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Arts Center works to dig out from under 'Pharaohs' debt.

Money woes at the Arkansas Arts Center brought on by its exhibit "World of the Pharaohs: Treasures of Egypt revealed" are ancient history — or at least no longer news. It was April when a headline in the Democrat-Gazette declared the state's top arts institution "toppled" by a show that cost a lot of money and didn't generate a lot of revenue.

With the Arts Center's books seeing more sunshine than they have in 40 years, an examination triggered by questions following the sudden resignation of the Arts Center's director, the public now knows the Arts Center has a budget deficit of some $1.6 million. It owes its foundation, created to grow its endowment, $2.2 million. It will be in a hole for some time to come.

The Arts Center's leadership — board and interim director — is moving forward. A new deputy director of operations is working on next year's budget and a plan to pay back the foundation. The schedule of upcoming art exhibits and theater productions is firming up. Members of the board express optimism and recount expressions of support from friends anxious to put things right again.

But the financial curse of the "Pharaohs" lingers: Publicity about the Arts Center's financial affairs has harmed development, board treasurer Mary Ellen Vangilder reported at a meeting of the board in May. Clay Mercer, the development director, whose job it is to get sponsorships for exhibits, elaborated. "We promised things we did not deliver on," Mercer said, namely inflated attendance figures. "That's been publicly acknowledged and we've lost credibility."

But Lisa Baxter, who is organizing the Arkansas Center's biannual blowout fund-raiser Tabriz, said information can be a good thing for the public, "if we want them to feel ownership." With ownership comes support. The Arts Center needs the public's embrace. And the public needs the Arts Center.

The "Pharaohs" exhibit, from the Museum of Fine Arts, Boston, and Arkansas's first dedicated to ancient Egypt, was supposed to lead the Arts Center out of the financial desert in which it had been wandering and create a cushion for its future.

On the eve of the opening of the Arts Center's most expensive show ever — budgeted at $1.7 million — last August, Executive Director Dr. Ellen (Nan) Plummer likened the show to a "rocket engine" that would launch the AAC to being a "bigger and better art museum."

The rocket, it was thought at one time, would be powered by an estimated $2.6 million profit from the sale of 300,000 tickets and gift shop goodies. The show, planned since 2006, had done well in Canada and Idaho, the two stops that preceded the Arts Center's. Egyptomania, as materials prepared for potential sponsors called it, would surely spread to Arkansas.

But even as she predicted that the Arts Center was on the road to greater things, Plummer, and others paying attention to the region's museum-going climate, must have been worried that the rocket might fizzle. Because of the serious financial straits people were finding themselves in, the marketing department had as early as January 2009 begun to rethink how many tickets it might sell to out-of-towners. Then in May, the Dallas Museum of Art had closed its "Tutankhamun and the Golden Age of the Pharaohs" ("golden" being the operative word) with an attendance of around 620,000, far short of the 1 million it expected. Though the museum declared the show an educational success, Dallas arts writers made much of the shortfall. Golden sandals and other gilded goodies had not brought foot traffic to a big tourist city. The Arts Center had based its "Pharaohs" projections in part on the Dallas museum's expectations.

Though "Pharaohs" opened with a bang its first night, in January of this year, three months into the exhibit's run (which ends July 5), Plummer reported to her board that only 39,000 tickets had been sold, that accounts payable stood at $468,015, and that the museum had cut operating hours, cut 18 temporary staff positions, eliminated five permanent positions and gotten rid of the big circus tent — a $55,000 expense itself — at the entrance that it thought it would need to handle the crowds.

Bills were high, attendance low and on top of that, the Arts Center had gotten stiffed on a pledge of $500,000 it was counting on to pay its bills. It had been so sure of the pledge that it included it as revenue on its 2009 balance sheet, a legal practice that turned out not to be a hot idea. The check from Dubai businessman "His Essence, Mohammed bi Ali Abbar" was always in the mail. For months, Plummer had been imploring, diplomatically, board member Elgin Clemons, a Little Rock lawyer and Ali Abbar's contact, to hurry up the gift. In April 2009, nearly five months before "Pharaohs" opened, Plummer wrote Clemons that cash flow was "dreadful," the Arts Center had not been able to pay down its lines of credit from the Arkansas Arts Center Foundation, and "the arrival of Mohammed's gift would be a key factor in breaking even for the year." Nearly every subsequent month brought promises from Clemons and Ali Abbar's agents that the money was in the U.S. and on its way to Arkansas. Finally, when the money didn't show up Feb. 1 of this year — and when Clemons, too, dropped out of sight — the Arts Center's board of directors wrote off the gift.

As of June 1, 83,760 visitors had gone to see the "Treasures of Egypt Revealed," a number due in large part to the huge numbers of schoolchildren that turned out. Jeane Hamilton, a prime mover in the development of the modern Arts Center, told the Arts Center's board of directors in May that she hoped the press would take a positive note on their attendance. "These children are the ones who'll support the Arts Center in years to come." However, schoolchildren paid less to see the show than adults, meaning lower ticket revenues than expected. The show cost $1.9 million to put on; it had earned $1.2 million by the end of May, and donor contributions attributed to the show were nearly $150,000. "Pharaohs" had this success: It brought in 764 new members, increasing the Arts Center's membership by nearly 400 and bringing the total close to the level of membership in 2002, after the new galleries and atrium opened. A total of 349,980 people came through the doors in fiscal year 2010, around 80,000 more than the year previous.

The Arts Center's finances were already on shifting sands, analysts for the Arts Center Foundation determined after the Arts Center asked for an additional loan to pay its bills. After years of balanced budgets under former Director Townsend Wolfe, economic hard times had begun to erode the Arts Center's fiscal strength. Cash flow was so poor after the market crash in 2008, with development receivables at an all-time high of $400,000, that Plummer and members of the Arts Center's board of directors went to the Arkansas Arts Center Foundation, a non-profit that endows the Arts Center and owns its art works, to increase a line of credit it had by $600,000 to $1 million. Plummer said their message to Warren Stephens, foundation chair, would be "Foundation, the AAC is a good investment for you. Please be our banker."

The Arts Center now has three unpaid lines of credit from the foundation that add up to $2.2 million.

Lord Carnarvon, it is said, was cursed when he excavated in King Tutankhamen's tomb; he died shortly after its discovery. No one has perished at the Arts Center, where Hetep-Bastet and another mummy wrap up the exhibit in the final gallery of the "Pharaohs" tour. But director Plummer has resigned; Rocky Nickles, the deputy director for operations who the board now says was not giving it accurate information, was fired.

That the board is still looking into Nickles' accounting raises the question: Is there more to the problem than cost overruns from an expensive show at a financially shaky time? Is there money missing from the Arts Center's account?

Bob Birch, who has acted as a spokesman for the Arts Center's board of directors since Plummer's resignation and subsequent revelations, answered, "We don't see anything significant." But, he added, "We're still looking."

Some knowledgeable with how non-profits work have suggested that the board bears some of the blame for the Arts Center's financial situation. But Birch said the board had done its research on how "Pharaohs" played in other markets and was led to believe the show would be a success. And there was no way, he said, the board could have predicted the "severity of what happened" on Wall Street at the end of 2008.

Where "Pharaohs" first went wrong, a survey commissioned by the Arts Center suggested, was the ticket price, an off-putting $22 for adults. The Arts Center didn't need a survey to tell it that; marketing director Heather Haywood, concerned that the show was not "crazy busy" in its opening days, in October contacted the marketing head at the Dallas Museum of Art about the "Tut" attendance. Dallas' response: They should have offered ticket discounts earlier in the run of the show. The Arts Center followed suit with its own ticket discounts, on weekday afternoons and with coupons available online.

Several people have told the

Times — though all off the record; lips have been sealed tighter than the tomb when it comes to comment on the Arts Center's situation — that they'd already seen the "Tut" exhibit, which has made two national tours, and that had made "Pharaohs" less compelling. Others — including some of the Arts Center's biggest supporters — expressed a belief that "Pharaohs" just didn't fit the Little Rock venue.

But, interim director Joseph Lampo said, there was good response in 2005 to an exhibit based on history, "In Stabiano: Exploring the Seaside Villas of the Roman Elite." He said "Pharaohs" offered "an opportunity to provide education about something people have been intrigued about since Napoleonic days."

Just not intrigued enough. While "Tut" was an elaborate take on a celebrity — the mysterious Boy King — and his gold, "Pharaohs" is less sexy, with a scholarly focus on the daily life of the ancient Egyptians. Much of its artifacts are diminutive — amulets, scarabs and statue fragments — that are beautiful, but not showy. "We may not have had the bling of King Tut," Lampo acknowledged, but the Arts Center's show offers more in the way of information, with artifacts that span 3,000 years of Egyptian dynasties and accompanying lectures by archeologists and historians. Salima Ikram of Cairo, an authority on animal mummification who spoke in April at the Arts Center, told Lampo that the "people of Egypt would be clamoring to see some of the things in the show," he said.

As exquisite as some of the artifacts are — and there are truly some treasures in "Pharaohs" — the Arts Center found the exhibit lacking something the public here would demand: Mummies. Lampo arranged to supplement "Pharaohs" with two, from museums in Canada and Oklahoma. What the show lacked in gold would be made up for with bodies and sarcophagi.

It is not the first time the Arkansas Arts Center has been in trouble. Winthrop and Jeannette Rockefeller almost single-handedly supported the Arts Center after its transformation and expansion in 1960 from the former Museum of Fine Arts to an Arts Center with a theater and museum school. The Rockefellers began to pull the plug in 1967 when the Arts Center's budget exceeded its income by more than $100,000, a huge sum for the time. There was talk that the Arts Center would close unless it could get public support. At a press conference in 1968, board member Jeane Hamilton announced that it was "neither desirable nor proper" that the Arts Center had been financed by one family to the extent the Rockefellers had and it was time for the public to pay their way.

At the suggestion of Jeannette Rockefeller, the Arts Center hired Townsend Wolfe — who had traveled from his teaching job at the Memphis Academy of Arts to teach a watercolor class to several women of influence once a week — as its new director in 1968. Wolfe brought the budget in line and expanded the Arts Center's reach into the community. A Southerner who knew how to engage the rich, Wolfe turned the Arts Center around. He took risks, with avant-garde theatrical productions and art exhibits that a few considered provocative, and made the Arts Center inclusive, reaching across racial lines. He built the Arts Center's collection of works on paper, one of the strongest in the country and a smart strategic move financially as well as culturally, and he defined the Arts Center as a place that promoted contemporary fine crafts as well. In the 1990s, the Arts Center embarked on its largest capital campaign ever, raising $21 million to boost its endowment, renovate its building, update its theater and add three new galleries. The new gallery opened in February 2000 with more than a week of festivities and exhibits celebrating the Arts Center's rich repository of drawings ("Without Parameters: Reinstallations of the Arts Center's Permanent Collection") and its growing commitment to craft ("Living with Form: Art and Furniture from the John and Robyn Horn Collection.") More than 1,000 people joined the Arts Center that year.

The new wing proved to be such a hit that in January 2001, Becki Moore, then the Arts Center's top marketer, began to worry about how to sustain the buzz. She asked the board of directors, "Where do we go from here? How do we keep our members? How do we manage our success?"

Wolfe retired in 2002, at a time the Arts Center was taking a hit from the market plunge triggered by the Sept. 11 terrorist attacks. His was a tough act to follow for Nan Plummer, who came to town from Toledo with no Southern drawl, no penchant for Tiparillos (Wolfe's trademark), at a tough time. Over the next eight years, the city's contribution fell from $480,000 to $200,000. She had to close the Decorative Arts Museum in the Terry Mansion, where significant craft exhibits had found a home. During her tenure, the country suffered its greatest economic crisis since the Depression.

The Stephens family — first Jackson T. Stephens and now Warren and Harriet Stephens — are as closely associated with the Arts Center now as Townsend Wolfe and the Rockefellers were. Jack Stephens gave some much needed juice to the Arts Center's capital campaign in the 1990s with a $5 million donation, and loaned 21 pieces of French impressionist art from his own collection to hang in what would become the Jackson T. Stephens Gallery. His son, Warren Stephens, CEO of Stephens Inc., has been chair of the Arkansas Arts Center Foundation for the past 8 years. In 2008 and 2009, when Nan Plummer wanted help for the Arts Center, she contacted Warren directly. Harriet and Warren Stephens were the presenting donors of "Pharaohs," with a gift of $250,000. The Capital Hotel, owned by Stephens, was a lead sponsor (the only other was the Little Rock Convention and Visitors Bureau, which contributed $50,000 and an equal amount in in-kind services). So it's not a surprise, perhaps, that Stephens is sometimes thought to be calling the shots at the Arts Center.

The board of directors says he's not, and interim director Lampo describes the Arts Center's relationship with the Stephenses a "partnership," one it enjoys with all its major donors. The foundation "really tries to stay out of the operational issues" of the Arts Center, Stephens said.

At a recent board of trustees meeting, one member said she believes that people don't understand that the foundation is separate from the Arts Center. She said she'd been asked why the Arts Center, for instance, was paying former director Wolfe $150,000 a year. It's not — the foundation is, as Wolfe's retirement.

The foundation, created in 1972 and doubled during the Arts Center's capital campaign a decade ago, owns the art collection of the Arts Center and provides a yearly contribution to the arts center for operations, including curation. Its marketable assets — which do not include the artwork, Stephens said — stand at around $21 million.

Stephens said that at one time the foundation's yearly contribution to the Arts Center was not sustainable — 10 percent of its value. In recent years, giving has been at 6 percent. Stephens said it should be around 5 percent.

The Arts Center is a political subdivision of the city of Little Rock, its board of directors a city commission whose member appointments are rubber-stamped by the city's board. The city also owns MacArthur Park and the oldest part of the Arts Center's building. That relationship — and the fact that the city donates a sum of taxpayer money to the Arts Center every year — makes the Arts Center subject to the Freedom of Information Act, which rubs the board and foundation the wrong way. Because city support has become so slim, Stephens said "separation from the city would make sense at some level." He said the Arts Center might be eligible for more foundation grants without city ties, and would be relieved of having to comply with FOI requests, which has kept Arts Center staff hugely busy the past two months and made the Arts Center's problems public. But he doesn't foresee any moves right now to change the relationship. "We've got more pressing issues. We've got to focus on short-term stuff that needs to get done."

Stephens noted that attendance at the Arts Center has grown steadily in the past years and financial support has been significant. Its problems "are not much ado about nothing — there are definitely some issues there — but it's not anything that would make me feel differently about the future of the Arkansas Arts Center."

Stephens Inc. analysts have drawn up a payback plan that Warren Stephens says will make the foundation whole in under five years. Now, the Arts Center needs to figure out how to fill what looks like a half-million-dollar hole in the budget it's working on for the year that starts July 1.

One option: Impose an admission fee. Half the museums in the country charge some kind of admission. At home, the Museum of Discovery charges an admission fee, and the Historic Arkansas Museum charges a fee to tour its 19th century buildings. An admission fee is being debated at Crystal Bridges Museum of American Art, which Alice Walton is building in Bentonville, though spokesman Kendall Curlee said, "I can assure you that every effort will be made to keep any costs as low as possible." A fee makes financial sense: The American Association of Museums reported in 2007 that the median admission fee to American art museums was $7, but the median cost for each visitor was $35.98.

But the Arts Center was created to bring culture to a state that had little in the way of fine art and theater. "It has been an important part of our mission for a long time to be free and open to the public," interim director Lampo said, and he does not see that changing any time soon. "This is an art museum for the state of Arkansas. To be that and to be effective at that, we need to be free."

Another option: Add to the Children's Theatre lineup. The Children's Theatre, though it was slightly over budget last year, is successful and an extra play might bump up revenues, director Birch said. Also: Bring in exhibits that will actually make money and cancel those that don't. The Arts Center has, in fact, canceled art exhibits in the past because of budget considerations. But in choosing what to show, Birch said, the Arts Center can't compromise its artistic integrity; its mission is to broaden horizons, not generate revenues.

Curtis Finch, a former board member whose own art collection is likely to go to the Arts Center one day, said the Arts Center should "focus on our strength" — its contemporary drawings. "We can't be a big regional museum," Finch said. "In the past few years we have not done as well at building our collection of drawings as we did in the past under Townsend." Finch's sentiments were echoed by everyone interviewed for this story: The Arts Center must play to its strengths. Wolfe: "I hope they will continue to develop exhibits exploring their collection of drawings, help demonstrate the quality of what's there."

The Arts Center must also find new givers. "There has always been somebody out there we never heard of," Wolfe said. If donors from Northwest Arkansas start devoting their dollars to Crystal Bridges — Walton has told that region's bigwigs that she expects them to donate — then "find them in the Northeast," Wolfe said. "They pop up out of nowhere."

What sort of person should the Arts Center hire to replace Nan Plummer? "Somebody with a very high energy level who has a reputation of total trust," Wolfe said. Who'll make "quality expenditures," and "take the hard road," staging exhibitions that will "cause real thought." And "somebody who will work their ass off."

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