SEATTLE—JPMorgan Chase has agreed to give the Seattle Art Museum (SAM) $10million over the next five years.
The agreement puts an end to months of speculation following JPMorgan Chase’s acquisition of the assets of bank Washington Mutual from the Federal Deposit Insurance Corporation last September. Observers had been waiting to learn the fate of a real estate deal under which Washington Mutual had been renting space from the museum.
According to a Chase statement released on Jan. 22, “JPMorgan Chase will not be assuming Washington Mutual’s lease with the Seattle Art Museum … JPMorgan Chase and SAM will be working together to coordinate leasing activities and identify possible tenants for the space.”
The museum’s 2007 expansion, designed by architect Brad Cloepfil, added to the original building designed by Robert Venturi, and was financed in part by leasing 240,000 square feet of office space in the enlarged building to Washington Mutual. The museum and the bank had previously occupied separate, adjacent buildings.
Washington Mutual owned the top four floors and rented eight floors in Cloepfil’s now 16-story building from the museum; SAM occupies the remaining four. Eventually it will occupy 12 floors, which, including Venturi’s original 150,000 square feet, will give it up to 300,000 square feet of additional space.
At the time of Chase’s acquisition of Washington Mutual’s assets, SAM officials said that a change-of-control provision in its lease agreement with Washington Mutual would protect the museum in case the bank was sold. However, that provision was not binding in the event of a bank failure.
The grant from Chase, which is not obligated to make any payments to the museum at all, helps to soften the blow to SAM’s budget of the $4.6million in lost annual rental income (the total amount is closer to $5.8million when operating costs are included).
“We want to be a good corporate citizen,” said Chase spokesperson Darcy Donahoe-Wilmot. “We appreciate the Seattle Art Museum’s major role in this region.” Mimi Gates, SAM’s director, said she was “thrilled” with the bank’s generosity.
SAM’s annual operating budget is $26million, none of which comes from rental income. All of the money from the lease was to be used to pay off the museum’s debt from the expansion, which is $59million. The museum board has hired a developer to find a new tenant.
Museums across the country have been hit hard by the deepening recession, and SAM is no exception. Spokesperson Cara Egan said the museum’s endowment is down 27 percent, to $77million. The number of memberships is holding steady at 40,000, and admissions were lower than expected during the summer, but were picking up again in the fall, she added.
Besides its downtown headquarters, SAM owns and operates the Seattle Asian Art Museum in the city’s Volunteer Park and the Olympic Sculpture Park on the waterfront.