How do you pay for a new museum?Posted: June 16, 2011 In these somewhat strained economic times, finding funding for new cultural institutions can seem like reaching into an already empty pot. But that’s no problem for Eli Broad, philanthropist, millionaire, and founder of the as-yet-unbuilt Broad Museum slated for opening in 2013 near the Disney Concert Hall and Museum of Contemporary Art on Grand Avenue in downtown L.A.
In fact, the Foundation announced this week that they will be selling $150 million worth of bonds to finance and construct the infant institution.
Ken Naehu, a portfolio manager at Bel Air Investment Advisors in Los Angeles, said he would expect the deal to get a great reception from the market. He said the Broad bonds appear similar to the highly rated J. Paul Getty Trust bonds that are backed by an endowment and at times trade like pre-refunded bonds or better.
“In this type of marketplace where a lot of investors are putting yield aside for safety or security, those are the types of bonds that are sought after,” according to Naehu.
The bonds, rated Aa1 by Moody’s Investors Service, will be sold through the California Infrastructure and Economic Development Bank.
Eli and Edythe Broad have pledged $2 billion to the project, which will house their collection of around 2,000 post-war and contemporary works. The building, designed by renowned architects Diller Scofidio & Renfro, seems to uphold Broad’s reputation for lacking architectural taste. Even former NYT architecture critic NICOLAI OUROUSSOFF didn’t care for the honey-combed building.
The Broad bonds might be a good investment but will they finance a good building? Only time will tell.