Big Gifts, Big Problems: Takeaways From Capital Project Hell at Lincoln Center

 Photo:  Eileen_10/shutterstock

Photo:  Eileen_10/shutterstock

Over two years after receiving a $100 million infusion from David Geffen, the Lincoln Center and the New York Philharmonic's half-billion-dollar plan for a gut renovation of David Geffen Hall is going back to the drawing board.

"There was a general sense that the project had just gotten too complicated," said Debora L. Spar, the new president of Lincoln Center. Spar said Geffen was "on board" with the decision to change directions. "I'm happy," he said through a statement. "I know they'll do something great."

His stoicism didn't last long.

A day later, Geffen ripped into wealthy New Yorkers for what he called a "shameful" record of failing to donate to the city’s concert halls and allowing these institutions to downsize their ambitions. "That a city that has as many wealthy individuals who’ve made a fortune in New York—that they couldn’t show up and support the most important cultural institution in New York, I think is too bad and shameful," he said.

To further stir the pot, Geffen's tirade came the very same day he pledged $150 million to the Los Angeles County Museum of Art's $650 million capital campaign.

Where to begin?

There are clearly many provocative questions bubbling beneath the surface, here, including: What compelled the philharmonic to go back to the drawing board? Is Geffen correct in his condemnation of stingy New Yorkers? Let's say he is correct. Can these donors really be blamed for not wanting to contribute to a project that has grown from $500 million to arguably $800 million?

And perhaps most importantly, are Geffen's frustrations rooted in an increasingly outdated mentality?

Let's start with the facts.

Risk is Risk

Spar wasn't kidding. The philharmonic's project is incredibly complex. Think architectural nuances, proposed excavation work, reconfigured plumbing systems, internal politics, the whole nine yards. If it's a deeper dive into the weeds that you crave, check out the Times coverage here. You won't be disappointed.

Otherwise, I'd like to zoom out and frame the delay within the larger arts landscape wracked by large-scale project delays and associated dramas.  

Earlier this year, the Metropolitan Museum of Art announced that it will delay plans for a $600 million wing dedicated to modern and contemporary art, while Barry Diller and Diane von Furstenberg just pulled the plug on their $250 million island park and cultural center on the Hudson River.

Nor are these setbacks relegated to New York City. The Denver Art Museum recently announced it will move forward with the $150 million renovation of its North Building later this year, whether or not a critical city bond package passes in November.

Risk is risk, regardless of one's area code.

None of this should come as a surprise to loyal IP readers. We've been harping about the risks associated with big-ticket capital expenses for years, now, and the underlying premise—that such projects, while initially engaging donors and generating big gifts, inevitably dissolve into cost overruns, construction delays, peeved donors, and even more fundraising—still holds true.

Not surprisingly, the Lincoln Center's fate was sealed by a confluence of the usual suspects.

A Familiar Postmortem

According to the Times, the project's turning point came when the construction and design teams said they could not guarantee that the work would be done fast enough that the orchestra would only lose its hall for two seasons.

Meanwhile, the chairman of the philharmonic’s board, Oscar S. Schafer, said the project was undermined mainly by its escalating costs, which were "appreciably more than $500 million or $600 million." (The Times cited an anonymous Lincoln Center executive who put the price tag at closer to $800 million.)

Also consider the departure of Philharmonic President Matthew VanBesien. When he stepped down in February, I called attention to the human capital risks associated with massive projects. Continuity of leadership is an intangible and often overlooked component of an institution's success, but it's just as important as budgets and architectural plans. And crazily complex, insanely stressful capital projects are one way to send great leaders screaming from the room. 

Given these challenges, donors can be forgiven for being a bit gun shy. Nonetheless, it's important to further explore Geffen's charges. Does he have a point regarding New York City's monied classes? 

Is Geffen on to Something?

As I noted last year, the city's arts organizations undertook a collective multi-billion-dollar gamble predicated on renovations, expansions, and new structures. While it's true that New York's far upper class has vast assets, common sense tells us there simply aren't enough donor dollars to go around. And so, at least conceptually speaking, Geffen has a point when he says, "Without great support, the opera in New York, the Philharmonic in New York—these kinds of institutions will greatly suffer."

Yet, despite the bad news of aborted projects and delayed wings, New York's billionaires continue to support the arts. Examples include the Shed on Manhattan’s Far West Side, which recently received a $75 million donation from former Mayor Michael R. Bloomberg of New York, and the Performing Arts Center at the World Trade Center, which received $75 million from Ronald O. Perelman.

Commenting on Geffen's remarks, Jimmy Van Bramer, majority leader of the City Council and chairman of its Cultural Affairs Committee, said, "I don’t think that is an indictment overall of cultural giving in New York."

And Bora herself was nonplussed by Geffen's sentiments. "I still find New York City to be the most generous city in the world, and New Yorkers to be the most generous people—look at the institutions that they support."

Indeed, Geffen's quote seems to imply some sort of either-or-proposition: Since billionaires didn't support this incredibly complex and over-budget $500-800 million project, they, by definition, don't support the arts and are stingy.

But this logic misreads fellow donors. When Los Angeles financier Jeffrey Gundlach gave Albright-Knox Art Gallery a $42.5 million donation, he said, "Let’s say I gave $42.5 million to the Met—you wouldn’t be able to find it with a microscope."

Donors want assurance their gift will make a difference, and it's hard to make that case when they're gazing into a half-billion-dollar abyss. Geffen's complaints have less to do with New Yorkers' overall stinginess and more to do with New York's stinginess regarding his pet project.

His comments also inadvertently point to a surging, socially focused arts philanthropy world that may very well be passing him by.

Tough Times for Legacy Institutions

As we've repeatedly noted, national grantmakers are "edging politely but firmly away" from legacy institutions in New York City that cannot "demonstrate a significant contribution to solving or soothing specific social or economic traumas."

Indeed, there's a kind of irony in the fact that the same week Geffen railed against New York billionaires and cut another massive check to the LACMA, the Ford Foundation named its 25 new Art of Change fellowships and an anonymous donor announced plans to sell a Basquiat to finance the construction of urban charter schools.

This may be the future of arts philanthropy. The "Old World" model of Geffenesque patrons seems to be receding, making way for donors striving to solve real-world problems. It's becoming increasingly difficult to shoehorn a $500-$800 million capital project for a legacy institution into a paradigm that frames the arts as a vehicle for social change. 

This trend is permeating public policy, as well. Consider the political landscape that is Bill de Blasio's New York City. While legacy institutions have expected some sort of public support from the mayor's office since time immemorial, de Blasio has instead shifted the city's focus to smaller institutions across the five boroughs.

One legacy institution that understands these profound shifts more than any other is the Lincoln Center. Acutely aware of the need to justify its existence, the Lincoln Center has worked to broaden its reach and shake up its brand. It recently launched a pilot grant program, funded by the Rockefeller Foundation, to encourages "innovative strategies to catalyze greater access to, and participation in, cultural opportunities in the diverse neighborhoods of Central Brooklyn and the South Bronx."

The Only Game In Town

After pulling the plug on renovations for David Geffen Hall, chairwoman Katherine G. Farley said that Lincoln Center's change in direction "was not a failure of financial support for the project." Nonetheless, the center's new approach, according to the Times, will be "less monumental and more incremental." What a novel concept!

I kid, but planners really can't be faulted for their drive or ambition, especially in a cutthroat environment like New York City. "There is no great city without a great concert hall" (to paraphrase a wise sage) and the philharmonic has been citing an "urgent need" to renovate its home since at least 1999. These are inherently complex projects, regardless of how many bells and whistles are attached.

And recent news notwitstanding—and depending on how one defines "success"—this model, for all its faults, seems to work. For every stripped-down Lincoln Center, there's an Asian Art Museum in San Francisco, which, despite being $90 million in the red, just received a $25 million donation from Yahoo! co-founder Jerry Yang and his wife Akiko Yamazaki for a $90 million renovation project.

Which brings me back to Geffen.

Expectations vs. Entitlement

His troika of massive legacy gifts—$100 million to Museum of Modern Art, $100 million to the Lincoln Center, and, most recently, $150 million to the LACMA—are all rooted in a distinct strain of Old World logic. It's assumed that these institutions will roll out ambitious projects and that patrons should support them, regardless of the larger philanthropic and political climate. It's always been that way. It's what arts patrons do.

It speaks to a kind of, well, entitlement.

"There is no great city without a great museum," he said regarding LACMA gift. "New York deserves to have the best concert hall for the Philharmonic. New York should have the best of everything," he opined in the aftermath of the Lincoln Center's change of plans.

You can debate Geffen's argument till you're blue in the face. But regardless of its merit, a growing number of donors, operating in an environment where art can drive social change, don't seem to be buying into it.