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Long Beach Update

By Intellectual Property Law, Esq.

Interesting twist in the Long Beach Museum of Art story mentioned earlier in the summer here. Back in June, it was reported that "in 1999, the [museum] launched a campaign to obtain funds for construction of a new two-story exhibition pavilion" and, "under the [1999] agreement, the city promised to accept liability for the bond debt if the foundation could not pay it off." But, reported the LAT's Mike Boehm Friday:

"as museum director Ronald Nelson mulled over what to do a couple of months ago, he researched the original bond agreement that both parties had assumed laid full responsibility for repayment on the museum foundation -- and says he found the actual language says otherwise. The documents, Nelson says, put the onus on the city to make good on the bonds should the museum's fundraising fail -- and say nothing about the museum foundation having to pay the city back. Given the legalities of the situation, Nelson says, to make any repayment on the bonds now would be a misappropriation of museum funds."

Boehm had a follow-up story in yesterdays' paper. It seems the city agrees "the museum legally was not required to pay back the bond," but they believe the museum promised to do so regardless of what's in the contract. As a result, Long Beach Mayor Bob Foster "has recommended eliminating the $569,000 in support the city normally would pay, noting that the cut is a consequence of the museum's refusal to pay off the bonds."

The "Stalin-esque" idea of selling art to pay off the debt seems to have been ruled out:

"Selling art 'is not a concept that's on the table,' [assistant city manager Suzanne] Frick said. 'I don't think it ever was . . . It was a comment a council member made, never a formal action or discussion.'"

Full post as published by The Art Law Blog on September 05, 2009 (boomark / email).