United Way Backs Away from Jersey City Museum Purchase; Foreclosure is ‘Imminent’

The United Way of Hudson County no longer plans to purchase the Jersey City Museum building and the museum’s Montgomery Street headquarters is facing “imminent” foreclosure by Sovereign Bank, according to a memo obtained by JCI. In addition, two of the museum’s board members have resigned in recent months as a result of the turmoil.

According to the memo, sent last week by corporation counsel Bill Matsikoudis to museum board members James Kobak and Mark Rodrick, “the planned sale to United Way has been aborted and foreclosure by Sovereign Bank is imminent.”

Though the deal between the two nonprofits was said to be in “the final stages” last month when the city authorized awarding the United Way $212,415 in federal funds towards the purchase of the museum building, since then it has fallen apart and the museum is once again scrambling to stave off foreclosure, according to several sources. (The federal funds will not be awarded if the building purchase does not occur.)

“The United Way deal is dead,” one City Hall source says. The reasons why remain unclear, and when reached Thursday, United Way president Dan Altilio declined to comment.

But regardless of how the deal fell apart, if the museum cannot get out from underneath the crippling debt of its building, the prospects for its survival look bleak. The museum moved into the building in 2001, taking on a reported $11 million debt in the process. Previously, it was housed within the main branch of the Jersey City Free Public Library.

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.

In other words, the debt was growing faster than the museum could pay it down, a situation that has likely been compounded by the fact that the museum has had no revenue-generating programming or events for the last year (save for last summer’s successful mini-golf fundraiser spearheaded by developers Eric and Paul Silverman).

Meanwhile two of the museum’s 12 board members, including its secretary, have resigned in recent months, according to Jersey City officials, who found out only when they sent a memo to each listed board member and the two responded by saying they had already quit.

Secretary Michael Royce, who is the executive director of the New York Foundation for the Arts, and John Bell, who works for Bank of America, have left the board.

The ongoing problems with the museum continue to have Cultural Affairs staffers and administration officials concerned, and the city is continuing to press museum leadership for a full accounting of the permanent collection — a request first made in early January that has still not been fulfilled.

City spokesperson Jennifer Morrill says the museum met with several city officials at the Montgomery Street headquarters earlier this month.

“City officials were able to confirm that the building is secure, utilities are on, and part of the collection was viewed,” she says. But with foreclosure bearing down, city officials are looking to take control in order to protect the work in the permanent collection. In his memo, which was sent after the meeting, Matsikoudis once again addressed the need for the city to have a full inventory of the museum’s works.

“We are demanding that the museum provide the city with an accurate inventory of all art work that is within the possession of the museum,” he wrote. “The city of Jersey City will be making arrangements for the temporary storage of this art work. Please confirm that the museum will cooperate with the city in its endeavor to acquire this art work, which is now in jeopardy due to the museum’s precarious financial state.”

Morrill says a meeting is scheduled for next week “so the city can continue its discussions with representatives of the museum.”

Jon Whiten

co-founded the Jersey City Independent. He is currently the Deputy Director of New Jersey Policy Perspective.

  • http://pulse.yahoo.com/_ARMDS3EYX46K2BZC6GRRCNCUEI Riaz W

    I was under the impression that City gave around $200k to fix the air conditioning/HVAC from CDBG… Fulop questioned that… who get this money now? Library should seek this money to fix their elevator in main library!

    • http://www.jerseycityindependent.com Jon Whiten

      Riaz: You are correct. The CDBG $ was contingent on the building purchase, so that money will be available. We’re not sure if there are already plans on how to re-allocate it.

    • http://www.facebook.com/rutiglianoe Eugene Rutigliano

      Interested in how the city wants to take control here. The council considered funding the museum to be imprudent. How much of the collection will the city be looking to acquire? Is there a way in which the museum could be reincorporated into the library?

  • Anonymous

    I believe that if we lose the facility, efforts should be make to keep the collection intact. its value is as a whole, not as individual pieces.

  • Anonymous

    The Historic Jersey City & Harsimus Memorial Park would be delighted to house and exhibit some of the historic artifacts in the Historic Gatekeeper House Gallery. Would be our absolute pleasure to help.

  • http://www.google.com/profiles/jpifer Jayson

    Given the hesitation to account for what exists, it suggests that pieces are “missing”.

    • http://pulse.yahoo.com/_ARMDS3EYX46K2BZC6GRRCNCUEI Riaz W

      Charlene Burke (wblpnc) did request few months back in a council meeting to take the inventory, I am not sure about the status!

  • Anonymous

    United Way will buy it from Sovereign Bank after the bank forecloses on it

  • Anonymous

    The $200,000 for HVAC upgrades is already on it’s way into tall drink glasses with little umbrellas for the people who received it. After all, this IS Jersey City, you know?
    The building looks like it is in the process of being lost to foreclosure.SO let it go….Let the bank take it and choke on it….SAVE the Museum and the collection and solve the funding of the library branches at the same time by distributing the collection over the branches of the Jersey City Library.ALL of the branches.You then have a “Library Museum Tour”
    Split the funding of the collection with the branches of the library and you have solved 2 problems.As the article mentions, the collection was originally housed in the main branch of the library anyway.
    But of course I will be told that I don’t understand politics, appropriation of monies, municipal funding, hogwash, payoffs, or whatever else this nonsense is being called these days.

  • http://www.google.com/profiles/jpifer Jayson

    I propose we take pictures of the building and its collection to start a Jersey City Museum Museum to help document the failures of our museums.