In its first five years of existence, Scottsdale’s Museum of the West has been recognized by the Smithsonian Institution, received accolades in local and national media and attracted the $300-million Museum Square redevelopment slated to be built next door in the next several years.
But, at the same time, the museum has failed to live up to the lofty attendance expectations set by management and city officials nearly a decade ago.
Entering its sixth year in 2021, the museum – sold by supporters as a boon for tourism and the downtown economy – has not come close to drawing in the crowds promised before the city spent $11.4 million to build it and committed millions more to keep it operational.
According to a City Council memo from February 2013, the museum was expected to generate an annual attendance between 87,000 and 118,000 by its fifth year of operation.
That memo was sent to Council before it approved a management contract with Scottsdale Museum of the West, Inc., the nonprofit that continues to manage the museum to this day under agreements that provide hundreds of thousands to millions of dollars a year in city funds.
In reality, attendance has never exceeded 75,394 in a single year, according to information provided to the Progress by the city.
The museum reached that peak in 2015-2016 before attendance slumped over the next few years.
According to the city, total attendance – including general admissions, groups, memberships, school trips and special events – fell to 53,125 in 2016-2017 and 41,176 in 2017-2018.
Attendance rebounded to 58,484 in 2018-2019 and nearly reached the previous peak a year later, hitting 73,994 in 2019-2020.
Museum Executive Director Mike Fox said attendance last year resulted from a revamped, data-driven marketing and social media strategy funded by a charitable donation and that the figures show the museum is starting to make headway in reaching those lofty attendance goals.
Former City Councilman Jim Bruner, chairman of the museum’s board of directors, acknowledged that Museum of the West has faced difficulties reaching those goals, but said the most recent attendance figures are encouraging.
“We’ve gone through a challenging five or six years from an economic standpoint and the local economy, but we think we’re coming out the end of the tunnel…the future is extremely bright and we’re very proud of our relationship with support from the city as well as people in the community and the tourist community,” Bruner said.
Still, attendance was more than 10,000 off from the 87,000 minimum expected by city officials in 2013 and even farther from reaching the “mid-range estimate rounded to 103,000 in a stabilized (fifth) year of operation” cited in the council memo.
A report by a third-party consultant in 2013 also projected the museum would earn 45 percent of its total revenue through operations like ticket sales by year five with the rest coming from contributions from the city and other donors.
According to its most recent tax filing, the museum earned about 25 percent of its total revenue in 2019.
At the same time, the museum has been lauded for its programming, and was named a Smithsonian affiliate in 2015. True West magazine named it the top western art museum in the nation in 2016.
And the city has continued to make a significant financial investment in it.
Beyond the initial $11-million capital investment, the city committed up to $400,000 in donation matching funds each year since 2013 from the city’s tourism development fund, which is funded by taxes on hotel stays.
Fox said the matching funds provided by the city pay for fixed costs like utilities, staffing and security.
Scottsdale also paid $380,628 for a new museum exhibit in 2016 and $500,000 to fund education programs in 2017.
The Museum also received a one-time COVID-19 relief grant from the city last year worth $884,663, the single largest grant doled out as part of the city’s Arts and Culture Relief Grant Program.
According to the museum’s tax filings, the city paid $3.8 million between 2015 and 2019, accounting for about 31 percent of the organization’s overall $12.4 million revenue during that span.
On July 1, Council approved a new contract that will provide the non-profit with a $250,000 management fee in addition to the $400,000 in donation matching funds.
Karen Churchard, the city’s director of tourism and events who oversees the museum contract, said the amount of that management fee is not set in stone and will have to be requested by the museum and approved by Council on a year-to-year basis.
“It does offer the opportunity annually to make a request but does not obligate the city to do so,” Churchard said.
The new contract also addressed several concerns brought up in a city audit last year.
The audit found that from 2014 to 2019, the city paid approximately $77,000 to cover utility costs in administrative offices that were supposed to be covered by the museum. The city also paid $1,500 for maintenance that was supposed to be paid by the museum
The new contract specifically states the museum operator is responsible for all utilities in the building.
“Museum of the West was supposed to be paying for internal and external APS utilities, which they assumed they were, but the audit found that they were actually not being billed for exterior,” Churchard said, adding:
“Long story short, we don’t have a way to split the meter, so the new contract says the city will pay for external lighting and they will just pay for internal.”
Critics have argued that the museum is the latest example of a tax dollar giveaway by the city to a private organization.
Resident activist John Washington has opposed the agreement since the museum’s inception and is a longtime critic of similar public-private partnerships pacts, including contracts with Scottsdale Arts and the PGA Tour at the TPC Scottsdale golf course.
“In general, I think it’s a bad idea for the city to be involved in ventures like this,” he said.
Washington argued that these types of deals are too influenced by politics and campaign contributions.
“It doesn’t serve a very well-defined public need, and anytime you get into what they like to call a ‘public-private partnership’, it’s just a recipe for fleecing the taxpayers,” he said.
But supporters say the city’s investment in the project is well worth it and the benefits extend well beyond attendance.
Bruner said the museum benefits the downtown art galleries that surround it that half of the museum’s visitors are from out of state.
He said the museum is also a benefit for local residents in a city with a long history as an arts community, going back to 1930s and 1940s before Scottsdale was even incorporated.
“The arts are a part of Scottsdale’s DNA, and people know that and I think they support their arts community,” Bruner said.
Bruner recalled conversations with beloved former Scottsdale Mayor Herb Drinkwater during their time on City Council.
“Herb thought Scottsdale, the West’s Most Western Town, needed something to show to the tourists, primarily from Europe at that time, what the west was all about,” Bruner said.
He said civic leaders began brainstorming ways to showcase the region’s western heritage.
Bruner said he and other supporters started the nonprofit around 2007 with no building, no art and no money. He said gathering those funds was difficult as the country battled through the Great Recession.
Bruner said the best thing the organization did during that time was hire Fox, who previously led the Heard Museum in Phoenix and helped start art institutions in other parts of the country.
Tax records show Fox earned annual salaries between $29,467 and $195,000 between 2008 and 2011 and took no salary from 2012 to 2013. After the city approved the contract, that salary rose from $137,500 in 2014 to $321,643 in 2019.
Bruner said that first contract with the city was critical in attracting donors, because of the city’s commitment to provide up to $400,000 in marching funds.
“The match goes back to when we first opened, because we were a brand-new museum that didn’t have any substantial donor base and, like any arts group, you need some help and some support,” he said.
He added, “But equally as important, we could tell people, potential donors, because they ask ‘What’s the city’s role? Does the city support arts in the community?’”
Tax documents show that outside contributions averaged about $186,000 per year from 2007 to 2012. That rose to an average of over $1 million per year after the city matching program went into effect.
But critics like Washington argue that the average Scottsdale taxpayer is not seeing a return on the city’s large investment in the facility.
“There’s no benefit to the average Scottsdale taxpayer of having that facility there and they knew it,” Washington said. “They wouldn’t have come to the city to ask, or beg for money, or land or whatever the case may be if they thought they could do it on their own, but they those guys knew that it was a loser from the beginning, and it would never be the attraction they sold it as the city council.”
He also criticized the fact that the payments in the museum contract and similar city deals aren’t attached to any specific performance metrics, so the entities have no incentive to appeal to a broader base.
The new contract includes a reference to “performance measures” the museum must meet but doesn’t define them.
Fox said the museum is required to produce a strategic plan and five-year goal and report to the city on how it is progressing towards achieving those goals.
That report will include information about all programs and exhibitions shown by the museum, all artwork owned or on loan, the growth of the museum’s library, and how the museum is attracting new visitors and providing programming in the community.
Bruner disagreed with the negative assessment, arguing the museum attracts tourists who stay in local hotels, restaurants and shops.
He also said residents value the presence of a world-class museum in their city.
“A city is more than just streets and sewers and fire and police,” Bruner said. “Those are obviously very important, but it’s other amenities that make Scottsdale so special, that my wife and I have lived here for 52 years.”
He compared the museum to other city services that may not turn a profit but provide a benefit for citizens.
“We have a great parks system and a great library system,” Bruner said. “I’m sure there are many people who have never stepped foot in a library or a park, but that’s just one of the nice amenities that makes Scottsdale something special.”
Bruner also said Fox and museum staff have done a good job constantly bringing in new exhibits and attractions like the new exhibit featuring the work of renowned photographer Edward Curtis that opens in October.
Fox said the museum is averaging nine new or updated exhibits annually.
It’s unclear whether the city planned to financially support the institution in perpetuity or simply be a source of start-up cash until the museum became self-sufficient.
“My feeling is that a museum needs support, so we want to make sure it’s successful,” Churchard said. “When I look at some other cities and entities nationally…it’s not uncommon at all to have government subsidy or support, whatever you want to call it, to make it self standing.”
The 2013 Council memo does not explicitly state how long the city would support the museum, though some language did suggest the city’s financial commitment was only for the first five years.
According to the memo, “the project’s long-term success would enjoy a significantly higher assurance if the city provided some supplemental operating support during the first five years.”
But Scottsdale’s Museum of the West receives relatively high level of government support when compared to similar but more-established institutions in the Valley.
For example, in the Phoenix Art Museum, which was built using private land and funds in 1959, derived just eight percent of its revenue from government sources in 2019-2020, according to its tax filings.
The Heard Museum received an even smaller cut at just about two percent.
Museum supporters would point out that those museums were started by well-funded philanthropists and have had decades to attract new benefactors.
“We started this institution without one work of art that we owned and without one benefactor,” Fox said, noting that most similar museums are started by a major donor who already owns a collection they want to show off.
Bruner said the city should have some sort of ongoing financial commitment to the museum.
“The public in Scottsdale supports the arts – now that’s a basis,” Bruner said. “We never, ever thought that the city would be our sole source of support; we’ve done everything from selling cookies in the lobby, so to speak, to raising money and fundraisers, but it’s a good partnership between the city and the public and the private sector.”
The new contract dramatically shortens the potential length of the city’s commitment.
The old deal approved in 2013 was set to expire in 2023, but it gave the non-profit the power to extend the deal for up to an additional 30 years without the need for city approval.
Under the new contract, the agreement expires in five years with the option for one additional five-year extension with the agreement of both parties.