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Will Smile for Cash Page all

Feature: At $43 million and counting, The Leonardo Museum better kick some ass.

By Stephen Dark
Posted // August 29,2007 -

When The Leonardo’s executive director Mary Tull went on vacation at the beginning of August, the museum’s PR consultant, Lisa Davis James, told Tull to pack her cell phone. She knew there was work still to be done.


On Aug. 14, the Salt Lake City Council would vote on the future of the interactive, multidisciplinary art, culture and science museum for which Tull has raised funds as a consultant and, since 2005, has headed.

Thanks to inflation, the museum’s management says, it now needs $13 million on top of the $10.2 million Salt Lake City voters agreed to pay in additional property taxes back in November 2003. The $23 million is the current cost of retrofitting what Tull describes as the “much beloved,” long-vacant downtown Salt Lake City library building on Library Square.

Tull is married to Salt Lake City’s First Unitarian Church minister, the Rev. Tom Goldsmith. For several years, Goldsmith and his wife had planned to attend a retreat on Washington’s San Juan Islands in August.

But five days after they landed on the archipelago, Tull cut short her vacation, leaving what she describes as the island’s “cool, wonderful mist” to return to Utah’s heat-scorched plains.

“I was on the cell phone constantly, talking to everyone,” Tull says. “The level of anxiety, the level of meetings [that were taking place], I really had to be [in Salt Lake City].” She sighs. “That was not fun. It was hard to leave and come back to the desert.”

But despite such a literal about-turn, The Leonardo, Tull says, is not in a crisis. “This is a defining moment, it relates to our home, where we are going to be.”

Others, however, saw this “defining moment,” and her brief vacation, differently. Three pages of highly critical questions about the Leonardo were e-mailed by a “Mr. Leo” to the Salt Lake City mayor’s office and City Council as well as City Weekly days before Tull left for the San Juan Islands. “Mr. Leo” noted, “Director leaves for vacation […] during the most crucial time when leadership is needed. What does this say?”

Despite much speculation as to the identity of the e-mailer in The Leonardo’s tiny rented offices next to the Main Library, the identity of “Mr. Leo” remains unknown.

Until recently, rumblings of discontent about The Leonardo have focused on alleged ego conflicts and the impact the museum’s outstretched hand has on Salt Lake City’s donation pie. These complaints arguably have been drowned out by The Leonardo’s spin machine led by Tull and PR consultant James. But “Mr. Leo’s” electronic missive both crystallized and added to those concerns, raising questions about how well the project’s being managed, its financial health and the viability of its future. What seems to lie behind the e-mail is a concern that, up till now, this admittedly complicated mix of public and private funding lacks transparency.

For now, though, fans and well-placed supporters far outnumber critics. “We treasure and value The Leonardo,” says Tim McInnis, assistant dean at the University of Utah College of Humanities. “I think the world of Mary [Tull].”

In October 2005, Leonardo founding partner The Center for Documentary Arts presented—along with the College of Humanities, The Leonardo and the SLC Film Center—the 10-week Exodus exhibition. This was, by all accounts, a riveting photographic journey by Brazilian photographer Sebastiao Salgado into the global tragedies of social displacement and genocide. Exodus was hailed as a triumph for the yet-to-open Leonardo, a sign of the riches to come. It confirmed for Salt Lake City’s intimate world of liberal arts afficionados the museum as a future jewel in the crown of this city’s progressive cultural offerings. McInnis, for one, sees the museum becoming “the intellectual nerve center” of the city.

Tull’s decision to abandon the mist-drenched San Juan Islands may have paid off: The City Council came through for the beleaguered museum. Not only did it pony up $600,000 to secure a $1 million FEMA grant for seismic retrofitting, it made an “extremely important commitment to find a solution [to the $13 million funding gap] within 30 days,” says The Leonardo’s Belgium-born business manager Philippe Wyffels.

The recent spate of press coverage on the construction funding gap follows 18 months of relative disinterest by the media. For “Mr. Leo,” such indifference at a time when the city contemplates committing more taxpayers funds to the project appears unacceptable.

“Before any additional public funds are committed or any new bond referendum is placed on the ballot, City Administration, City Council has a duty to require full audits both financial and management,” “Mr. Leo” writes. “Yes?”

The current publicly quoted cost to open the museum stands at $33 million. But, even if the City Council answers the Leonardo’s prayers and cuts a $13 million check to cover the construction-funding gap, $33 million will not be enough. The Leonardo, its management says, needs at least another $10 million. Who will foot that bill and the many more to come if and when the museum starts welcoming visitors is arguably the biggest question of all.

Which is why this story is all about the numbers.

Just ask Deeda Seed, one of the few willing to speak out publicly on The Leonardo. A former Salt Lake City Councilwoman and famously fired spokeswoman for Mayor Rocky Anderson, Seed worked with The Leonardo board for a spell and says she’s stayed in touch with the situation. She now manages development for the Southern Utah Wilderness Association.

What it comes down to, she says, is clear: “[This project] needs to be salvaged in a practical way, the light of reason [brought to the] budget process.”  >>

SHOTGUN WEDDING
There’s long been a desire for a science and technology museum in Salt Lake City which, Anderson says, is one of the very few large cities not to claim such a facility. Adds Salt Lake County Councilman Randy Horiuchi, “This is a state of science. It’s well known for its software, biotech, copper mining. They even build spaceships here.”

Back in 1993, U of U professor Joseph Andrade was chairmen of The Utah Science Center Authority, which was charged by the Legislature with building a technology museum.

“Joe is so passionate; he wants it to succeed,” Seed says. “He’s been dreaming of the Utah Science Center [USC] for 20 years.”

n n n n
hspace=5
Brazilian photographer Sebastiao Salgado’s 2005 exhibition Exodus: a taste of things to come?

Come 2000, when Anderson requested proposals for what to do with the soon-to-be abandoned library building, Andrade and his USC board seized the chance, as did Leslie Kelen’s now 24-year-old Center for Documentary Arts [CDA] which made a joint presentation with Global Artways (now Youth Artways), a city-funded youth-arts program run by Elaine Harding (later replaced by Anderson stalwart, Janet Wolf). Andrade proposed an interactive science center, while Kelen championed a center to “celebrate the stories of our ancestors.” In the end, the selection committee and Anderson effectively awarded the building to Andrade, Kelen and Harding.

Since whoever took over the city-owned building was expected to finance its renovation and maintenance, it’s hard to fathom how these three relatively small operations were supposed to raise the $14 million Andrade told the media in April 2002 they needed to open the facility in late 2003. Many such promised dates have come and gone since then.

Fund-raising issues aside, bringing together USC’s Andrade and CDA’s Kelen struck some as questionable. “Their three organizations [have] different personalities, budgets, missions,” Seed says. “It’s just a recipe for disaster.”

Kelen disagrees. “Joe and I probably see eye-to-eye on more issues of programming vision than probably anyone else in [The Leonardo] group.” It’s not a personal issue, he says, “it’s a programming, structural matter.”

Once it had been agreed that The Leonardo would function as an umbrella organization for the three partners instead of the initially discussed mall-like museum experience of splitting the building into three, the issue then became how to integrate them.

“Les is equally passionate [as Andrade],” Seed says. “He can talk for hours about the power of stories.” The problem is, she says, “These people have a beautiful, wonderful vision, but they don’t have any practical vision to implement it.”  >>

THE NUMBERS GAME
“One hesitation people have is putting money into a public building,” says The Leonardo’s early fund-raising consultant, Pathways Associates’ Dave Jones.

So Jones and The Leonardo went to the City Council, which agreed to go to the voters for a $10 million tax bond for the construction, conditional on the museum matching that amount for exhibit development. The $10.2 million figure was based on an estimate from local firm VCBO Architecture in order to retrofit the building, abate asbestos and make it earthquake-safe.

If the first black hole in The Leonardo story is why arguably three disparate partners were brought together, the second is why VCBO’s estimate was so low. Anderson acknowledges it was understated. Some speculate it was low-balled to make the $10.2 million pitch more palatable to voters. VCBO did not return a call for comment. Anderson regrets not asking for more at the time. “If I could wind back the clock,” he says, “I would have loved to have gone to the voters with a $25 million or $30 million bond and done this the right way.”

hspace=5After Salt Lake City’s voters approved the $10.2 million bond, The Leonardo’s team then had to raise the matching funds to trigger the bond money.

Which leads to black hole No. 3.

In February 2006, Salt Lake City Corporation finance director Gordon Hoskins sent a letter to Tull to confirm that, after examining the museum’s fund-raising efforts through December 2005, it had matched the city’s $10.2 million bond. Part of that match was $5.6 million in pledges. Yet, only four months later, The Leonardo’s annual report showed assets of just $3.8 million. Somehow, at least two-thirds of the money it had raised for exhibit and program development had not made it to the balance sheet.

Of those pledges, it turns out, $3.4 million are guarantees, which means, Tull says, “It is pledged if a certain condition arises.” While the city lists this money as a pledge, The Leonardo’s auditors, as per accounting rules, view it differently and list it off the balance sheet as a note.

A whopping $3.1 million of those guarantees was an anonymous donation. “It’s not the most common thing in the world,” says fund-raising expert Jones about such a large gift with no name attached for recognition.

Along with its mixed bag of pledges, the city also accepted, as being part of The Leonardo’s matching funds, receipts and donations from the Exodus exhibit of over $190,000. In total, the exhibition generated around $400,000 in revenues, but also cost just as much to put on. Wyffels says the exhibition made a tiny profit of several hundred dollars.

Whether the city should include part of the exhibition’s revenues without taking away expenses is debatable. Although Anderson says he shouldn’t take a position, his first response is that whatever remains of net revenues after deducting expenses might be acceptable.   >>

DECISIONS, DECISIONS
With the $10.2 million building bond secured by matching funds in February 2006, it might have been expected that the city would immediately release the funds to begin construction. After all, “to get the project moving,” Wyffels says, The Leonardo floated reimbursable funds to hire the city’s choice of architects for the project, Philidelphia firm Ewing Cole, in September 2005.

Anderson offers a succinct explanation for why the money didn’t leave the city’s coffers for Library Square. “[The $10 million] wasn’t enough to build the structure, and we’d promised the voters a structure, not to build two thirds and board it up.”

Nevertheless, according to the board’s December 2005 minutes, Ewing Cole agreed to produce a detailed minimal scheme for the $10.2 million budget. In the following 18 months to date, no such scheme has appeared. Recently retired Main Library director and ex-Leonardo chairwoman Nancy Tessman is less than happy.

“There should be a plan out there that can be more moderate that will get us on the way,” she says.

If there were, Ewing Cole couldn’t develop one. From January 2006 on, a long, protracted dance took place as architects, the city, the board and Leonardo’s management dithered over the slew of schemes Ewing Cole provided, ranging in cost from $8.4 million to $25.2 million, and how to fund them.

To date, The Leonardo has spent $350,000 on Ewing Cole but does not have a final design all parties can sign off on.

Each month that decisions on the schematics were delayed, inflation added $160,000 to construction costs according to Tull in Leonardo board minutes from October 2006. But the board wasn’t only concerned about rising construction costs. Board member Ned Weinshenker commented in the July 2006 minutes on “how the funding momentum had diminished since Christmas 2005.” At that same meeting, the board wanted more confidence in the “fund-raising strategic plan.”

Perhaps some of the confidence was drained by Tull spending many months unsuccessfully waiting for a top-drawer local philanthropist to respond to a request for $20 million. This money was, in part, intended to help pay for one particular Ewing Cole scheme for a northern façade which, some argue, was too grandiose.

The north proposal was beautiful, board member Weinshenker says. But perhaps, he admits, “there was too much wishful thinking.”

Anderson maintains the design was “brilliant.” But, as board chairman Marshall Wright says, “having [Anderson] say he loved it made us think there was more support for it than it turned out to be both in the city and in the philanthropic community.”

The uncertainty over building design had at least one board member concerned. In May 2007 board minutes, Morris Rosenzweig asked “if Ewing Cole, The Leonardo and the board share responsibility for stagnation in building progress.”
Tull, Wyffels and Tessman agreed that “all parties are accountable.”

Ask Wright who is to blame for the slow progress, and he says blame is not a word that’s come up in board meetings. Rather, he says, the issues are about moving forward while getting the city engineers’ approval and review of design matters as they come up. “I think the iterations of going back and forth with architectural design has been the thing that made it difficult and slowed the project down. The iterative process wasn’t as fast as I would have liked it, but I don’t think it was overly slow.”

TELLING TALES
Along with its Ewing Cole fees, to date, The Leonardo has spent $1.8 million on consultants. Salt Lake City lobbyists Exoro Group has billed $80,000 while local design firm Axiom earned $35,000 for a branding campaign.

All this is still chump change compared to the $714,000 spent on Oakland, Calif.-based museum consultant and designer Gyroscope. That said, Gyroscope has helped The Leonardo integrate the three founding partners, at least programmatically, if not in terms of The Leonardo’s governance.

Gryoscope has come up with a way of layering programming over exhibits. The Leonardo’s exhibit development manager, Alexandra Hesse, attempts to demonstrate as much one August afternoon as she walks around the empty library building, “‘Story’ is one of the themes that helps [The Leonardo] be the connective tissue between the different parts, offering a unified, cohesive visitor experience while still not dictating to partner organizations what they need to do,” she says.

Hesse outlines how the ground floor will be a piazza, where people can gather around an enormous digital screen and hang out on loungy furniture or at a café. On the second floor will be workshops, an enormous “sphere of humanity” with data-stations that will allow visitors to explore subjects of interest—think a souped-up Google.

But Gyroscope can’t solve all their problems. Not when launching The Leonardo is akin to, as PR consultant James recalls ex-Global Artways director Elaine Harding saying, “building a plane at the same time as you’re trying to fly it.”

Trying to fly by the seat of your pants, some argue, is resulting in a convoluted management structure where the three founding partners are involved in daily decisions that the Leonardo staff makes on exhibits. For example, one question is how founding partners will react if and when Hesse chooses outside programming and exhibits over those of Andrade and Kelen.

With the Science Center planning to merge with The Leonardo and Kelen guarding his autonomy, tensions might rise.

“[The structure] sounds unwieldy,” Hesse says. “It probably isn’t the simplest organizational structure you could come up with. But we are learning to live with this and get better at the management of this situation that we have.” She adds, “Clearly, it can’t be that we’re trying to stitch things together that don’t naturally fit.”  >>

BURN, BABY, BURN
The price for letting “the fund-raising momentum diminish” from the halcyon days of matching funds is most noticeable in the as-yet unaudited bottom line of The Leonardo’s financial statements for the fiscal year ending June 30, 2007.

Compared to the $2.2 million surplus of June 2006, the following year saw a shortfall of $1.6 million. That said, Wyffels says thinking in terms of profit or loss when it comes to a museum is the wrong concept. “We have an operating budget of $4.3 million, and we have to find sources of revenues that cover that amount. If we are negative including fund raising, then we have to get money; if we are positive including fund raising, we are going to put money into reserve funds.”

“Negative including fund raising” means they raised only $230,377 in the financial year just ended but spent around $1.8 million. Tull cautions to report such figures in context, pointing out that together with the city, The Leonardo raised $1.9 million toward building costs during the last financial year, money that can’t be included in its income.

Wright says the poor fund-raising is due to Salt Lake City being “a difficult community to raise funds in; there’s a lot of competing interests.” He argues that after “the bond was passed, a lot of people thought the whole thing was over. It’s a momentum issue.”

Nevertheless, the first days of August this year must have looked grim for cash flow. Wyffels notes The Leonardo has $150,000 in unrestricted cash in the bank. Unfortunately, it also has a current monthly “burn rate,” as they call expenses, of $220,000.

Wright says management has been instructed to match cash flow against operating expenses so “we can get from where we are now to finishing programming issues.” He adds that he expects the burn rate to drop off and more fund-raising to come in.

Wyffels echoes him. “We expect new fund raising to kick in again as soon as the building situation is solved.”

Management is not the only one using the building’s fate to hang problems on. James says she does have the beginning of a marketing plan, after complaining in a December 2005 board meeting about the need for something concrete to show people what The Leonardo “experience” actually means.

The Leonardo experience, as James offers it, revolves around Leonardo buzzwords like “renaissance” and “transformative.”

“Our challenge is putting something that is the size of an ocean in a thimble,” she says.

Which begs two questions: How do you sell an experience so loosely defined, and how do you know that The Leonardo’s brand of science and art center will attract visitors from Salt Lake City and beyond?

DO THE MATH
A more daunting question, however, is how much The Leonardo will cost and how it will fund its future.

As of today, construction work, Tull writes in an e-mail, is budgeted for $25 million; exhibits, programs and ramp-up are budgeted for $18 million.

Grand total: $43 million.

Assuming, that is, the facility opens in April 2009. Given the many times The Leonardo has extended its opening date, it’s understandable if some view it with skepticism. And more delays cost more money.

Although Wyffels dismisses the idea of profit and loss being applied to a museum, when asked in an e-mail if he believed The Leonardo would be profitable in its first year, he wrote, “Absolutely. And, since we are a nonprofit, we will also be able to put funds in our reserve fund.”

This is not, however, the entire picture.

The museum, he continues, “anticipates a larger-than-usual ‘earned revenue’ share, and thus less dependency on fund raising.”

On average, U.S. science museums, according to 2005 Association of Science Technology Center’s figures, operate on a 47.5 percent earned-revenue share, meaning that they have to generate donations to pay for the other 52.5 percent of expenses to break even.

The Leonardo assumes a generous earned-revenue share of 63 percent, Wyffels says. So, to break even and generate reserve funds the first year, The Leonardo will have to raise more than the other 37 percent, which means raising $2 million to $2.5 million those initial 12 months.

“We will continuously ask for money for operations and exhibits,” Wright says. “[But] we’re not expecting to get a tax stipend each year to operate The Leonardo.”  >>

LAST ONE OUT, TURN OUT THE LIGHTS
Many see The Leonardo as part of Rocky Anderson’s legacy for this city. But Anderson prefers to credit those who have worked to put the start-up together.

“There’s times [Anderson] told me it’s the best thing since sliced bread,” says Salt Lake County Councilman Randy Horiuchi. “There’s other [times], he’s cursed them.”

Whether praising or damning, Anderson hopes the museum will make it. “If I was a betting man, I would say this was going to happen one way or another,” he says.

Perhaps a recent awareness at board level that, as Tessman says, “we really have to make certain we are moving ahead quickly,” might be grounds for upping the odds in Anderson’s favor. Tessman accepts that “there have been times when differences of opinions have delayed decisions.” Consensus, she says, sometimes has not been reached. “We need to make sure we are making some serious progress quickly here—not only because of the money, but because people invested in the idea of The Leonardo need to see some serious action.”

hspace=5 Among those invested in The Leonardo are, including Tull, its seven staff members. What they make of the board’s commitment to “action” is debatable, especially if the board’s problems with executing its own corporate governance are taken into account. Tull did not vote at board meetings until four months ago, although, as the May board minutes state, The Leonardo’s bylaws require that its $75,000-a-year executive director is counted as a voting board member. “We made a mistake,” Weinshenker admits. In addition, not only do bylaws, according to the minutes, “mandate regular changeover in founding partners’ board positions, which is not currently taking place,” Tull has yet to receive an evaluation. Wright says he will do one within three weeks’ time.

Some fiscally conservative nonprofit boards, says Utah Nonprofit Association head Don Gomes, “are really not open to vital discussion on issues and directions.” With a board more open to discussion as, by all accounts, The Leonardo’s is, Gomes says, “things can move more slowly; there’s a possibility of financial opportunities being missed, prices going up. Ideally, there needs to be some balance” between a discussion-adverse board and one constantly seeking consensus.

What a board also must do, Gomes says, is reflect the community—particularly, it might be argued, the board of a museum that’s reaching out to Salt Lake Valley for future visitors. Whether The Leonardo board reflects the diversity of the valley is hard to say. Wright, a business adviser who is black, says, “When they asked me to go on the board, I definitely thought it was to reflect more of the community.” Tull, asked if there were Republicans or LDS Church members on the board, said, “There are Republicans, I know that,” then added that they don’t screen for religion.

Whatever the overall makeup of the board, one issue that might need to be addressed is communication between management and the board’s chairman. Wright says he was unaware of the scathing Mr. Leo e-mail being circulated.

“I thought it was odd it didn’t come up somewhere along the way,” he says, after being informed of the e-mail version of a distress flare about The Leonardo’s future. “It’s not necessarily a terrible thing I didn’t know about it.”

The mysterious Mr. Leo e-mail couldn’t have helped staff morale either. Perhaps it was “Mr. Leo’s” dramatic appearance that prompted management to instruct staff to sign a confidentiality agreement. That’s something even Tull says she’s yet to do.

For now, the library building remains empty. Water still runs in the drinking fountain, the clock still ticks away the inflation-laden minutes. The coolly elegant lines of the escalators rise up to the second floor, the traffic on 500 South gliding by obliviously outside the bank of windows.

Hesse describes the interior as having a cavelike intimacy, an impression enhanced by the towering V. Douglas Snow painting near the entrance. Virulent greens, blacks and reds erupt up the 30-foot canvas, seemingly giving birth to a dove at the top of the frame.

What Tull and the city are doing, of course, is trying to breathe life into the golem-like clay of an institution. Indeed, when you stand in the old library building and listen for a moment, it’s almost as if there’s a subterranean echo of a heartbeat, slow, deep and firm.

Wright, for one, is optimistic. He says once the seismic issue is resolved with the city, the bulldozers go in and they put a banner up announcing, “The Leonardo is rising,” all the donors Tull has told him are so close to signing on the dotted line will start “jumping on the bandwagon.”

Regardless of its ups and downs, Deeda Seed believes that even at $50 million or more, it’s a reasonable price to pay to have The Leonardo open its doors.

“But we need to have that conversation as a community,” she says. “Admittance needs to be free, the value to the public greater. The more we put in it, the more we own it.”

 

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REPLY TO THIS COMMENT
Posted // August 30,2007 at 06:03 Stephen Dark is to be complimented. Having worked obliquely with various parties at various times - the CDA, the Leonardo, and SLC Corp - I found the issue difficult to get my arms around and comprehensively understand it well, especially understanding how it developed and continued to grow, and as a result, what problems exist now and into the future. nnThis article has provided an excellent, fairly comprehensive explanation of most of this. Thanks for the great work!

 

 
 
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