A study in black & red

In the waning days of 1999, Jeremy Strick sat at the round, black, wooden table that dominates his sixth-floor director’s office at the Museum of Contemporary Art in downtown Los Angeles and opened a letter stuffed with brilliant portents. The greeting from museum trustee Dallas Price bid him a happy new year and announced that she was giving MOCA $1 million per annum, no strings attached, for the coming 10 years -- the largest cash gift in MOCA’s history.

“It was a fantastic moment, a wonderful gesture because it was honoring past achievements and expressing confidence and enthusiasm for the future,” recalls Strick, who had been on the job less than six months when Price’s letter arrived.

But Strick, like many others who run major arts institutions, soon would see shining opportunities displaced by undesirable choices. The future quickly brought an economic bust that dumped MOCA and the rest of the arts world out of the go-go late ‘90s and into the uh-oh 2000s. For MOCA, a decade that began flush with cash and promise has turned into a rocky, extended ride through steep budget deficits and significant cutbacks. It also has brought considerable accomplishments, including an Andy Warhol retrospective that was the biggest blockbuster in the museum’s history, and a current, widely hailed exhibition of Minimalist art that has swelled MOCA’s already-strong reputation even as its staff and its operating budget have shrunk.

When that $10-million gift landed on Strick’s table, he and MOCA’s board already were planning ambitiously. Begun from scratch 25 years ago, and built largely through private donations of art and money, MOCA rose rapidly in a contemporary art world where a museum earns its cachet by looking back insightfully at the visual art of the last half of the 20th century, and seeing ahead presciently as it collects and shows work by artists its curators think will drive the conversation in the 21st. Thanks to the propitious stock market and a $25-million endowment campaign, MOCA, at the new century’s dawning, had $38 million in its investment portfolio to help back new initiatives.

But MOCA’s balance sheet bled red for three consecutive fiscal years beginning in 2000-01; annual operating losses averaged nearly $4 million during that time, according to the museum’s federal tax filings. The 2002 Warhol retrospective couldn’t stop the long slide into deficit, even though it set an attendance record and, museum officials say, more than earned back its $2.7-million cost.

As the museum marks its 25th anniversary, MOCA leaders expect to break even for the 2003-04 fiscal year, which ends Wednesday. But financially this is a much-reduced museum; its $13.2-million operating budget returns it to the spending level of six years ago. The investment portfolio, now valued between $22 million and $23 million, is down about 40% from where it stood before the stock bubble burst.

The overall economic picture for art museums has brightened somewhat from a few years ago, with many institutions now “cautiously optimistic” about the future, according to a recent survey by the New York-based Assn. of Art Museum Directors. While the outlook may no longer be as black as the Frank Stella canvases that greet visitors to MOCA’s current exhibition, “A Minimal Future?” -- a groundbreaking retrospective on the Minimalist movement of the 1950s and 1960s -- many experts still see plenty of unsettling gray. They sense a pervasive wariness in the field, a chastened feeling that augers against any return to the expansive late-’90s mood that gave rise to MOCA’s bid for rapid growth. And there are still bolts of bad news, such as the loss of 28 jobs this year because of a budget crisis at the venerable Museum of Fine Arts in Boston.

Rev up, cut back

Despite its stature in contemporary art circles, surveys done between 1998 and early 2000 showed that the public’s awareness of MOCA was, as Strick puts it, “less than we would have expected or hoped for,” when in 2000-01 the museum tripled its spending on advertising and marketing. The most visible manifestation of that $4-million splurge was a cheeky billboard campaign, designed by TBWA/Chiat/Day, Los Angeles, the advertising firm that gave the world the Energizer Bunny and the Taco Bell Chihuahua. Some in art circles were appalled, but attention was paid. “It was praised on the editorial page of the Los Angeles Times, and decried in the Calendar section,” Strick recalls with a muted chuckle.

The ad campaign was launched in January 2001, the same month MOCA expanded to include a new venue, a small gallery at the Pacific Design Center in West Hollywood. The satellite gallery is a risk-free proposition: All its expenses -- about $500,000 a year, including staff and operations -- are paid by the Design Center, a commercial enterprise, as a way of enhancing its prestige and allure, according to Charles Cohen, the Pacific Design Center’s owner and president. The arrangement gave MOCA a long-coveted Westside presence to go with its two large downtown facilities, the Geffen Contemporary in Little Tokyo, converted by Frank Gehry from a warehouse in 1983, and the Arata Isozaki-designed main museum building on Grand Avenue that opened in 1986. There were other bids for growth. Salaries and benefits rose to match industry standards and improve recruiting, says Strick, a Harvard-educated scholar who came to MOCA from the Art Institute of Chicago. New hires arrived to boost fundraising. More money was allotted to buying new works for the collection, with an increased emphasis on getting in on the ground floor with emerging artists. The annual operating budget rose 27% over two years, reaching from $15.4 million in 1998-99 to $19.6 million in 2000-01.

But in hindsight, Strick says, “the timing was spectacularly wrong” to be a museum on the go. After March 2000, the tech-fueled stock market sank like a down-scrolling computer cursor. Just as MOCA’s expenses were burgeoning, its investment cushion was shrinking. Already winnowed by the stock bust, the endowment dwindled further as museum leaders dipped into what remained for more than $8 million to cover a series of annual operating shortfalls, according to Thomas Unterman, who chairs the MOCA board’s finance committee. Even Price’s landmark gift looked shaky for a while: MOCA wrote it off as uncollectable in 2001 after the golf course management company that generated her wealth suffered setbacks. But the company was sold, according to Unterman, and those proceeds have enabled Price -- now remarried and known as Dallas Price-Van Breda -- to make all her scheduled payments.

MOCA leaders had to call off their marketing drive after a year. They resolved not to cancel any scheduled exhibitions -- a different tack from New York City’s Guggenheim Museum and Whitney Museum of American Art, which shed previously announced shows. They also persevered with a stepped-up, if relatively modest, art acquisition program, steadily raising annual spending on new works from $264,000 in 1999-2000 to $1 million in 2002-03.

MOCA laid off six employees in mid-2002, and further cuts through attrition have reduced the full-time staff in all departments from 108 before the layoffs to 93. A free shuttle service between the Grand Avenue building and the Geffen Contemporary was discontinued. And MOCA no longer could afford to keep art educators in the galleries full time to answer visitors’ questions and offer insights and information.

Last September, the museum began closing to the public two days a week -- Tuesdays and Wednesdays -- instead of one, although Strick says the reason was not to save money, but to block out one of those days for school groups. Education spending, which MOCA boosted to $836,000 when its finances appeared strongest, last year dipped to $642,000 -- about where it stood in the late 1990s.

By late 2002, MOCA was putting on fewer shows and extending many of those it did present far beyond the customary three months. Frugality meant culling more exhibitions from the permanent collection -- the art MOCA owns and can show at no extra cost. There were fewer of the sexier touring shows, which museums must pay to present. MOCA also cut back on the most prestigious but costly sort of museum work -- original shows that curators assemble by borrowing art from hither and yon, which must be packed, shipped and insured against damage or theft at considerable expense.

Such retrenchment was commonplace in a museum world under economic duress. “Some tectonic plates have shifted that make the long-term future a difficult one for museums,” says Phil Nowlen, head of the Los Angeles-based Getty Leadership Institute, which runs instructional programs for museum managers. The title of one of the institute’s recent programs was “Hard Times Are Over and Harder Times Lie Ahead.”

The challenge is to take risks for the sake of excellence, yet do it in a focused, prudent way, says Russell Willis Taylor, president of National Arts Strategies, a nonprofit group based in Washington, D.C., that offers managerial advice to arts organizations. “None of us in the arts will be remembered for our balanced budgets. We’ll be remembered for the great works we help produce. But nobody achieves their mission if they’re bankrupt.”

MOCA’s leaders see no risk of that; tough times may have tempered the museum, they say, but its finances are sound.

“This is an institution that could have become very vulnerable during the downturn, but maintained its programs and is coming out in very stable shape,” says Unterman, the board’s finance committee chairman. “There’s a fiscal discipline here that’s going to keep the ship on course.”

The chairman of MOCA’s board, auto sales executive Bob Tuttle, points to the board’s growth from 29 members in 2001 to the current roster of 40 as a healthy vital sign that heralds increased fundraising power and reflects a buzz about the museum’s accomplishments. Newer recruits include Creative Artists Agency partner Beth Swofford, television executives Jarl Mohn and Larry Sanitsky, and real estate and finance mogul Fred Sands. Another plus, Tuttle says, and proof that the 2001 ad blitz and 2002 Warhol blockbuster did not go for naught, is that museum memberships have surged from 12,400 early in 2002 to 17,000 today. Memberships, costing $65 and more per year (with discounted rates for students and artists), entitle the buyer to unlimited admissions and other perks while creating a core audience for the museum.

MOCA’s leaders do not envision a return to the $19-million-plus budgets they tried to sustain earlier in this decade, but they would like to boost spending to about $15 million a year in the near future. Then, when the time seems right, Tuttle says, the museum can embark on a campaign to replenish its endowment.

Still, there’s the nagging problem of dwindling attendance. The Warhol show lifted MOCA’s total draw of paid and free admissions to 380,000 in 2002, but it fell the following year to 240,000. In 1998 and 1999, the museum averaged more than 310,000 admissions, without benefit of a blockbuster. Strick points to increased competition for dwindling leisure time as the most severe obstacle to building attendance. He doesn’t see a steady diet of blockbusters as a realistic option for MOCA.

To him, a contemporary art museum is by nature more of a boutique that heralds new and challenging wares than a department store stocking established crowd-pleasers. The most popular shows at MOCA typically draw 70,000 to 100,000 visitors, Strick says. The Warhol retrospective, a once-in-20-years anomaly, attracted 195,000. The lure for a general audience lies more with famous-name masterpieces certified by time: Some 821,000 people saw the “Van Gogh’s Van Goghs” blockbuster at the Los Angeles County Museum of Art in 1998-99.

“We don’t change our programs to attract audience and drive the numbers up,” Strick says. “If you’re showing extraordinary works and showing them in ways that are revealing and compelling, you’re doing your job.”

Wins and losses

Barring a spike in attendance, MOCA’s contributors, many of them avid collectors of contemporary art, will have to keep carrying an unusually heavy load while hoping that L.A.’s dream of a downtown renaissance comes true and lifts all cultural boats. This year, donations, membership dues and fundraising events are expected to account for 93.5% of the museum’s revenues. In recent years, other income sources -- including bookstore profits, single-day admissions, fees for shows sent on tour and cash extracted from the endowment -- had supplied 20% to 35% of MOCA’s spending money.

Amid financial struggles, MOCA has birthed a creative triumph: “A Minimal Future?” is one of the most highly praised and written-about shows in the museum’s history. It would have been even better for MOCA’s reputation and bottom line if the exhibition were to tour after it closes Aug. 2 in L.A., but museum officials say they found no takers, given the show’s size (more than 150 works, many of them massive), the somewhat rarefied appeal of austere Minimalist art and the budget limitations of other interested museums.

Nevertheless, “It’s a beautiful show, and it has jacked them into a very noteworthy slot in the prestige parade,” says Selma Holo, who runs the USC Fisher Gallery and directs the university’s graduate program in museum studies.

For the rest of this year, MOCA will try to build on that momentum with offerings that include a touring exhibition of drawings by Ed Ruscha (originated by the Whitney), and a MOCA-organized retrospective of Robert Smithson, the artist who pioneered “earthworks” -- sculptures built across landscapes on a massive scale. A dollop of dead-celebrity appeal is in the offing next year in a traveling exhibition of paintings by the doomed 1980s artist Jean-Michel Basquiat. Chief curator Paul Schimmel also points toward 2006, when a planned, MOCA-originated show of Robert Rauschenberg’s “combine” pieces -- interweaving painting and sculpture -- will be an important thrust in the ongoing effort to keep up excitement.

The Minimalism show “has revived the museum at every level,” says Margo Leavin, a longtime L.A. gallery operator who thinks MOCA lost some of its art-first focus with the billboard campaign and the Warhol blockbuster. She sees the Smithson exhibition as a promising encore to “A Minimal Future?”

“It’s a very gutsy show to do, by a revered artist within the art world, who is not as well known to the general public. The challenge for the board is to be able to support all this.”

Mike Boehm can be contacted at calendar@latimes.com.