THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234

 

TO:	The Honorable the Members of the Board of Regents
FROM:	Carole F. Huxley
COMMITTEE:	Full Board
TITLE OF ITEM:	Heckscher Museum Petition for Exception to Regents Rules
DATE OF SUBMISSION:	January 27, 2005
PROPOSED HANDLING:	Action
RATIONALE FOR ITEM:	The Heckscher Museum has petitioned for an exception to Regents Rule 3.27(f) to allow it to use cash proceeds in excess of $10 million from the sale of a painting for a purpose other than care of collections, namely, to fund building renovations and improvements. The request is reasonable in that the painting has been appraised at $10 million; therefore, $10 million in proceeds will go toward collections with the excess to be spent for capital improvements to better store, protect and display the collection. The Rule allows the Regents to grant the exception.
STRATEGIC GOAL:	2
AUTHORIZATION(S):

 

SUMMARY:  On July 12, 2004, Heckscher Museum (the “Museum”) petitioned for an exception to Regents Rule §3.27(f) to allow it to use a portion of the proceeds from sale of a painting for a purpose other than collections, namely, for building renovations and improvements.

 

The Museum holds an absolute charter granted in the first instance by the Regents on June 28, 1957.  The charter has not been amended.

 

Rule §3.27(f) provides:

 

Proceeds derived from the deaccessioning of any property from the collection of a museum shall be placed either in a temporarily restricted fund to be used only for the acquisition, preservation, protection or care of collections, or in a permanently restricted fund the earnings of which shall be used only for the acquisition, preservation, protection or care of collections.  In no event shall proceeds derived from the deaccessioning of any property from the collection be used for purposes other than the acquisition, preservation, protection or care of collections.  A museum wishing to apply all or any part of such proceeds to any

 

other purpose may apply to the Regents for an exception, which the Regents may grant if in their judgment the exception will benefit the museum’s mission, the collection or the public, and if the Regents further determine that the museum has adopted a collection management policy that otherwise complies with the provisions of this subdivision.

 

The Museum owns an oil painting by the German Expressionist George Grosz, Eclipse of the Sun (1926), which the Museum acquired through purchase from a local art gallery in 1968 for $15,000, using museum funds.  The Museum originally purchased the work because Grosz resided in Huntington for some time during the 1950s.  The painting does not fit within the Museum’s current collection management policy, which the Museum states is “focused on American Art with an emphasis on the Hudson River School and American Modernist work.”

 

The Museum’s Board has negotiated to sell the painting to a private collector of German Expressionist art for $22.1 million.  The collector is willing to pay a premium for the painting.

 

The Museum’s right to sell the item through private sale and not public action is not in question.  The Museum, at our request, took steps to verify the value of the painting.  The Museum obtained a written appraisal from an independent qualified art expert stating that the painting is worth $10 million.  They then contacted a New York museum which collects German Expressionist but they were not interested in acquiring the painting.  They then approached a collector of such art who was also not interested.  The Museum finally contacted a large art auction house, which determined one of its customers might bid up to $15 million.

 

The Museum proposes to use $10 million of the sale proceeds to add to its permanently restricted collections fund, which currently stands at approximately $300,000; and to use the balance of the sale proceeds to add to an existing capital campaign fund of $8 million to renovate the existing museum building and to construct one or two new wings, for a total cost of $18 million.  The Museum building was constructed in 1920 and is in need of substantial improvements to its roof, drainage, humidity and temperature control systems and security system.  Capital funds will also be used to construct a state-of-the-art storage facility for collections; create a conservation room, sculpture storage areas and works-on-paper storage and viewing areas; and add handicapped accessible restroom facilities.

 

Recommendation:  The Museum has adopted a collection management policy that complies with the provisions of Rule §3.27(f).  The Museum’s dissolution is not contemplated.  I have reviewed the application and the supporting materials.  Staff have discussed the proposed sale at length with the Museum’s Executive Director and its two attorneys.  I find that the proposed sale is in the best interests of the Museum, and will benefit the Museum’s mission, the collection and the public.  Accordingly, I recommend the Regents grant the petition of Heckscher Museum for an exception to Rule §3.27(f).

VOTED, that the Regents grant the petition of Heckscher Museum, Huntington, for an exception to Regents Rule §3.27(f) to allow it to use cash proceeds in excess of $10 million from the sale of a painting to fund building renovations and improvements.