0.9 Chapter seven: retrenchment and the struggle for survival, 19  (Page 20/20)

With the retirement of Winokur, Ross had assumed the role of chairman, and he declared that he planned to take an active role in running the N-YHS. In addition, Ross disbanded a staff management committee that Winokur had as­sembled to assist with operating the Society. Ross also directed the library staff to come up with a plan to save $200,000 in recurring operating costs, a demand that library staff considered infeasible. The N-YHS staff responded by refusing to act on directions given to them by Ross.

On April 22, 1994, the Society announced in a press release that its interim chairman, Wilbur Ross, had decided to step down, and that he would be succeeded by Miner H. Warner, who had served on the Society's board since 1985. Warner, president of Public Resources International, an advisory firm to foreign govern­ments on infrastructure finance, stated that "at this point we believe that a new permanent chairman who was not on the front lines during this challenging period of transition should be in place when the new president arrives." Of his abrupt departure, Ross said, "There was a feeling the Society ought to now think through who should be the permanent leadership for the institution. My own attitude is, 'I came on the scene simply to help the place. A lot has occurred. That's fine. I didn't start out life seeking this situation.'"

On May 5, 1994, the New York State Assembly's Committee on Tourism, Arts and Sports Development called a hearing to assess the contribution of state financial assistance toward the financial stability of the Society. The state repre­sentatives present at the meeting were Joseph T. Pellittere, chairman; Scott Stringer, assemblyman representing the Upper West Side; Richard Miller, ranking Republican assemblyman on the committee; and Richard Brodsky, assemblyman. As the hearings unfolded, the primary issue of importance to each of the com­mittee members became clear. For Pellittere, it was the feasibility of the Society's financial plan as it was presented to Albany on October 20, 1993; for Brodsky, it was the proper role of deaccessioning; and for Stringer, it was the impact of any real estate development on the neighborhood in his district.

The most important testimony of the hearing was that of Miner Warner, the newly elected chairman. Warner laid much of the blame for the Society's poor performance over the recent past on the fact that there had been no full-time lead­ership. He enthusiastically reported that the search for a new director had pro­duced six excellent candidates for the job and that a new director would be selected by June 1. Warner discussed plans for deaccessioning and admitted that very lit­tle progress had been made on real estate development. He guaranteed that the Society was going to operate in an up-front and open manner and that nothing would be done in secret. "The Society does not want to make the same mistake twice," he said.

The most volatile questioning of the hearing came from Joseph Pellittere, who dissected the Society's 1994-1995 budget, pointing out that it was unrealis­tic in its revenue projections. Specifically, Pellittere challenged the budget's as­sumptions regarding interest income from the endowment. The budget projected a total annual interest income of $2.2 million from return on endowment gen­erated by deaccessioning and real estate development. Assuming a 5.5 percent interest rate, Pellittere pointed out that, in order to receive $2.2 million during the year, the Society would have to have $40 million in cash in the bank within two months. Half of the $40 million was to come from deaccessioning pro­ceeds and half from real estate development. Pellittere was especially critical of the real estate assumption since, as Warner admitted, there had been absolutely no progress on that front. James Griffin, the Society's recently reappointed trea­surer, admitted that the budget was not realistic and that he was working with Society management to prepare a revised budget that would be made available to the committee within a month.

As Warner had promised, the Society's board moved quickly in its search for a new director, and on June 20, 1994, Betsy Gotbaum was named executive director. Gotbaum's background made her well qualified for the political and fundraising challenges of the job. She was the former commissioner of parks and recreation in the Dinkins administration, had served as the head of three non­profit organizations, and had worked as an investment banker between 1986 and 1990. Speaking of her own qualifications for the job, she said: "I have good organization skills; I know the city's political system,. . . and I can raise money."

Like her predecessors, however, Gotbaum inherited an institution with morale problems, a board in turmoil, a depleted endowment, and a staggering deficit. She will need all her skills, and some good luck, if the Society is to reestablish itself as an active, financially viable cultural institution.