November 1, 2011; Source: Austin-American | While some museums are cleaning up with charitable donations (especially from the very wealthy), others are having a tough time piecing together sustainable budgets based on shaky blends of fees, sales, and charitable donations. That may have been the circumstance with two Austin, Texas museums—Arthouse and the Austin Museum of Art. Earlier this week, the boards of both institutions approved a merger. The interim director of the AMOA will be interim director of the newly merged entity for the time being, with a national search underway aiming to fill the position permanently in three to six months.

From the outside, it’s sometimes difficult to grasp all of the financial aspects of mergers, but some facts of the AMOA and Arthouse economics tell a story. For example, pre-merger, the AMOA budget was $3.1 million and Arthouse’s budget was $1.1 million. The budget for the new organization is going to be $3.2 million, but part of the excitement (and maybe a reason for a combined budget smaller than the two pre-merger budgets) is that the new organization will be debt free, including paying off Arthouse’s $3.2 million debt on a renovation of its building. Last year, AMOA gave up on a three-decade quest to build a museum downtown and sold the site it owned for $21.75 million, $5 million of which will act as seed money to subsidize a new gallery and sculpture park, and $15 million will go into operations. 

The merger appears to end some turmoil at both institutions. The AMOA decision to scrap the new building downtown—and with it $16 million in architectural work—left supporters concerned about the merger’s future direction. Arthouse, in the meantime, was having trouble raising money for operations and for paying the debt on its $6.6 million building.

The uncertainty in both institutions is addressed by the decision of both to merge, giving a new direction to AMOA and resolving for the moment the financial challenges facing Arthouse. An unusual historical note behind the merger is that in 1911, the two organizations were one: the Texas Fine Arts Association. In 1961, the part of the association linked to the Laguna Gloria mansion, which had been donated to it two decades earlier, spun off to become a separate organization, and when it moved downtown, in 1997, it became the Austin Museum of Art. In 2002, the part of the association that remained after the AMOA departure renamed itself Arthouse. So, in the end, the merger brings together two art museums that might have been destined to be one institution all along.—Rick Cohen