In a recent post, we looked at how big-time private art collectors are increasingly donating work to hospitals, public libraries, and even office lobbies. The logic is simple: better those places than gathering dust in the storage basement of some giant museum that has far more art than it can exhibit.
Then there's the case of billionaire J. Tomilson Hill, whose private collection is estimated at $800 million.
Proving that the simplest course of action may also be the best course of action—"We’ve got so much art in storage," he said—Hill is starting his own private museum.
According to the New York Times, Hill and his wife Janine established the Hill Art Foundation, for which a new two-story gallery on West 24th Street in Chelsea will be named. The space, which is set to open in the fall of 2017, will become one of the few private galleries in New York City largely made up of a personal collection. The Rubin Museum of Art, also located in Chelsea, orginated in much the same fashion. (Donald and Shelley Rubin had spent decades assembling a collection of Tibetan and Himalyan art—which they rightly surmised would never get much attention in an established museum.)
Meanwhile, in Los Angeles, the Broad recently opened to showcase the personal art collection of Eli and Edythe Broad.
What, exactly, compelled Hill to go private? And can this decision serve as a harbinger of things to come in the increasingly lucrative and competitive private art world? After all, as we've reported, a number of billionaires have both vast art collections and a keen interest in philanthropy, with existing museums offering a limited capacity to absorb their work. Will those interests increasingly merge to create a new era of personal art museums?
We'll come back to the big questions in a moment. First, let's talk about Hill. When you drill deeper into Hill's professional career, this move isn't entirely surprising. As the vice chairman at the Blackstone Group with a net worth of $1.2 billion, he's likely rather adroit at cutting through red tape and navigating bureaucracy. A businessman by trade, he's drawn to performance metrics and results. Why gum up the works by donating the work to overstocked museums when he can do it himself?
Meanwhile, Hill doesn't seem to be any kind of narcissist, even if he is building a private museum. Among other things, he is concerned about the dire state of arts education in public schools. "They’re cutting out arts programs," he said, channeling his inner IP reader. As we've noted in the past, according to a 2014 report by the New York City comptroller, many public schools in the city do not offer any kind of arts education and the lack of arts instruction disproportionately affects low-income neighborhoods.
The Hill Art Foundation plans to become a partner in educational efforts with institutions like the Studio Museum in Harlem and the Metropolitan Museum of Art, where Hill serves on the board. (More on the Met in a second.)
As to the latter question,
Moving forward, will other billionaire art collectors follow Hill's lead? As long as there are billionaire art collectors, we wouldn't be surprised.
What's more, Hill's decision goes against the grain of what we're seeing across the high-stakes world of New York City arts philanthropy. He didn't cut a massive check to fund a glitzy—and risky—capital project, adding more credence to our theory that he's a devout IP subscriber (although our Web analytics guy "can't say for sure").
"I’m not into wings," Mr. Hill said. "I'm into art." Lord knows we're going to get a lot of mileage out of that zinger.
Which brings us back to the Met. As a trustee at the cash-strapped institution, the Times notes that Hill could conceivably christen that museum's planned contemporary and modern wing, for which the institution needs to raise money. Hill is aware of this, noting, "the Met needs everything I've got," he said.
But it's not meant to be. At least for now.
Oh, and there's a third reason behind Hill's decision, and he's being completely transparent about it. "I can shelter capital gains," he said. "It would be the same as if I gave the art to a museum."
If you care to take a deeper dive into the tax implications at play here—in short, some private museums have been criticized as tax-exempt exhibition spaces that allow collectors to deduct the full market value of the art, cash, and stocks they donate—click here to check out similar grumblings surrounding Peter Brant and the Brant Foundation.