Colorado College board expected to work toward agreement to acquire Fine Arts Center's assets

Because of mounting debt at the Fine Arts Center, Colorado College is moving towards a merger with the museum. The Hopi Basket Weavers sculpture by Doug Hyde stand near the entrance of the Fine Arts Center on Tuesday, March 22, 2016. (photo by Jerilee Bennett/The Gazette)

Colorado College appears poised to take over some - if not all - of the operations and holdings of the Colorado Springs Fine Arts Center, a shift that arts scene movers and shakers say would benefit both nonprofit organizations.

"I believe, and many believe, that this could be a very good thing for Colorado Springs and for the community and for Colorado College," said David Dahlin, FAC president and CEO. "We're looking to find a win-win-win there. From the FAC's point of view, it needs to be a win for the community because that's who we serve. CC doesn't exist to serve the community, and the FAC does."

Acquiring the FAC would give the college the opportunity to enhance courses in art, art history, Southwest studies, theater, dance and other subjects that relate to the FAC's collections, said Robert Moore, CC's senior vice president of finance and administration.

"We are part of the community, and the chance to operate a community fine arts center is appealing," he said.

If that does happen, Moore said, "It would be a community fine arts center located on the Colorado College campus. It wouldn't be just for the college."

Though a partnership between the private liberal arts college and the privately funded arts center has been hinted at since the beginning of the year, few details have been released until now.

"Nothing's been decided," Moore said.

What's being discussed is CC taking on the assets of the arts center, including the artwork and the buildings.

"That's part of the conversation," Dahlin said "We're both nonprofits. The question is preservation of the mission. There will not be a deal our board would agree to that does not guarantee the preservation of the art and building and other donor intents over time."

While ownership of the FAC, at 30 W. Dale St., north of downtown, its Bemis School of Art and the land is on the table, Dahlin said, "In whatever scenario, the building would be continued to be used for the FAC's mission," to be a regional focal point for arts experiences.

A merger of sorts could be the leverage needed to hoist the FAC out of the financial pit into which it has fallen. CC would assume the museum's debt as part of the deal.

"We'd get the plusses and the minuses," Moore said.

The college would consider paying off the debt with part of its endowment, which Moore said is currently valued at about $700 million.

The FAC still owes more than half of a $15 million bond issue in 2006, which helped fund a large expansion.

The merger idea came about after a local resident who is not currently an FAC donor held "quiet conversations" with each institution and received positive feedback from both, Dahlin said.

Discussions reportedly began in September and were revealed to stakeholders in January. The FAC announced in January that the two organizations had started "substantive conversations about the possibility of forging a future together."

The FAC's board of trustees voted unanimously on Feb. 18 to endorse a proposal to "consider combining" the two organizations.

CC's board agreed at its February meeting that discussions between the two boards would continue and be "directed toward a new partnership."

Negotiations are underway and include taking inventory of the condition of the buildings, Moore said. The college is compiling a deferred maintenance list to figure out what it would need to invest into the buildings, he said.

The FAC announced a few weeks ago that it had received a $200,000 historic preservation grant from the History Colorado State Historical Fund to renovate the exterior of the 80-year-old building.

The earliest an agreement between the two organizations will be made is June, Dahlin said.

Colorado College's board will meet again in mid-June, and Moore said, "It would work well for us to have something to take to them then."

If the college takes over the FAC, the board of the fine arts center could become an advisory board, much like the board of KRCC, a public radio station CC owns.

Margot Lane, a local philanthropist and honorary trustee of the FAC board, said she was "pleasantly surprised" when she heard about the merger idea.

"I thought this could be beneficial to our community if this partnership could progress and come to fruition," she said.

Financial woes

The FAC has endured leadership turnover and financial problems for years. Dahlin was hired in mid-2014 to build an endowment and reduce the need to rely on donations from key patrons or support from the public sector, which never fully materialized.

Dahlin replaced Sam Gappmayer, who held the head position from 2008 to 2013. It was the CEO before him, Michael De Marsche, who is believed to have left the museum with a robust bill. He managed a $28.4 million renovation and expansion in 2007 and brought in expensive exhibits, including the Dale Chihuly show.

According to tax filings, FAC expenses have outpaced revenues by nearly $4 million over the past three years. Hallmarks of financial woes are evident throughout recent audits and tax statements, including the center borrowing $500,000 from its fundraising foundation in the last fiscal year and significantly reducing salaries for top staff.

Dahlin confirmed debt has hung over the museum for a number of years.

"Some of it is related to building expansion - there was a successful fundraising campaign that came up short - and because of how markets have gone," he said. "It's like having a mortgage - you wish you didn't. The FAC has been under tight financial realities over many years in terms of limited operating reserves. It has managed in that scenario for long time. It's not worse than it's been; it's better than it's been."

Lane said medium-sized museums such as the FAC often struggle financially and in larger cities receive assistance from large corporations who want to invest in the arts and culture of the community. Colorado Springs doesn't have that powerhouse commitment.

Lane and other big-time philanthropists are reportedly considering helping in efforts to bail out the FAC and set it on a more sustainable path.

In November 2011, Lane donated $4 million from herself and the John E. and Margaret L. Lane Foundation to the University of Colorado at Colorado Springs and Peak Vista Community Health Centers to build a facility named in her honor, the Lane Center for Academic Health Sciences at UCCS.

The possible relationship between the FAC and Colorado College is similar to that of Peak Vista and UCCS, she said.

"In this day and age, we're going to have to form more of these collaborations or partnerships because it's more and more difficult for nonprofits to stand alone," she said.

Moore said CC would consider asking its donors if they would be interested in becoming donors of the FAC, and vice versa. CC donors also might have artwork to contribute for display or the permanent collection.

Dahlin points to the increasing number of museums around the country that are merging with higher education institutions due to lack of financial support.

"Higher education has the values that aren't all economic-driven," he said. "They can do things that don't necessarily create a positive business return. That's the challenge; museums are struggling and shutting their doors. We've never had city or government support. We have to face that reality. We need significant underwriting and significant community support."

Dahlin doesn't want the merger to appear as a last-ditch effort to save the FAC.

"I don't want people to think we're in a back-against-the-wall situation," he said, "that this is a 'desperate times calls for desperate measures' sort of thing. We're doing better than we have in years. It's a question about longterm health and vitality in the Springs."

Prior connection

The college and the museum have had relationships in the past. In 2014, the FAC gifted Colorado College a collection of more than 15,000 books to integrate into the college's Tutt Library. The collection had been in storage since the Fine Art Center's expansion and included 6,000 books donated to the FAC by co-founder Alice Bemis Taylor.

The FAC is adjacent to Colorado College and across from the Cornerstone Arts Center, the college's own performing arts center with a 450-seat theater, a black box theater, a woodshop for set building and theater, dance, film and new media studies departments.

The FAC's origins date to 1919, when Colorado Springs philanthropists Julie and Spencer Penrose established the Broadmoor Art Academy. The present-day Fine Arts Center opened in April 1936 and is listed on the National Register of Historic Places. It provides numerous cultural offerings, including permanent and traveling art galleries, a theater company, 450-seat performing arts theater, library, music room, gift shop and the Bemis School of Art.

Lane said such resources would provide CC with "a cultural depth it does not currently have."

And, she added, "I'm very concerned that the Fine Arts Center retains its integrity and stability and place in the community."

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