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By Newsweek Editors
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The modern-art coterie likes esthetic innovators, but not institutional ones. Ever since Thomas Krens, 45, arrived as director of the Guggenheim Museum in 1988, he's been a magnet for criticism. In addition to restoring and expanding the landmark Frank Lloyd Wright building on Fifth Avenue, Krens (a former art-history teacher at Massachusetts's Williams College who also has an M.A. in management) proposed opening a Soho branch of the museum, engaged Pritzker Prize architect Frank Gehry to create another Guggenheim in Bilbao, Spain, and sponsored Austrian architect Hans Hollein's vision of a Salzburg branch literally carved out of rock.
By the late 1990s, when it's all "on line," as Krens, a computerphile, likes to say, the multinational Guggenheim will be perhaps the most powerful modern-art museum in the world. It'll have space galore, and the clout to offer shows to blue-chip contemporary artists who can build their reputations in several countries at once.
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Such grandiosity is expensive and risky. The Wright redo and Soho sequel will cost at least $60 million-about twice as much as the museum's endowment. To finance the project, the Guggenheim issued $54.9 million worth of bonds, backed only by a letter of credit from the Swiss Bank Corporation, in 1990. To raise money to pay off the bonds, the museum will announce a capital campaign in the future. Krens wants to jump-start it by "marketing the two major naming opportunities" (i.e., getting big bucks in return for having the restoration or addition bear the name of the donor). But aside from a few million earned by renting art to foreign museums while its own plant was under construction, the Guggenheim is running mostly on '80s optimism about vastly increased ticket sales and giftshop receipts. If the Guggenheim begins to stagger under its debt, will its creditors start laying claims to the art it owns? Krens says no art serves as collateral.
The Guggenheim's New York reincarnation may seem like a roll of the dice, but in Europe, Krens has tried to spread the risk. Defending his vision of a multinational museum, Krens says he moved cautiously. He says Basque officials approached him first and that he told them that off-the-beaten-path Bilbao was a bad place for a museum. Then he proceeded to cut a deal in which the Basques will build and operate the museum--and pay the Guggenheim $18.9 million for its name, art and expertise. A similar deal is now being worked out with Salzburg officials.
In Bilbao, the Guggenheim produced a feasibility study that notes, among other things, that "at the admission price [of] seven dollars per adult, most people are relatively price insensitive." Some critics sneer at such a bottom-line, commercial approach, accusing Krens of just being a merchant. In a world of dried-up public funding, where prominent art collections are regularly lost to the auction block, Krens may be right about the tactics necessary for art museums to survive. But if he is wrong, and the Guggenheim has bitten off more than it can chew, Krens's museum may end up the Olympia & York of cultural institutions.
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