Museum of Contemporary Art San Diego hits hurdle in building sale

The Museum of Contemporary Art San Diego's former downtown San Diego space.

March 27, 2024 9:27 AM PT

A controversial plan revealed last week for the Museum of Contemporary Art San Diego to sell its satellite offices and exhibition space at the historic Santa Fe railroad depot could get derailed.

The city gave the extraordinary downtown property to the art museum 20 years ago as part of extensive redevelopment, still ongoing. A 2004 escrow document and transfer agreement with the museum, whose principal home is in the wealthy seaside enclave of La Jolla 13 miles north, includes no provision for selling the satellite property.

In a late February memo to staff, museum director Kathryn Kanjo noted the closure of the downtown satellite program in 2022 and wrote that the board of trustees had moved to list the site for sale or lease. The facility was posted on a commercial real estate website as available for purchase for $6.3 million.

However, the transfer agreement stipulates that, should MCASD ever decide to cease operations there, the city can take back the depot buildings — for free.

In response to questions about whether San Diego would reclaim the property or approve the sale, a spokesperson for the city told The Times in an email, “The city of San Diego is currently conducting a legal review of the agreement and shares the community’s concerns regarding the preservation of cultural uses of the property.” No time frame for the review was given.

Jonathan Glus, executive director of the city’s Commission for Arts and Culture, declined to comment.

The proposed sale may be related to a bank loan repayment due from MCASD this summer. In 2019, the museum entered into a $33-million construction loan agreement to finance final phases of the $110-million expansion of its La Jolla facility, according to posted financial statements. The expanded building opened two years ago. The loan matures in July.

The museum did not respond to multiple inquiries about the loan balance. MCASD’s 2022 tax return, the most recent publicly available, lists a liability of “secured mortgages and notes” at just under $21 million. A statement from a spokesperson in the museum’s business office said a three-year extension for the loan repayment has been secured.

The 2004 deal for the Santa Fe Depot property included two prime parcels at a site awarded a spot on the National Register of Historic Places in 1972. To mark completion of the Panama Canal, the Panama California Exposition, an ambitious trade fair for a town then numbering fewer than 40,000 people, opened in 1915. San Diego was the first U.S. port of entry for ships coming north after passing through the canal. A magnificent Mission Revival-style train station, the Santa Fe Depot, was built for the expo at Kettner Boulevard and West Broadway, the juncture between the city and the bay.

Nearly 80 years on, starting in 1992, the depot’s long-unused baggage building was periodically hosting works of art commissioned by inSite, an independent curatorial project emphasizing public art in the border area of San Diego and Tijuana. InSite’s binational exhibitions quickly drew international attention. Across the street at One America Plaza, the La Jolla museum leased an exhibition space the following year.

A decade later, MCASD sought to take permanent possession of its Santa Fe Depot neighbor. The Times obtained a copy of the transfer document, approved in June 2004. The city specified that the site be used “only as a museum or for other cultural purposes,” such as a library and art galleries. The agreement goes so far as to itemize elements of the planned satellite museum’s operations at the landmark site, including obligations for continuous operation, ongoing maintenance and regular public hours. Even a “reasonable admission” charge, pegged at $6, is proposed.

The document’s length and detail are evidence of the property’s critical importance to San Diego’s redevelopment plans. The National Register ranking a generation earlier was the result of a pitched battle between establishment interests, who wanted to demolish the station and rebuild from scratch, and supporters of the designation, who argued for a growing civic awareness of historic cultural infrastructure.

Exhibit C in the document shows just how crucial the museum project was for perceptions of San Diego’s future. The city wouldn’t let the site go without an ironclad, long-term guarantee that, should the museum fail to uphold its end of the deal, San Diego has “an exclusive option to acquire title” for the property “at no cost.”

MCASD spent more than $25 million refurbishing the site for museum purposes, making their commitment dear. Exhibition galleries were built inside the long-vacant 18,000-square-foot baggage depot. Dubbed the Jacobs building, it’s a single-story space with a wood-trussed ceiling and high windows for abundant natural light. Four works of art were commissioned expressly for the site.

Two more were purchased for the once-vacant adjacent lot, where the three-story Copley building for museum offices and art storage was newly constructed. Both the Copley and Jacobs structures were the work of Richard Gluckman, a fashionable New York designer known for a minimalist aesthetic and regarded as an “artists’ architect.” Gluckman also designed spaces for the Dia art center and numerous art galleries in Manhattan’s Chelsea neighborhood, as well as the Mori Art Museum atop a Tokyo high-rise, the Georgia O’Keeffe Museum in Santa Fe, N.M., and the Picasso Museum in Malaga, Spain.

The transfer document was entered into by representatives of MCASD; Catellus Development Corp., the developer working with the railroad; and San Diego city government, including the redevelopment agency. (Like all California civic redevelopment agencies, San Diego’s was disbanded 12 years ago following passage of the 2011 Budget Act). Two possible scenarios are cited in which the museum would be in default on the agreement, allowing the city to take back the property.

One is the clock. The agreement expires of its own accord on July 31, 2091. The date might seem arbitrary, but it roughly corresponds with the end of the 99-year lease for the museum’s gallery at One America Plaza. MCASD transferred that lease to a new Navy SEAL Museum earlier this month.

The other deal breaker is the satellite museum’s closure. “Any failure of museum to continuously operate for 60 days shall constitute a default,” the agreement says. MCSAD shuttered the satellite in 2022, when the building expansion at its La Jolla headquarters opened to the public. The default deadline is long passed.

The fate of the buildings is now unclear. The next move in downtown San Diego is the city’s. In La Jolla, it appears to have been the bank’s.