Corcoran Gallery’s lawyers conclude case for breakup but are strongly challenged


Lawyers for the Corcoran have made their case in court as to why the gallery and arts college cannot continue operating as they are but must be broken up and turned over to other institutions. (Nikki Kahn/The Washington Post)

After painting a grim portrait of a museum on the edge — empty coffers, emergency climate chillers in the courtyard, a backup power generator in the street, “combustible” student art-making equipment one floor below priceless works — lawyers for the Corcoran Gallery of Art on Tuesday rested their case in favor of a dramatic reorganization.

The one hope presented over two days of testimony was the controversial plan to give much of the art to the National Gallery of Art and turn over the Corcoran College of Art and Design to George Washington University.

“This partnership is a once-in-a-lifetime opportunity to create something truly powerful in the heart of the nation’s capital . . . a model of what arts education in the 21st century could be,” testified Steven Knapp, president of GWU.

However, the relentless cross-examination of the Corcoran’s witnesses by Andrew Tulumello, lawyer for the advocacy group Save the Corcoran, were a sign that approval of the plan may not come as easily as the three powerful arts and education partners once hoped. The Corcoran had been unopposed in the legal process of seeking approval for the plan — until Tulumello won standing last week for his clients to attempt to show that there is no need to break the Corcoran apart.

Still, the opponents face their own challenges: D.C. Superior Court Judge Robert Okun rejected a motion to rule immediately in their favor after the Corcoran presented its three witnesses. The opponents plan to call 10 witnesses in a proceeding that the judge said will now probably last into next week instead of wrapping up Thursday under the original schedule.

In many respects, the testimony and the cross-examination boiled down to a battle over numbers — budgets, fundraising, renovation estimates — and over how to interpret them.

Lauren Stack, the Corcoran’s chief operating officer and the first witness called by Corcoran lawyer Charles Patrizia, testified to the chronic gap between revenue and expenses. She said expenses have been running about $28 million to $30 million per year, while the art college brings in $13 million; other income generators such as weddings, special events and gift shop sales are good for $1.7 million; and fundraising has averaged about $3.8 million for several years (though closer to $3 million recently).

By that math, the deficit is about $10 million, and it is filled by one-time windfalls such as the sale of a parking lot a few years ago for about $20 million, Stack said.

But a $10 million deficit is the extreme case. Patrizia had her read from a 2011 consultant’s report that said the average annual shortfall has been $2 million to $4 million for years. The report also said the Corcoran has been struggling “to find a successful business model for 40 years or more.”

Moreover, if the Corcoran hadn’t been deferring so much essential maintenance on the historic building near the White House, the budget picture would be much worse, Stack said. Three art shows in recent years had to be cut short or interrupted because the climate controls or maintenance systems failed, she said.

Tulumello challenged the numbers and the math. Referring to a summary spread sheet submitted by the Corcoran, the lawyer had Stack read, year by year, what the bottom line would be for the past 10 years if the Corcoran’s accountants had not subtracted certain investment income.

“Six of the years for which you submitted data show surpluses,” Tulumello told Stack.

Patrizia countered that Tulumello’s accounting method misstates the Corcoran’s true operating condition.

Meanwhile, it fell to Stack to be the one who had to answer — under oath — the question that has festered since news broke in June 2012 that the Corcoran was considering selling its building and moving.

Was there ever a proposal to move the Corcoran to Alexandria? Patrizia asked her.

“No,” Stack said.

Knapp, GWU’s president and the Corcoran’s second witness, disclosed for the first time that the university plans to spend $80 million to renovate the Corcoran. That includes $25 million immediately — if the deal closes — on the sort of urgent problems with the climate-control and mechanical systems that Stack cited.

Tulumello drew from Knapp that $35 million of that money will come from the Corcoran’s own cash on hand.

The Corcoran’s last witness, a fundraising consultant named Sean O’Connor, of the Development Guild firm, testified that starting in 2012, he tried to give the gallery’s staff tips on how to raise money. He considered it a success that they met their goal of $3.1 million in 2013 but was skeptical that the Corcoran could raise $100 million, or even $10 million, without the big donors who have eluded the institution for years.

Such an assessment could suggest that the Corcoran has no other choice but to turn to well-funded partners, such as GWU and the National Gallery. Yet Tulumello sought to use the same facts to suggest that the Corcoran for years has failed to do adequate fundraising.

David Montgomery joined The Washington Post in 1993. He writes general features, profiles and arts stories for the Sunday Magazine and Style, including pieces on the Latino community and Latino arts.
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