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When arts institutions invite disaster

While they raised big money, the board members publicly complained that in their view the community could not afford an orchestra at the present level.

Elite boards tend to prefer raising big money for arts building projects — the "edifice complex" — rather than for actual arts activities.
MinnPost photo by Corey Anderson

Many have offered opinions and insights concerning the value of the Minnesota Orchestra now mired in the unprecedented long-term lockout of the musicians, but something more can be learned by remembering and comparing the serious situation of another arts organization more than 40 years ago.

In the early 1970s, the Minneapolis Society of Fine Arts — MSFA, then the umbrella organization for both the Minneapolis Institute of Arts and the adjacent Minneapolis College of Art and Design — undertook a massive building expansion project that was strongly advocated by key MSFA board members Atherton Bean and Charles Bell. With an expected cost of more than $30 million, $167 million in today’s dollars, the sheer scale of the fund raising caused concern. At that time, for example, John Pillsbury told me his family had concerns about the huge project, although they finally went along with it.

I was active then in a group of artists, composers and authors that publicly criticized the project; idealistically we urged that money be set aside for an innovative effort to help artists. While we would have been pleasantly surprised if Bean and his MSFA peers had altered course, we certainly shone a spotlight on the tendency for elite boards to prefer raising big money for arts building projects — the “edifice complex” — rather than for actual arts activities. But MSFA risked serious disaster with its oversize project. Several years later, a former MSFA official pulled me aside at a social gathering and said, “You don’t know how right you were.” When I asked what that meant, the insider explained, “They almost defaulted on their bonds!” Had that occurred, the Institute’s fund-raising capability would have taken a grievous hit, and because the organization does not own the buildings, the art collection would have been jeopardized. Bad management, no doubt, though not ill-intended.

Compare what has happened in the case of the Minnesota Orchestral Association (MOA) after its board was captured by bank executives Richard Davis and Jon Campbell, who pushed MOA into an expensive renovation of Orchestra Hall during a time of recession while neglecting the all-important endowment fund that exists to help pay the musicians. MOA’s report filed in July of this year with the Internal Revenue Service stated the organization’s mission or most significant activity to be “A Minnesota Symphony Orchestra, internationally recognized for its artistic excellence” and for its “distinguished performances around the world, award-winning recordings, radio broadcasts and educational programs, and a commitment to building the repertoire of the future, ” etc, etc. Elsewhere, however, the MOA board clarified its new intentions by removing “orchestra” from the corporate mission statement and designating MOA a mere operator of Orchestra Hall as a center for unspecified performances.

Degrading the operational asset

While they raised big money, acknowledged in the IRS report as “significant increases in public support” related to “renovating Orchestra Hall” and “raising support to fund the cost of the renovation,” the bankers and their allies publicly complained that in their view the community could not afford an orchestra at the present level, and they let the endowment erode. As with the MSFA example, bad management, but here with ill intent, to degrade the renowned operational asset.

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During the 1970s period when MSFA plunged ahead with massive construction, the museum employees began organizing because they had unresolved work problems. MSFA’s board reacted by spending considerable money on legal fees to try to fend off unionization. One experienced labor contact said it had been years since he’d seen such extreme managerial truculence. But the Minneapolis Institute of Arts did become only the second major U.S. art museum to unionize. Now, these many years later, both management and labor describe relations there as reasonable.

In contrast, MOA’s relations with the musicians plummeted to an all-time low as if on cue, just before renovation began on the hall. The board proposed a hefty cut in musicians’ pay, and perhaps even more significantly, more than 200 changes in the collective-bargaining agreement. Besides its provisions concerning pay and benefits, the union contract provides protections from unreasonable working conditions and is the cumulative result of many years of good-faith negotiations.

Faced with such an extreme retrenchment, the musicians predictably rejected the proposal, and management locked them out. Even the involvement of a noted mediator, former Sen. George Mitchell, didn’t narrow the gap between the two sides. Formerly such staunch and musically minded civic leaders as Elbert Carpenter, Judson Bemis, John Pillsbury, Kenneth Dayton and many others would have never let matters come to this. Gone are the early days of the Evergreen Club when business leaders and musicians collaborated to put the orchestra on a firm footing. Campbell and Davis are of a different breed.

It appears that MOA may have risked disaster by planning to lock out the musicians through making an unreasonable and likely to be rejected proposal, thus saving money that would have gone to musicians’ salaries and rent for use of the Convention Center as an interim concert venue. But now the hall renovation is done, and the musicians continue to hold firm, citing their desire to keep the orchestra’s status high by maintaining work standards comparable to those of other top-rated orchestras.

Planned or not, disaster arrived

Whether planned or not, MOA’s position has resulted in disaster. Esteemed music director Osmo Vänskä resigned, and a number of key players have gone elsewhere. So far, MOA has not defaulted on bond payments or failed to pay bills, but its fund-raising capabilities must have suffered a heavy self-inflicted blow. And it may have breached trust with those who previously donated specifically to fund musicians, if MOA has spent such income during the lockout. Why would anyone gladly donate money to such a financially mismanaged organization? (Not to delve into the management’s deficiencies in audience development and other areas!)

Aside from the annual high-society “Symphony Ball,” the renovated hall has stood largely empty except for an event by the politically conservative Center of the American Experiment on right-to-work laws: in your face, union! Of course the artistic status of a renowned art museum such as the Institute of Arts does not depend on unionization, but it’s highly unlikely that any first-rate U.S. symphony orchestra would maintain top quality without an effective union and good labor contract. The finest musicians wouldn’t want to join a “right to work” orchestra.

A final point of comparison centers on public subsidy and finances. At the time of its gargantuan expansion, MSFA approached the Legislature for an increase in the “Park Museum Fund,” its means of support by a direct levy on Hennepin County property based on statutory authority dating back to 1911. The Legislature complied, and to this day the rate remains at .00846 percent of market value. Few seem aware of this unique subsidy, which currently nets the museum more than $10 million per year. MOA got a $14 million bonding grant for the hall renovation, but unlike the Institute it gets no steady operating support from a tax levy. Legislators might consider a comparable or more broadly based measure for the orchestra. (Of course, the Institute generally offers free admission, and that cannot be the usual procedure for the orchestra.) There would have to be changes in MOA governance.

And changes in governance are needed in any case, because it appears that for the orchestra to survive in recognizable form, either the musicians must struggle to operate as a new entity divorced from MOA or else Jon Campbell, Richard Davis and their allies must resign from the MOA board in order for MOA to restore its fund raising ability, amplify the endowment and resolve the lockout.

David Markle, of Minneapolis, is a writer and acoustical designer.

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