MOCA Budget Falls Victim To Biggest Donor’s Distress
By DEBORAH BELGUM
Staff Reporter
The financial troubles of a major donor have strained the operating budget of the Los Angeles Museum of Contemporary Art, at a time when the downtown institution already has taken a gamble by bringing in the Andy Warhol exhibit.
The museum’s failure to receive $6.9 million remaining from a $10 million donation pledged by art patron and socialite Dallas Price would cost it about $1 million a year for the next seven years.
Price, a MOCA trustee, is co-owner with her ex-husband, golf-course magnate David Price, of American Golf Corp., based in Santa Monica. In early 2000, she pledged $10 million to the art facility, to be made in annual $1 million installments. It was the single largest donation in the museum’s history and had been earmarked for operations and endowment.
However, Price told museum executives she would be unable to make any future payments on her donation until the golf company recovered from its fiscal woes, sources said.
Tax documents filed by the museum show that it has written off $6.9 million pledged from a large, unidentified donor. Museum officials wouldn’t reveal the name, but sources confirmed it as Price.
When contacted at her Santa Monica home, which has a personal art gallery attached to it, Price declined to discuss her financial problems or the museum donation. “I have no comment to make,” she said.
Audrey Irmas, another MOCA patron and vice chair of the board of trustees, said the unfilled donation came from a long-time supporter and board member.
“It is from a very highly respected trustee whose business has had problems, and this person hopes next year to continue on with the commitment,” she said.
The last payment on the donation was at the end of 2001, said Jack Wiant, the museum’s chief financial officer.
Pledge to make good
While Price has emphasized to MOCA trustees that she will make good on her pledge, museum officials aren’t counting on receiving the rest of it if American Golf doesn’t resolve its huge debt problems. “It might be collectible and it might not,” Wiant said.
Price, an avid athlete in her late 60s who has completed six marathons and is an accomplished mountain climber, was divorced from David Price in 1998.
However, their finances remain intertwined. The couple divvied up most of its holdings 50-50 in privately held American Golf, a golf course operator, and a related, publicly held company, National Golf Properties Inc. National Golf is the landlord to many of the golf courses that American Golf runs. Both companies have fallen on hard times, and outside directors of National Golf are pursuing a merger of the two and seeking an equity infusion that they consider necessary to save the companies.
Dallas Price owns interests in National Golf and an affiliated partnership now valued at $28.9 million, down from about $85 million a year ago.
The Prices also control a dominant interest in American Golf, but its value is undetermined. It is under a heavy debt burden, partly as a result of loans made to the Prices. Liabilities of $328.6 million outweighed its assets by $58.5 million at the end of 2001. The Prices borrowed $29 million from American Golf in 1996; as of the end of 2001, loans the company made to the Prices and entities they control totaled $62.3 million.
Based on Securities and Exchange Commission filings, it appears that the pledge made to MOCA is funded by securities placed into a trust whose sole trustee is David Price. The Dallas P. Price Charitable Lead Trust #1 benefiting MOCA owns partnership units representing the equivalent 405,882 National Golf shares. At last June’s values of about $25 each, those units were worth $10.1 million; now they’re worth about $3.4 million.
The annual dividend yield on those units was $750,000, before the partnership suspended its dividends early this year.
Bad timing
The Prices’ financial woes could not come at a worst time for MOCA.
Like all non-profit groups that rely on the generosity of benefactors and corporate sponsors, times have been tough. While donations and contributions were down $6.6 million in fiscal 2001 over a year earlier, the museum’s endowment fund which in the past has accounted for up to 20 percent of its operating budget isn’t contributing anything due to the down stock market. “It’s flat,” Wiant said.
During the year ended June 30, 2001, the museum had a $4.2 million deficit. That deficit was covered by MOCA’s reserve funds, Wiant said.
In the just-ended fiscal year, the museum whittled $2 million off its $15 million operating budget by not filling several positions and reducing other costs. Yet it still expects to have a $1 million deficit, in spite of Price’s last donation. “We’ve had to look at everything, every type of expense, every advertising cost and promotion,” Wiant said.
Adding to the uncertainty is the Warhol exhibit.
Last year, the museum’s director, Jeremy Strick, and other MOCA officials decided to spend $3 million to bring the exhibition from Europe to Los Angeles for an exclusive three-month summer visit.
“Consequently the budget ended up going back up $3 million,” Wiant said. “Our board talked at great length about taking on the risk of the exhibition and the responsibility of it. We decided it was an important thing to do.”
Through individual and corporate donations, the museum raised slightly more than $2 million to fund the Warhol retrospective and is looking to make up the remaining $1 million through admissions, new memberships and museum sales. Reaching breakeven depends on hitting a goal of 150,000 paid visitors by the end of the exhibition’s run in August.
As of last week, more than 59,000 people visited the Warhol exhibit, said museum spokeswoman Katherine Lee. There also have been 3,000 new memberships, ranging in price from $60 to $500.
The museum is studying various ways to make up for the slide in personal and corporate donations and lower returns on its endowment fund.
“A lot of work has gone on with the finance committee in the last six months to talk about the future of the museum and where we are going,” Wiant said. “We are still looking at the next couple of years to see what we expect from the endowment fund and what we can get from fundraising.”
Other fall-out
Meanwhile, other Price-supported causes have been affected by troubles in the family businesses.
David and Dallas Price founded and remain on the board of Oaks Christian High School in Westlake Village. The school’s sale of $31 million in National Golf stock in May 2001 has drawn charges of self-dealing from lawyers suing National Golf on behalf of shareholders. The sales took place about three months before questions began to emerge about the health of the business. School officials didn’t return a call seeking comment.
According to filings, the school still owns 75,000 National Golf shares, representing $140,000 in annual dividends that have now been suspended.
Additionally, officials at Santa Monica Airport said David Price has considered sub-letting the space he now leases from the airport to house the Museum of Flying, and moving his vintage aircraft to another location.
(Another Price-controlled company manages several small airports in L.A. County, including El Monte Airport.) Santa Monica Airport manager Robert Trimborn said those plans are on hold at least through the end of summer.
