Guggenheim cancels $1 billion project

NEW YORK, Jan. 9 (UPI) -- The Guggenheim Museum has canceled plans to build a $1 billion museum for the display of post-World War II art on an East River site at the foot of Wall Street because of the current economic situation and has closed its main exhibition gallery in Las Vegas temporarily.

Thomas Krens, the Guggenheim's expansion-minded director, announced without fanfare in a three-paragraph e-mail message that plans to build the Frank Gehry-designed East River Guggenheim have been dropped. He has been under orders from the Solomon R. Guggenheim Foundation's chairman, Ohio insurance magnate Peter B. Lewis, to shape up or ship out since early last month.

"The Guggenheim project has to be rethought, perhaps on a more modest scale, and certainly in the context of the city's master plan for the development of Lower Manhattan," Krens said.

Lewis said he also was committed to developing a cultural project in Lower Manhattan as a part of its revitalization in the wake of the 9/11 terrorist attack but "on another scale and perhaps at another place." The museum, which looked like giant metal be-ribboned bon-bon box, had yet to be approved by all the necessary city agencies and faced opposition from some environmentalist groups.

The Guggenheim announcement came on the heels of a decision by the Los Angeles County Museum of Art's decision to shelve its $300 million expansion designed by Dutch architect Rem Koolhaas. Other museum expansion projects that appear to be stalled for lack of funds are those of the Boston Museum, Art Institute of Chicago, New York's Whitney Museum and the Jewish Museum in San Francisco.

The Guggenheim Foundation's Lewis publicly chastised Krens for his spendthrift ways in early December, and warned that his job was on the line. This resulted in the director's vow of fiscal responsibility beginning in 2003 with the aid of a $12 million donation from Lewis that will eliminate the deficit the museum accrued in 2002 and pay some of this year's expenses.

Krens said the Guggenheim will continue to operate its museums in Bilbao, Spain, Venice, and Berlin and go ahead with plans for a $250 million satellite museum in Rio de Janeiro with heavy support from Brazilian interests. It closed its satellite museum in Manhattan's SoHo district more than a year ago due to declining attendance.

The Guggenheim's flagship museum, the Frank Lloyd Wright building on upper Fifth Avenue, has been reduced to privately selling artworks, described as redundant or second rate, to replenish its endowment and make up for losses in ticket revenue sustained since the Twin Towers disaster. These art sales have been estimated to total at least $14 million to date.

The museum has had to reduce its staff by 43 percent in the past year and its opening hours have been reduced 16 percent. Attendance has dropped 20 percent from the 2001 figure and the operating deficit last year reached $6.7 million on a $57.7 million budget. The museum's endowment, $42 million, is far short of the $100 million it needs to support programs and staff, the museum admits..

Daily attendance at Guggenheim Las Vegas averaged 1,750 rather than 5,000 that was projected when the two Koolhaas-designed museum spaces at the Venetian Resort-Hotel-Casino opened two years ago. The main museum space has been closed for the next three months and a secondary space operated in partnership with the Hermitage Museum in St. Petersburg, Russia, will be showing a touring Norman Rockwell retrospective exhibition.

The East River museum was to have towered 40 stories above three supporting piers in the river and enclosed 200,000 feet of exhibition space, four time that of the uptown Guggenheim. New York City had pledged a contribution of $67.8 million in land and capital toward the project, but this pledge went down the drain along with many others in the greatly reduced city budget for the coming year.

There was one happy note in the litany of bad news from the Guggenheim. The museum said 6 percent of whatever moneys are added to the endowment will be spent on acquisition of new art, insuring that the museum's collection will remain a living one.