When Corcoran’s partnership didn’t work out as hoped, thoughts turned to a takeover

In the end, two of the Washington region’s most prestigious institutions — the University of Maryland and the Corcoran Gallery of Art — each felt a bit ill-used by the other. And two others — George Washington University and the National Gallery of Art — swooped in to feast on the pieces of a courtship gone bad.

The aftermath of last week’s announcement that the Corcoran would split like an atom and give itself away to GWU and that fancier gallery on the Mall — and leave Maryland dumbstruck — brings no tantrums or overt gloating. The private after-action reports in College Park and on 17th Street NW run more to sentiments like, How did that happen? Were we even speaking the same language?

The Corcoran’s surprise spurning of Maryland stunned Terrapin boosters and Corcoran advocates alike. Only a tight circle of top officials at each institution knew that more than one deal was in play. Previous talks with GWU and the National Gallery had gone nowhere. Maryland had emerged as the apparent savior of Washington’s oldest private art gallery and art school, following Corcoran trustees’ urgent five-year search for a financially stable future. Maryland President Wallace Lohlearned that the prize would not be his only hours before Corcoran told the world.

“I was highly impressed and very much looking forward to the outcome that Maryland was going to have with the Corcoran,” said Maryland Del. Jon S. Cardin (D-Baltimore County), who discussed prospects with Loh in Annapolis several weeks ago. “I was in­cred­ibly surprised when just a few weeks later” the rival agreement was announced. “I am tremendously disappointed.”

It all began with high hopes and warm feelings in April — a “marriage” proposal between the financially struggling Corcoran and culturally ambitious University of Maryland. After seven months of exclusive dating, two more generous suitors secretly beckoned in December.

Maryland made its best and final offer on Feb. 5: It would commit at least $46 million to a partnership with the Corcoran, divided between operating cash to ease the Corcoran’s chronic deficits and a capital injection to help renovate the Beaux Arts landmark near the White House, which is estimated to need more than $100 million in repairs. The flagship state university also would share responsibility for operating the Corcoran College of Art & Design, and it would marshall its prodigious fundraising machine — which keeps score by the billion — to reanimate the Corcoran’s feeble ability to solicit money.

A critical concern of Corcoran negotiators was that much of the Maryland financial aid was to be structured as loans. Under worst-case scenarios, those loans would have to be repaid, potentially leaving the Corcoran back in the fiscal lurch where it started. Maryland negotiators also placed more faith in fundraising to provide additional support. Corcoran veterans know their institution has been unable to attract sufficient donations for generations.

In comparison, George Washington University and the National Gallery bid narrow and simple, with joint proposals tailored to each institution’s forte: GWU would take complete responsibility for the college and assume ownership of the building — including the duty to renovate it. University officials have not disclosed how much GWU will spend. President Steven Knapp said the renovation could be done for less than previous estimates, since the new configuration would have less museum-quality exhibition space. The Corcoran also would contribute a smaller amount, to be determined.

The National Gallery would acquire, at no cost, a large fraction of the Corcoran’s 17,000 pieces of art — and the charge to store and care for it. The publicly subsidized gallery also would mount exhibitions of modern and contemporary work in the historic building under the name Corcoran Contemporary, National Gallery of Art, with free admission.

All that got the Corcoran’s attention.

“Because the National Gallery and the George Washington proposal was financially stronger and had fewer risks over the near and long term, the Corcoran board made the determination to take their proposal,” said a knowledgable source, who, like most interviewed for this story, requested anonymity to preserve a cordial relationship among the institutions.

“In the end, not all courtships are destined to end in marriage,” Loh said in a statement last week. “We wish the NGA and GWU well as they keep alive the venerable name and legacy of the Corcoran.”

Corcoran officials informed top Maryland officials and university lawyers in December that they would begin to talk to other potential partners — while still negotiating with the university — since the exclusive memorandum of understanding signed with Maryland in April had expired in September. Within the Corcoran, the renewed outreach to GWU and the National Gallery was known only to the trustees and a handful of executives.

For Maryland, the outcome represents the faltering of a prestigious step in a strategy to become a greater cultural force in the region. A deep collaboration with the Corcoran would have afforded “access to a landmark building across from the White House, to magnify our presence in the nation’s capital,” Loh said in his statement.

For the Corcoran, saying no to Maryland means forgoing what may have been the 145-year-old gallery’s and art college’s last chance to survive united, with partial autonomy in a relationship with a much larger partner. Unlike Maryland, neither GWU nor the National Gallery alone would agree to embrace both the Corcoran gallery and college, with all their budget problems and need for more space. Instead, under the new agreement, the Corcoran college and gallery would be split between GWU and the National Gallery — albeit largely in the same historic building — with management authority transferred to the new partners. (The transaction is subject to signing detailed documents by early April.)

“They are carrying on the legacy of the Corcoran in exactly the same way we would have wanted to carry it on, had we had the ability and the financial resources to do so,” Peggy Loar, the Corcoran’s interim director and president, said last week.

The Corcoran would continue to exist in name upon gallery labels and GWU art diplomas. It would carry on as a much smaller nonprofit organization devoted to art, while portions of its collection — which includes such gems as “The Dance Class” by Degas, “George Washington” by Gilbert Stuart and “Niagara” by Frederic Edwin Church — would be distributed to other galleries in Washington or across the country.

Closing a deal was a top priority for all. Loh, Knapp and National Gallery director Earl A. “Rusty” Powell III each made their pitches in early February to the Corcoran’s trustees.

Ultimately, the outcome turned on money, risk and control.

In April, the Corcoran and Maryland seemed to have embarked on a beautiful friendship. The day after the memorandum of understanding was announced, Loh toured an exhibit of student thesis projects in the gallery. He posed for pictures in front of works he admired and tweeted his high hopes:

“Spent a wonderful morning w/the Corcoran community. Loved seeing the students’ creativity at the NEXT exhibition!”

Over the spring and summer, both sides plunged into working out the details with gusto. Maryland administrators worked out of the Corcoran to help with planning.

But when it came time for Maryland to put financial details on paper in late fall, the Corcoran side was disappointed. Was this a polite blow-off?

“I really thought maybe they [Maryland] didn’t want the arrangement, and they wanted to let us down gently,” said a person familiar with the talks.

Yet Maryland negotiators insisted that their intentions were good, and the disappointment ran both ways.

“It seemed to us they [the Corcoran] wanted a partnership in the beginning, and in the end, they wanted a takeover,” said another source.

Even now, with the decision made, some facts about the negotiations remain in dispute.

The Maryland side offered less money than had been discussed in the spring, and it was all loans, according to some sources. The operating subsidy would not have equaled deficits in recent years; the renovation subsidy was a fraction of the estimated cost; and, in the meantime, the Corcoran would have been required to make annual, ­multimillion-dollar contributions from its shaky resources.

Another source countered that although many ideas had been in the air in the spring, no promises were made then. The operating money was to be granted, not loaned; the renovation money would have to be repaid only in unlikely circumstances; and the requirement that the Corcoran pay any fixed annual amounts was removed at the final pitch meeting, said the source.

As for the art college, Maryland was unwilling to assume full responsibility for its operations and the cost of needed expansion. Instead, Maryland wanted “a true partnership” with “shared ­decision-making and shared responsibilities for co-management” of both the college and the gallery, Loh said in his statement.

In fact, a shared responsibility is more in line with Corcoran’s leaders’ public statements back in April. They insisted then that “it’s not a merger, nor is it a takeover.”

Now, however, Corcoran leaders’ attitude has changed, as they prepare to let GWU take over the college and the National Gallery to adopt the collection.

Key details remain to be worked out.

The Corcoran, ironically, is sitting on a tidy recent cash windfall — including the $10 million settlement from the Huguette Clark estate last fall and proceeds from the auction of Persian rugs for more than $40 million last June. It is unclear how much Corcoran cash GWU will claim to help renovate the building.

The Corcoran will survive as a smaller nonprofit entity and may keep some of that money to fund its mission “dedicated to art and encouraging American genius,” even without the gallery and the school.

The Corcoran also will seek to be released from its founding purpose as a gallery — chartered by financier and philanthropist William Wilson Corcoran in 1869 and now to be redefined in 2014.

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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