better for it.”

“Without fanfare, ceremony. Right?” Martin interjects.

“Yeah, that’s what I want to do.”