Cash-strapped city gives its art museum $2 million

Published on August 7, 2013 in Asheville, City - County Gov., News Stories, Roger McCredie

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By Roger McCredie –

Item 194 in the oral history collection at UNCA’s D. Hiden Ramsay Library is a 90-minute cassette tape of personal recollections of Asheville by one Kenneth B. Michalove.

Michalove was born in the original Dogwood Mission hospital in 1938 – the year that Thomas Wolfe died – of a family that had been a pillar of Asheville’s Jewish community and actively involved in city affairs for generations. On his tape, Michalove recalls spending Saturdays in his grandfather’s china and silver shop next to Leo Finklestein’s legendary pawn shop. He would go on to attend college up north, then return home in the racially turbulent Sixties to work for Opportunity Corporation, and then, in the family tradition, would become a successful businessman in his own right before serving as both mayor and long-time city manager of the town that had nurtured his family and vice versa.

In December of 2011 Michalove was retained as a management consultant to help Pack Place, Asheville’s arts and cultural center, work through some internal “issues.” The consensus was that few people on the planet knew as much as Michalove about how Asheville city entities interact – or are supposed to.

So it was more than a little sensational when, at the regular Council meeting on June 26, 2013, Ken Michalove stood up, announced that he had just resigned his consultant’s position in order to speak freely, and then delivered himself of an indictment of Pack Place operations, especially with regard to its tenant the Asheville Art Museum.

The focus of Michalove’s remarks was the city’s active involvement in the art museum’s ambitious expansion plan, including (1) the drafting of new and separate lease agreements, one for the museum alone and the other for Pack Place’s other two tenants, Diana Wortham Theatre and the Colburn Earth Science Museum; and (2) a 2014 city budget allocation of $2 million worth of taxpayer money as a contribution to the art museum’s fundraising drive for construction of a much larger facility onsite.

The dual-lease setup, Michalove said, “is a path to destroying this institution [Pack Place],” by creating a tail-that-wags-the-dog situation at what was always intended to be a center that offered a multifaceted but balanced cultural resource. As for the city’s financial support, Michalove indicated that he was less concerned about the actual dollar amount than that, even as a consultant for Pack Place, he had been unable to learn just how much money the art museum was attempting to raise. There was, he charged, a cloak of secrecy surrounding the project that had created “an atmosphere of distrust towards the … Museum.” He added that “There is not a good feeling of free flowing and honest information sharing. Has [City] Council given the board members and executives of [the other Pack Place tenants] the same private audience … about what has been going on as Council has given the Asheville Art Museum? Has Council done its own fact finding and homework?”

According to Michalove, the art museum has threatened to secede from the Pack Place union “if they don’t get their way. If that is their desire there are numerous education, arts and science non-profits that would love to have this ‘free rent’ prime real estate in downtown Asheville … My estimate of the market value of the Art Museum space is in the million dollar a year [rent] range,” he said.

Following his Council meeting barrage, Michalove opened fire on art museum executive director Pam Myers in a letter that demanded information about the nature and scope of the museum’s fundraising. “Exactly what is the [museum’s] total capital fund drive?” he asked Myers. “I have heard anywhere from $15 million to $24 million. He noted that in a July 2 interview with the Asheville Citizen-Times Myers had “declined to say how much money had been raised from public and private sources.”

“Why so secretive?” Michalove asked Myers, “Unless … minimal support to date, misplaced priorities, misinformation and defaults are an embarrassment to you and the Art Museum board.” Michalove was alleging performance defaults on a grant awarded to the museum by the Tourism Development Authority (TDA). “TDA has held $1.5 million for the [museum] for over 6 years. And, by your admission in the [Citizen-Times] July 2 article you will not be able to meet the January 31, 2014 TDA Grant deadline and the Art Museum will be in default for the third time. Unfortunately … this TDA money could have been used for viable economic development projects that would create jobs and room nights. The Asheville Art Museum does not have a viable project, just a lot of empty promises.

“It appears that you and the Asheville Art Museum Board of Trustees are involved in a hoax regarding this new building idea,” Michalove concluded.

A ‘Ruckus’

Michalove appeared again at Council’s July 23 meeting, this time armed with a six-page memorandum which he distributed to members. He caused what Asheville’s Mountain Xpress called “a brief ruckus” by asserting that Vice Mayor Esther Manheimer and Councilman Marc Hunt, as well as City Manager Gary Jackson, had acted unethically by supporting Council’s $2 million contribution to the art museum’s project. Manheimer and Jackson, he said, should have recused themselves because they are personal friends of Myers and the Van Winkle Law Firm, where Manheimer practices, once represented the museum. He said that Hunt, who is Council representative on the board of Pack Place, “has apparently acted [in that capacity] as if he represented City Council’s policy decisions.” An examination of the city’s Code of Ethics, however, seemed to indicate that Michalove’s allegations, if factual, would still not constitute conflicts of interest.

“My mom goes to [Myers’] holiday party along with half of Asheville but I’ve never been,” Manheimer said.

Hunt and Manheimer were the only council members to respond to an e-mail from the Tribune asking for comment on the appropriateness of a $2 million allocation to the art museum in the city’s present financial condition, and also on the reasoning behind drafting separate leases for the art museum and the other tenants.

In her reply, Manheimer said that since Pack Place itself is a city-owned building, the city is responsible for maintaining it. The museum project, she said, will “enhance and rehabilitate a building in need of repair,” that it is “appropriate for, and arguably the responsibility of, the city” to contribute to the building’s improvement, and that “a contribution amounting to 10% of the total cost is within reason.” She did not mention to what extent the building needs repairing, nor what benefits the other tenants would realize from moneys earmarked specifically for the art museum’s enhancement. “Diana Wortham and the Colburn are not conducting capital campaigns and have not requested specific capital contributions for the city.” Manheimer did not indicate whether, or to what extent, the city would support the other tenants in a similar manner if asked to do so.

Manheimer also said, “I support a strong Pack Place” and that “The lease arrangements of the partners in the building will not impact the viability of Pack Place.” She did not, however, address the rationale behind the drawing of separate leases in the first place.

Councilman Hunt also said he sees the city’s museum contribution as “more an investment in impropving a public building … so that it can be optimized for public benefit and certainly not an effort to bolster one nonprofit over others.” In language remarkably similar to Manheimer’s he added that “Other occupants are not expanding their space [and] they do not have capital fundraising drives underway.”

Hunt pointed out that the art museum’s direct lease arrangement with the city was voted on and approved at the Pack Place Board’s February meeting, and he insisted that “All occupants benefit from the publicly-subsidized space … in the same way.”

Hunt attached to his reply a copy of the City’s $112 million five-year capital plan, saying it shows that “other compelling needs are being addressed as well.

“Is the Art museum the most important of these needs? No, far from it,” Hunt said. “Is it a worthwhile public investment in the context of our overall community investment plans? Yes.

“The Pack Place [not Art Museum] investment is less than 2%” of the $112 million five-year plan,” Hunt said. He did not mention that it is also 33 1/3% of the $6 million shortfall revealed by Council in April, when Mayor Terry Bellamy announced she would be undertaking a 24-day program of fasting and prayer in search of a solution.

“Council made the difficult decision to raise property taxes so that numerous operational and capital needs of the City could be met,” Hunt stated.

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