L.A.’S MOCA IN DEEP FINANCIAL TROUBLE

Los Angeles’ prestigious but chronically underfunded Museum of Contemporary Art has fallen into crisis. Museum Director Jeremy Strick said MOCA is seeking large cash infusions from donors, and this week he did not rule out the possibility of merging with another institution or sharing its collection of almost 6,000 artworks.

Federal tax returns show that even before the current national crisis, MOCA had been draining its reserves to pay operating expenses. In the meantime, the museum’s staff has grown.

Unlike the Los Angeles County Museum of Art, which is partly controlled by the county, MOCA receives minimal government funding. Its annual budget has grown to exceed $20 million, but it relies on donors to pay about 80% of its expenses. When the gifts have fallen short, as they have more often than not during Strick’s nine-year tenure, the museum has gone into its savings.

In recent years, the museum has averaged 250,000 visits annually to view critically acclaimed exhibitions and a collection boasting works by such post-World War II masters as Jackson Pollock, Robert Rauschenberg and Mark Rothko.

By one important measure -- “unrestricted assets,” money that can be used for any purpose -- MOCA is in dire straits. Its federal tax returns show that early in this decade the museum had spent all $20 million of its unrestricted funds to meet routine operating costs. By mid-2007, it had borrowed an additional $7.5 million from “restricted” accounts, even though those are designated by donors for specific uses, such as education or buying art.

In an interview this week, Strick would not disclose more recent financial figures. But he acknowledged that the national economic crisis had further flattened the museum’s cushion. MOCA’s investment portfolio was worth $20.4 million in mid-2007, down from $36.2 million in mid-2000.

Most investment portfolios have lost significant value this fall.

However, the number of museum employees, including part-timers, has risen from about 150 early in this decade to about 200 in recent years. Strick said that was due to increased educational programs and the addition of a curatorial department for architecture and design.

This month, in a bid to shave 10% off operating costs, the museum announced a six-month closure of its Geffen Contemporary exhibition space, which is leased from the city for $1 a year. So far there have been no staff cuts as MOCA continues operating at the main Grand Avenue museum, whose $23-million cost was paid by the developers of the California Plaza in exchange for the right to use the rest of an 11-acre parcel of city redevelopment land.

Strick said MOCA must sharply accelerate its fundraising to ensure its continuing health. The director planned to meet with MOCA’s Board of Trustees this afternoon to discuss a range of options. He said talks were proceeding “with a number of potential partners about a variety of arrangements,” but he insisted that a dissolution or takeover of MOCA by another institution was not an option.

“All the possibilities being explored involve MOCA retaining its identity, continuing its program, expanding its collection,” he said. But he added: “I think it is time for this city to step forward and offer the kind of financial support commensurate with the work being done.”

Eli Broad, L.A.’s preeminent arts patron, said Tuesday that he had had “very preliminary discussions” with MOCA leaders about helping via his Broad Art Foundation. “MOCA is very important to the city,” he said. “I hope they figure out a way to remain independent and continue their important exhibition program, which has brought a lot of respect to Los Angeles.”

Last month Broad, who was also a key figure in launching MOCA as its initial chairman from 1979 to 1984, approached the city of Beverly Hills about his desire to build a new museum and foundation offices there.

Since its inception, MOCA has grown to encompass three exhibition spaces. The “Temporary Contemporary,” later renamed the Geffen Contemporary, opened in 1983 in a warehouse at the edge of Little Tokyo that had been revamped by architect Frank Gehry. Three years later, the museum’s permanent home, designed by Japanese architect Arata Isozaki, opened on Grand Avenue, where it is a mainstay of the planned redesign of the area known as the Grand Avenue project. In 2000, MOCA acquired an exhibition space at the Pacific Design Center in West Hollywood.

Before the national economic crisis hit, Strick said, MOCA was gearing up gradually for its first major endowment campaign since the mid-1990s, when it raised $25 million. Now, he said, there’s no time for that, and the focus is on “immediate issues and how to move ahead in a very different world.”

An irony of MOCA’s plight is that, thanks to the appetite of wealthy international collectors, the market value of its prime pieces has soared. Corporations and individuals routinely sell sculptures and paintings in an economic pinch, but a museum that did so would be violating its reason for existing, which is keeping art in the public domain. The codes of ethics of both the American Assn. of Museums and the Assn. of Art Museum Directors, although not legally binding, specify that the only acceptable reason for selling artworks from a public collection is to raise money for buying other, presumably more desirable, pieces.

Strick said it’s not unusual for business-minded members of any museum board to ask about selling art to relieve a cash crunch. But the unchanging answer, he said, is that it can’t be done because “our mission is preserving and protecting this collection.”

For Selma Holo, director of USC’s Fisher Museum and the university’s International Museum Institute, troubles like MOCA’s underscore how cultural philanthropy in Los Angeles continues to lag.

Philanthropists in Chicago, San Francisco and Boston have “a clear understanding” that the health of a city’s museums reflects on the state of the city as a whole, Holo said. But “L.A. still has a long way to go” for a similar conviction to take hold among its economic elite. What’s needed is for art collectors to put “the sustainable success of their museums before the ongoing development of their personal collections.”

Is MOCA’s peril a decisive moment for L.A. art philanthropy?

“I don’t know if we can say, ‘Put up or shut up, now or never,’ ” Holo said. “Maybe those were questions that had to be asked before the financial crisis. It’s a hard time to be making the ask.”

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mike.boehm@latimes.com