When the Terra Museum’s door slammed shut forever last week, the reverberations were felt down the street at the Art Institute. According to folks at the Terra, the closing of the boutique museum on North Michigan led to two big changes at the grander institution. Beginning in January, 50 of the Terra’s most valued paintings and 350 works on paper will be ensconced at the Art Institute on long-term loan. The combination of the two museums’ holdings will create one of the world’s best collections of American art, Terra officials say. But before it could happen, the Art Institute had to undergo the museum equivalent of an extreme makeover. Under its old setup, works from the Terra collection, which runs up to about 1940, would have been split: art made prior to 1900 would have gone to the American collection, 20th-century work to the department of modern and contemporary art. And that would have been a deal breaker. “We said we wouldn’t do it under those circumstances,” says Terra Foundation chairman Marshall Field V. “So Jim Wood gave the American department all the pictures up until World War II.”
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Whack. Instead of splitting the Terra collection, former Art Institute president James Wood (who retired this fall) took a cleaver to the 20th century. Last February the Art Institute announced that it would spin contemporary art off into a new department that includes everything from 1950 on. At the same time the cutoff for work in the American and European collections was moved up from 1900 to midcentury. That meant the Art Institute’s strong holdings in modernism, a distinctly transcontinental movement, would be divided by continent and dropped into the dustbin of history, along with colonial portraits on the one hand and medieval altarpieces on the other.
Meanwhile, there’s plenty of buzz about the Terra’s Chicago real estate, three buildings–one of which has landmark status–on North Michigan Avenue. The foundation, which conservatively has about $420 million in assets, is likely to stay in its offices above the museum for at least a year. CFO Donald Ratner says there are no immediate plans to sell the buildings; investment income from the proceeds of a sale wouldn’t bring in as much as the rent from current tenants Starbucks, Hanig’s Footwear, and Garrett Popcorn Shop. The roughly $3 million a year that will be saved on operating the Chicago museum will be funneled into grants and programming. And those messy legal battles stemming from an attempt by founder Daniel Terra’s widow to move the collection and the foundation to Washington, D.C., may finally be out of the way. A recent Supreme Court refusal to consider a settlement appeal ended one, and Ratner says they’re close to resolving another suit as well as a dispute over the foundation’s liability for about $1 million of Judith Terra’s legal costs.
