The Jersey City Independent "

The cash-strapped Jersey City Museum has been completely closed to the public since mid-December, but it remains unclear if the closure is temporary or permanent.

One trustee has assured JCI that the museum is closed only due to repairs that are being made inside the building, but other sources say the museum’s board remains in full-on scramble mode as it looks to stave off extinction and somehow safeguard the institution’s well-regarded permanent collection.

The full closure comes as the 110-year-old museum struggles under the weight of its own debt. Its financial problems led it to lay off its entire staff and close its doors for most days of the week in April, just a month after the city rejected a request to provide the museum with an emergency bridge loan. Later in 2010, as city officials accused the museum of misappropriating funds, it became clearer that the museum was having a hard time paying even its small bills.

Through it all, the museum’s leadership has continued to give the press — and, by extension, the arts community and taxpayers of Jersey City — the silent treatment, not responding to repeated requests from this and other news organizations to comment on its very public problems. This silence has spanned two board presidents: Nathan Sambul and now Ben Dineen.

But even though the museum isn’t speaking, others with knowledge of the situation are. Several sources have told JCI that the museum had recently fallen behind on utility payments. The institution allegedly owed so much to PSE&G that the utility cut the power off in December, the sources say. During this time, our calls to the museum were greeted only with busy signals, and the museum’s website simply read “Under Construction.”

A PSE&G representative could not confirm the shutoff, saying we’d have to get any account information from the museum. But without power, the Montgomery Street building would likely have lacked basic security and alarm systems, not to mention the sophisticated technologies required to keep the museum’s collection in top shape. It is not clear how long the power was cut off, but it has since been turned back on.

Jersey City officials asked JCI not to report on this detail when we first heard about it in December, citing fears that the museum could be robbed or vandalized if the information was made public (a request we honored). But as correspondence we obtained last week shows, the situation did lead the Healy administration to push the museum for answers about its collection — and its financial health.

“In light of the museum’s financial problems, we need an assurance that the collection is being protected pursuant to the terms of the contract between the museum and the city,” corporation counsel Bill Matsikoudis wrote in a January 10 letter to Dineen. The city’s top attorney then asked the board leader for a “full inventory/catalog” of the permanent collection, including information about where each piece was stored, as well as the museum’s “most recent financial report, including outstanding debt.”

Matsikoudis stressed that it was “important” the city receive the information by January 21. One day prior to that deadline, the museum responded with a rebuke written by board vice chair James Kobak flatly rejecting the city’s request for an inventory, saying “it will not be feasible and it is not reasonable” for the museum “to provide an inventory or inspection in the present circumstances.”

In the letter, which expressed surprise at the “city’s sudden professed interest” in protecting the collection, Kobak blamed the city, and the city alone, for the museum’s dire straits.

“The city is responsible for [the] ‘financial problems’ because of its failure to fulfill its financial commitments to the museum over the last year for [sic] longer,” he wrote. “During all that time, and much longer, the city has also shown no prior interest in, and taken no responsibility for, the condition of any part of the collections.”

The city, facing a fiscal crisis of its own, has pared back its funding of the museum over the past few years, cutting its annual allocation by 25 percent in 2010, from $625,000 to $500,000.

And then last fall, as the museum seemed to spiral out of control, the city decided to cease funding the institution altogether moving forward.

“I am not suggesting to the mayor or this council that we fund the Jersey City Museum,” business administrator Jack Kelly said in September. “It would not be prudent.”

The cuts in annual funding were coupled with the city’s refusal to provide the museum with a bridge loan, similar to the $2.5 million loan the city extended to the Liberty Science Center in late 2008, after an emergency City Hall meeting in March 2010.

“When basic city services are in jeopardy, it is beholden upon you to provide the city with an achievable museum-generated financial strategy for … keeping the museum doors open,” reads a March 1 letter from Healy aide Kevin Lyons to then-museum executive director Laurene Buckley. “We will continue to meet you half way, but we cannot endorse subsidizing any additional debt with tax revenue.”

The memo also outlined a number of ideas about how to pursue this strategy, and even included a draft letter asking for immediate emergency donations from the local corporate community, signed by both Healy and Buckley.

But Buckley soon left the museum, and shortly thereafter the board was overwhelmed by the task of closing the facility for most days, laying off the staff and catching up on back payments to employees who had been going without paychecks. City officials say that no one from the museum ever responded to Lyons’ letter.

But while the city cuts have been a hard pill to swallow for the museum (the city funding accounted for about half of the museum’s revenue in 2009), they fail to fully account for its money problems. In fact, the museum’s previous leadership had acknowledged the complexity of the situation to JCI reporters as early as November 2009.

“Our shortcoming has been relying on private funders, especially from the real estate and financial services industries, to underwrite our programs,” then-director of development Nancy Shannon said, acknowledging the fact that individual support had typically accounted for less than 5 percent of the museum’s revenues. “Now that the landscape has changed — perhaps for good — we need to make our individual supporters understand that we need to change, too, and ask them directly and often for their support.”

‘Plans for the Future’

In his letter, Kobak maintained that the museum is “developing plans for the future,” and is keeping “all parts of its collections in good condition” while once again blaming the city for the museum’s financial problems, saying this is being done “to the best of its ability given the situation in which the city has placed it.”

Thanks to a report in the Star-Ledger last week, we know that one of these “plans for the future” was a partnership with New Jersey City University. Though this idea was referenced as early as March 2010 in correspondence between city officials and museum leaders, it apparently fell through before it could become a reality.

Several sources tell us that another plan being worked on involves the museum unloading what got it into this debt mess in the first place — its Montgomery Street building. The museum moved into the building in 2001, taking on a reported $11 million debt in the process.

That debt was most recently refinanced by Sovereign Bank, through the New Jersey Economic Development Authority (EDA), in 2008. At that point, $2.7 million of debt was still on the books in a new 25-year fixed-rate loan that would be readjusted every 10 years, according to the EDA. Internal Revenue Service filings show that the overall liability on that loan grew by nearly $200,000 in fiscal years 2008 and 2009, ballooning to $2.98 million from $2.78 million.

With the museum falling behind on payments, sources say the museum is considering selling the building to the United Way of Hudson County, where Dineen works as the director of resource development and marketing. Under the plan, the nonprofit would then move its offices to Montgomery Street from Journal Square, and would lease part of the building out to the museum. Dineen and other United Way staffers did not return requests for comment.

Meanwhile, the museum has loaned some of its work to Hudson County for a show featuring works by African-American artists, but its doors remain closed. And while trustees continue to reference future plans, as Kobak did in his letter and as trustee Ofelia Garcia did in an email to JCI, details of those plans remain few and far between.

“Something very interesting is going to happen in late winter,” Garcia said in mid-December, “so you have to stay tuned.”

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