An eccentric 104-year old woman left her $100 million Santa Barbara mansion to a foundation to “foster the arts”. Instead of benefiting many deserving existing arts organizations, her fortune will be tied up in a money pit property which will end up as a tourist attraction. The property should be sold and the income generated from its endowment used to foster local arts organizations.
Courtesy Christie’s
White elephant (n): a possession whose cost, particularly that of maintenance, is out of proportion to its usefulness.
Huguette
An old lady who lived in seclusion playing with dolls much of her life left her $100 million Santa Barbara mansion that she hadn’t visited in 60 years to a private foundation formed to foster and promote the arts.
Huguette Clark’s estate, Bellosguardo, is a 23-acre bluff-top ocean-front East Beach property across from the Andree Clark Bird Refuge (which was funded by the Clark family and named after her sister). It is one of the most valuable pieces of residential property in America.
Huguette inherited a large fortune from her father, a successful entrepreneur and, later, senator, who made a fortune in mining and railroads. She died in 2011 at 104 years of age. Her estate was valued at $300 million. While highly eccentric, she was a generous person bequeathing money to the Corcoran Gallery of Art as well as bestowing Bellosguardo to a foundation she directed to be formed after her death. After years of litigation, Bellosguardo was finally transferred to that foundation.
Huguette was strange, a recluse who shied from people. For most of her life she lived in seclusion in her elegant Fifth Avenue apartment in New York City. She spent the last 20 years of her life residing in Beth Israel Hospital in New York. She hadn’t visited Bellosguardo since perhaps the 1950s. Yet she kept Bellosguardo staffed and maintained as if she would turn up on the spur of the moment. And, it was zealously kept off limits to prying eyes.
The story of Huguette Clark is a fascinating one. Bill Dedman, a Pulitzer Prize-winning investigative reporter, co-wrote a wonderful book about Huguette, Empty Mansions: The Mysterious Life of Huguette Clark and the Spending of a Great American Fortune. The book details her life, especially the later years, and the questionable practices of those to whom her care was entrusted.
The Bellosguardo Foundation
The purpose of this article is not to detail Huguette’s story. Curious readers are referred to Bill Dedman’s book. Also, there are articles in Wikipedia outlining her story.
Also, the purpose of this article is not to criticize the Bellosguardo Foundation. Its board members are all well intentioned, generous, experienced people entrusted to carry out Huguette’s wishes. I am aware there has been criticism of a perceived lack of progress in getting things rolling, but they recently held a gala fundraising event at the estate, which reportedly sought to raise $500,000.
My critique is that Huguette’s plan for Bellosguardo is ill-conceived, unnecessary, and a drain on Santa Barbara’s pool of charitable resources. The estate is a huge white elephant.
The Plan
In her will Huguette directed that Bellosguardo be distributed to a foundation “for the primary purpose of fostering and promoting the Arts.”
According their foundational documents and IRS application, the Foundation intends to utilize the estate as a kind of museum to share Bellosguardo with the public. They say it is an “historic residence” that “holds within it an extraordinary treasure of art, furnishings and other items of inherent historic, artistic, and educational value”. They also plan to fund other arts organizations, which, I assume, depends on how much money they will have. They also envision things like having outdoor concerts on the lawn in conjunction with the Music Academy or having lectures, exhibitions, and other arts events.
Recent reports suggest that Foundation chair, Dick Wolf of Law & Order fame, would like to see Bellosguardo as something similar to New York City’s famed Frick Collection, housed in Henry Clay Frick’s Gilded Age mansion on 5th Avenue. Frick, a partner of Andrew Carnegie, assembled a large art collection, including three Vermeers.
The White Elephant
It all sounds good but it is a waste of money.
Before I am hissed off the stage, you should know that I do have some credentials in these matters. As a lawyer I had formed a number of nonprofit organizations, so I know a bit about that. I also had the privilege of being involved in the Santa Barbara Museum of Art for 30 years, including 10 years as a member of their Board of Trustees and as founder of the Museum’s Friends of Asian Art.
With that said, I believe Santa Barbara doesn’t need a venue like this and the estate ought to be sold and the money used to fund other arts organizations in Santa Barbara. And, yes, I think that is feasible.
There is no doubt that Bellosguardo is a premier chunk of real estate, probably one of the most desirable in Southern California. Its spectacular 23 acres sit on a bluff overlooking the Pacific Ocean. It’s my informed guess that the property is worth $100 million (it was valued at $85 million in their IRS documents).
Despite the claim that the residence may have historic value, the reality is that it is a money pit. The Foundation admits that it needs to sink a lot of money into “modernizing the Property’s mechanical, electrical, and other systems, i.e., HVAC and climate control system, restroom and plumbing system, installing and/or updating elevators, updating windows, etc.”
Yes, etcetera, etcetera. There are other not so minor improvements required such as seismic retrofitting, handicap (ADA) modifications including new restrooms, and offsite parking facilities. If they want to be a “museum” whereby other museums will allow displays of their art, the Foundation will have to make upgrades that meet rigid standards such as those set by the American Alliance of Museums. It’s not just climate control, but sophisticated museum grade lighting, security, and fire suppression systems. These things are expensive. The bottom line is that you just can’t invite the public in and call yourself a museum without jumping through some very expensive hoops.
What would this cost? I don’t know. I do know the Santa Barbara Museum of Art is doing a major renovation which is budgeted at $50 million. Since not much has been done to Bellosguardo other than required maintenance for the past 70 years, $25 to $35 million, or more, is not an unreasonable guess as to cost.
Then there is the operating budget. It depends on what they do, but museums aren’t cheap to run. Most museums raise money for an endowment fund, the income from which is used to support operations. They will need to do substantial fund raising.
None of these requirements are insurmountable and they have a powerful board of directors who are good at raising money. But is it worthwhile?
The Reality
I haven’t been on or in the property, but my information from articles, photos and those who have been there leads me to question the Foundation’s assertion that the residence is historically significant. I also question that “it holds within it an extraordinary treasure of art, furnishings and other items of inherent historic, artistic, and educational value”.
Bellosguardo is not a Santa Barbara-style mansion. Unlike other wealthy easterners who moved here and built Spanish Colonial styled estates designed by the likes of George Washington Smith, the Clarks decided to plunk 5th Avenue into our midst. It is a limestone edifice that would have fit in on “West Egg”, Long Island (see The Great Gatsby) during the glory Beaux-Arts days of great mansions. It’s not exactly unappealing but it’s not very interesting or architecturally significant or Santa Barbaran. But that’s just me.
The other thing is, to the best of my knowledge, all the good furniture, art, and furnishings were sold off by Christies back in 2014. The sale yielded almost $8.5 million. The notoriety created by Empty Mansions created a lot of public interest. Even Huguette’s mopey self-portrait sold for well over its $5,000 estimate ($16,250). In a separate sale, her Monet, a Water Lilies painting, sold for $27 million. Empty Mansions is pretty empty.
Bellosguardo, pre-sale
After the litigation subsided, her estate went to the relatives ($34 million), the lawyers ($25 million), and the Corcoran Gallery. The Foundation received Bellosguardo and about $7 million.
There are those who can and will argue that the residence is historically significant and perhaps there are items of historic, artistic, and educational value within. But, at what cost or value to Santa Barbara?
My point is that $100,000,000 would go a long way to help “foster the arts” here. But that won’t happen if all that capital is tied up in this white elephant. In essence, it would be a $100 million tourist attraction.
A Solution
I have a solution: sell it. Use the money to support arts organizations here in Santa Barbara. Wisely managed, the fund could yield $7-$8 million a year and fulfill Huguette’s wishes … forever.
If it isn’t sold, then many millions will need to be raised by the Foundation to bring it up to proper standards and millions more will be needed to run it. To get those funds, they will be competing for the same pool of funds that other Santa Barbara nonprofits are going after.
And it’s not just money that they will go after. If they intend to create an art collection they will be competing with other arts institutions here for the art collections of art patrons who may wish to leave their art to local museums.
You might ask, well, doesn’t the will prevent the sale of Bellosguardo? No. There is nothing in her will or the Foundation’s charter preventing the sale of the estate. In fact its bylaws specifically allows them to sell the property with the vote of three-quarters of the board.
Her will, as revised by the court, says:
“FOURTH:
There shall be formed a charitable organization described in and meeting the requirements of Section 501(c)(3) of the Code, which shall be named the Bellosguardo Foundation (the “Foundation”). The Foundation shall be incorporated as a New York not-for-profit corporation for the primary purpose of fostering and promoting the arts … [Emphasis added]
I give, devise, and bequeath to the Foundation (i) my real estate in Santa Barbara, California, located at 1407 East Cabrillo Boulevard, known as ‘Bellosguardo’ …”
In the settlement with her relatives the New York court ruled:
“…[T]he Foundation shall also conduct such activities and programs for the benefit of the public as the board of directors of the Foundation may properly determine. The Foundation shall also conduct such grant-making activity as the board of directors may determine, with an emphasis on arts organizations based in California and New York, and such other arts organizations as the Decedent supported during her lifetime.” [Emphasis added]
Their application for charitable foundation tax status confirms it’s purposes:
“The Bellosguardo Foundation Inc. (the “Foundation”) was established to be operated exclusively for charitable, educational, literary and other purposes within the meaning of section 502(c)(3) of the Internal Revenue Code of 1986 (the “Code”). In furtherance thereof and consistent with the charitable purposes expressed in the Last Will and Testament of Huguette M. Clark, namely to foster and promote the visual, audio, literary, performance, and other arts, the Foundation plans to open … Bellosguardo to the public.”
That’s it. It doesn’t say keep Bellosguardo, it just says here’s Bellosguardo, support the arts.
Positive Outcomes
If it is sold, then what happens?
- The Foundation would have a huge endowment fund, perhaps as much as $100 million, with which to support arts organizations here in Santa Barbara.
- It’s endowment would yield at least $5 million a year, and, with good management, perhaps as much as $7 to $8 million.
- It would be spared the necessity of continually raising money from our community; rather, it would contribute money to Santa Barbara.
- Santa Barbara’s limited pool of charitable funds would not be further stretched with the added drain of upgrading and keeping Bellosguardo going.
- Some billionaire would likely buy Bellosguardo and restore it on his/her dime, not ours.
- The City would get about $1 million per year in property taxes from the property, something they wouldn’t get if the Foundation, a nonprofit entity, retains ownership.
- In private hands, the burden on the property and its neighbors of a tourist attraction with consequent traffic and noise would be eliminated.
Huguette’s Wishes
I hear that Foundation chair Dick Wolf is a pretty nice guy and he has done some nice things for Santa Barbara including a major donation to Moxie. I am sure the other board members likewise have good intentions. But once one gets past the romance of Empty Mansions and Huguette’s story, you have to question the reality of Bellosguardo.
Santa Barbara is not New York much less Los Angeles. We are a small town steeped in a gauzy vision of our past. We have been fortunate to attract wealthy patrons who have founded and enriched our cultural institutions. We are lucky to be able to pull above our weight. But in a small, even wealthy, town there is still a constant scramble for funds. The Santa Barbara Museum of Art, for example, has yet to fully fund their remodel after a four-year capital campaign.
Huguette’s vision for Bellosguardo is a folly; it is not realistic and it reflects her simple and naïve character. It is clear that she wanted to promote the arts, but locking up $100 million of scarce capital in a white elephant is not the best way to do that. The fact that she gave the trustees the power to sell Bellosguardo means, at some level, Huguette understood that.
And that is exactly what they should do to carry out Huguette’s wishes to promote the arts and benefit our community.
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