Clayworks’ Conundrum Mounting debt could spell the end of arts institution

Clayworks Community Campaign members Sue Patz (left) and Marsha Smelkinson (Photo by David Stuck)

When Marsha Smelkinson returned to her native Baltimore in 2009 after living in San Diego for 25 years, she was looking for an outlet that would provide for her a sense of community.

It didn’t take long to find Baltimore Clayworks, a nonprofit center for ceramic arts that opened its doors in Mount Washington 37 years ago.

Smelkinson, 68, a Randallstown resident, describes Clayworks as a “home away from home,” where she has turned a hobby into a life-changing experience.

She attends pottery classes at least once a week, volunteers anytime she gets a chance and has been instrumental in Clayworks’ annual student art show since helping start it in 2013.

“I’m not an artist,” Smelkinson said with a chuckle. “I’m a student first and foremost. This is a passion and a labor of love. Over the years, I have really developed close relationships with my classmates and others who are active at Clayworks that will last forever.”

But the nationally and internationally renowned organization Smelkinson has come to know and love may face closure because of long-term financial debt.

A previously struck deal to sell Clayworks’ two historic Mount Washington buildings is off as of Thursday, interim executive director Devon Powell said. Clayworks officials believe the sale was the only way to save the nonprofit.

A coalition led by Smelkinson called Clayworks Community Campaign argued that relocation would doom the organization. Clayworks reaches more than 3,500 people through community programs and teaches more than 1,200 students per year.

Itineris, a nonprofit organization serving adults diagnosed with Autism Spectrum Disorder, had struck an agreement in mid-June to buy Clayworks for $3.7 million. The original asking price was $4.5 million despite no appraisal of Clayworks’ assets.

Powell believes Itineris’ decision to pull out will likely spell the end of Clayworks, saying the organization likely has enough money to maintain operations for the next two to four weeks.

“These people who are celebrating the cancellation of the deal have no concept of the realities of the situation, no vision and don’t understand what this is going to do to us,” he said. “The landscape is no longer how do we move forward? Now, it’s how do we end things in the most responsible manner?”

On Tuesday, Powell said he met with attorneys to explore bankruptcy options, which could include filing for Chapter 7 or Chapter 11.

In a prepared statement, Itineris officials said the organization opted to remain at its current location, The Pointe at Rockrose in Woodberry, agreeing to purchase the property for an undisclosed sum.

“We are obligated to our families and individuals to take advantage of better stewarding of our financial resources, and this gives us a chance to do just that,” Itineris executive director Ami Taubenfeld said.

Taubenfeld said the decision had nothing to do with the backlash Clayworks received from the Clayworks Community Campaign over the sale.

“We support their current leadership’s steps to find a brighter future,” Taubenfeld said. “Clayworks can and should remain an important part of the city’s arts community.”

The sale had previously been put on hold after the Baltimore City Council adopted a resolution by Councilman Isaac “Yitzy” Schleifer (D-District 5) on June 19 to effectively reject it.

“[Clayworks] is really just too important to gamble with its future like this,” said Schleifer, who represents Mount Washington. “You have to do what’s in the best interest of the organization, whether it’s popular or not. What’s in the best interest for Clayworks is to stay put, where it is, and find other ways to get out of this situation.”

A Great Debate

Despite fierce opposition from students, patrons and elected officials, among others, Clayworks was intent on selling, Powell said.

Powell urged the state’s Board of Public Works’ three-member panel to put the matter on the agenda for its next hearing on July 26 and approve the sale of Clayworks to Itineris. It was originally scheduled to be heard this past Wednesday but was removed from the agenda.

The state has given Clayworks about $800,000 in bonds since 2000, Clayworks officials said, so the Board of Public Works would have had the final say on whether the organization could sell its properties.

“I’m trying to help this situation, and I’m trying to make it work,” said Powell, who was elevated from director of finance and administration to his current position in April. “I empathize with the people who want us to stay where we are — I really do. But they need to understand that I’m not sitting in a small, dark room saying, ‘What am I going to do to secretly sell Baltimore Clayworks and make off with this money?’”

Clayworks interim executive director Devon Powell (Photo provided)

Clayworks would have used the money from the sale to pay off its debt and move to a designated arts district in Baltimore within the next year, Powell said. In recent weeks, he looked at space on Howard Street and at the Maryland Institute College of Art, among others.

The standoff between supporters and detractors of the sale started in February, when the board of trustees sent out a letter indicating it would sell Clayworks’ properties to wipe out a $900,000 debt. Powell said the deficit is now closer to $1.3 million and continues to swell with each passing day.

News of the board’s announcement came as somewhat of a surprise to Sue Patz, 64, who has been a Clayworks collector, donor and student since she moved back to her native Baltimore in 1992.

But Patz said there were several factors she noticed within the last year that made her feel uneasy about the commitment she felt Clayworks lacked in maintaining its infrastructure.

“Students saw that kilns weren’t being fired regularly, because there wasn’t gas,” Patz said. “There were declines in the upkeep of the buildings, and they weren’t being cared for the way they should have been. Classes were not as well attended and were even canceled in some cases.”

Powell disputed that notion, saying, “there’s a pretty strong sense of what I call entitlement with the patrons of the place.” For example, Powell noted, some students who attend both spring and summer classes have skipped out on paying a $110 fee if they take a three-week studio session in between the seasonal courses. He estimates that has cost Clayworks about $30,000 per year, “or the equivalent of an employee’s salary.”

“That has damaged the organization’s finances, because we haven’t been able to recoup that money,” Powell said. “We still have to pay for all the equipment, utilities, overhead and more, and it’s hard to do when you don’t have much money coming in at certain times like that.”

Clayworks, which has an annual operating budget of about $1.2 million, is also facing two balloon payments totaling $800,000. The first is a $50,000 bank loan due in December. The second totals $750,000 — $600,000 for the mortgage and $150,000 for a line of credit — and is due in August 2018.

Without the sale, Powell said he has doubts that the organization will be able to come up with the money to pay back the loans.

“The notion that we could programmatically generate enough revenue to pay off all our debt is ridiculous,” Powell said. “When you combine the debt load and inability to have program revenues outweigh expenses, it’s simple to come to the conclusion that more has to be done to save the company.”

Patz and Smelkinson question the board’s trustworthiness and think Clayworks could explore more options.

They asserted their repeated requests to review Clayworks’ 2016 financial books have been denied, to which Powell said, “I’m flabbergasted by the audacity that some people think they have a right to this information. It’s mind-boggling to me how there is this group of folks who believe that they should be legitimately entitled to that.”

That in part led Patz, Smelkinson and five other Clayworks members to organize their steering committee opposed to the sale, Clayworks Community Campaign, which Patz playfully dubbed “Marsha and the Maccabees.” Patz said concepts such as tikkun olam have set the tone for their activism.

The group has held town hall-like meetings at the Weinberg Park Heights JCC, posted yellow-and-black “Save Baltimore Clayworks” lawn signs around the city and started a website, Facebook group and online petition. It proposed what it called a “win-win solution” this past Wednesday, which outlined ideas to raise sufficient capital to ensure a prosperous future for Clayworks.

Since the petition drive began Feb. 25, more than 1,000 people have signed calling for the postponement of the sale. In addition, about $200,000 has been pledged in contributions, donations or matching gifts to have Clayworks stay where it is, Smelkinson said.

“The support for Clayworks is clearly there in our opinion,” Smelkinson said. “None of us want to see it go. From what we have seen, the only ones really pushing this sale is the board. It just baffles us. All we want is to come up with and agree on a compromise that is mutually beneficial for everyone.”

A separate donation drive started by Clayworks on the fundraising site Generosity has raised more than $6,000 of its stated $50,000 goal to cover expenses and help it stay afloat through the summer.

The page, created by Clayworks development director Emily Sollenberger Dobbins on June 21, states Clayworks risks bankruptcy and the closure of its doors if the money is not raised.

Powell said if Clayworks is faced with a shutdown, he hopes Clayworks Community Campaign would use the money it has raised to help keep the operations afloat, including funding the remaining summer classes and camps as well as covering artists’ consignments dating back to April.

A Problem of Leadership, Funding

A Clayworks classroom (Photo by David Stuck)

Half of Clayworks’ budget comes from earned income, including classes, workshops and rental fees, and the rest comes from public and private sources.

Ronald Meshberg, 62, of Federal Hill, runs the Meshberg Foundation, a nonprofit that primarily gives to Jewish welfare, community, religious and educational causes. During the last three years, he estimates his foundation has contributed $40,000 to $50,000 to Clayworks for resident artists’ workspace. Clayworks currently boasts eight resident artists.

Meshberg, a professional glass blower, considers his donation an act of tzedakah, or, as he puts it, “the mitzvah of giving.” He feels Clayworks provides an ideal steppingstone for up-and-coming artists looking to take their careers to the next level.

“The artists, I know a lot of them,” said Meshberg, who added he would continue to support Clayworks if it were to relocate. “Many work at coffee shops or as waiters to survive. Clayworks has a staff of wonderful people who truly care about the community, offering something for people of all skill levels.”

Clayworks has two facilities on Smith Avenue. The Studio Building, formerly an Enoch Pratt Free Library branch, was purchased by Clayworks in 1980. It includes classrooms, artists’ studios and kilns. Across the street is the Gallery Building, a former Sisters of Mercy convent built in 1898 and donated to Clayworks by The St. Paul Companies in 1999. That building is used for exhibits, shows and offices.

From an artistic perspective, Clayworks’ current location is a jewel that draws art lovers from around the world and can’t be replicated anywhere else, Patz said.

“What makes Clayworks, well, Clayworks are these buildings,” Patz said. “You can’t just take Clayworks, put it somewhere else and say this is our new home. The buildings were specifically designed for pottery and ceramics.”

Initially, some supported the idea of Clayworks remaining where it is but changed their position after consulting with board members and taking a closer look at the organization’s finances.

Among them was former Baltimore City Councilwoman Rochelle “Rikki” Spector, who helped establish Clayworks in the 5th District and considers herself a big proponent of the arts culture.

Spector said that if “there were a snowball’s chance in hell that Clayworks could stay in Mount Washington without selling the properties at retail and sharing the facilities,” she would have bought in.

“But when I saw the actual information, I thought to myself, ‘What are these people smoking?’” said Spector, who added critics of the sale had reached out to her for advice. “Nobody has to wonder what I mean by this. I call a spade a spade.”

Since 2012, when founding executive director Deborah Bedwell stepped down after 32 years, Clayworks has cycled through two full-time executive directors and two interim executive directors.

While those who were opposed to the sale contend that Clayworks’ troubles started after Bedwell’s departure, the organization’s financial issues date back more than 20 years.

A copy of a 1999 National Arts Stabilization organization assessment obtained by the JT revealed that Clayworks has historically had cash-flow problems and in 1995 established a $30,000 line of credit. Furthermore, to help cover a cash deficit in the spring of 1999, an undisclosed board member loaned Clayworks $20,000, the report noted.

“The organization — and I mean everyone involved — has not seemed to be able to figure out how to maximize the potential for revenue and minimize expenses for a very long time,” Powell said.

At a hearing before state legislators in Annapolis on May 2, Bedwell surmised there has been a growing discord between Clayworks’ leadership and donors, which has greatly exacerbated the organization’s predicament.

Clayworks’ contributed revenues numbered $566,518 in 2012, $532,798 in 2013, $540,586 in 2014 and fell to $405,848 in 2015, the most recent year for which data is available, according to the organization’s 990 forms. The nearly 25 percent decline between 2014 and 2015 can be mostly attributed to a one-time state bond bill grant of $108,713 in 2014 to help Clayworks with upkeep and maintenance.

“It is this loss of nongovernmental individual contributions and grants that has created the cash-flow crisis facing the current leadership,” Bedwell said at the hearing. “Clayworks’ failure to reach out to past consistent donors and grant makers, and to follow up with them when they have expressed interest in making grants but required further information, constitutes negligence by the organization’s leadership.”

Upon a review of Clayworks’ 2015 audit, Powell said Bedwell’s characterization was a fabrication of the truth.

“Bedwell has proven she’s willing to say anything to manipulate people into thinking whatever she wants,” Powell said. “She has completely misstated the facts on the fundraising finances and in her ‘truth about finances.’ The petition group even has that audit and information posted on their website. Simply put, she’s a f—ing liar.”

Future in Limbo

Regardless of leadership or financial issues, the exodus of Clayworks would leave a noticeable void in its neighborhood, Mount Washington Improvement Association president Lindsey White said.

She noted that while her association hasn’t taken a position on whether Clayworks should relocate, she hopes to see it live on for many years.

“Obviously, Clayworks is an anchor institution, and I think everyone in the community would be sad to see it go if that’s what ends up happening,” White said.

Clayworks officials offered a grimmer outlook, despite maintaining a proactive effort to work toward making the organization financially solvent with a viable long-term solution.

About a month ago, Powell said that he encouraged Clayworks’ 12 full-time, part-time and contractual staff to look for other jobs. He thought unless the sale to Itineris went through and the organization could become more self-sufficient, Clayworks would likely cease to exist beyond the next calendar year.

“I’m a human being before I’m an executive director,” Powell said. “As much as I am fighting to keep the ship afloat, these people have families and bills to pay. A lot of them are my friends, and I would be doing them a disservice if I didn’t tell them how things really were.”

jsilberman@midatlanticmedia.com

This story was updated Tuesday morning to reflect Devon Powell’s comments that the sale of Clayworks’ buildings is off.

Comments

  1. Ruth Goldstein says

    Where to start? First, any executive director who has such disdain for his colleagues and the community he serves that he would use the f-word to describe a beloved founding member, is only displaying his own arrogance and hostility, deadly attributes which cannot be sustained in a leadership position. Secondly, although it is a cryptic quote, Mr. Powell’s assertion that longtime patrons have a “sense of entitlement” is bizarre and unbelievable. These are the people who have put their sweat equity into this institution for years, and who have also put their money where their mouth is to try to save it. These are the people any other nonprofit organization would give their eye teeth to call their own, yet Mr. Powell goes out of his way to disparage them. What game are he and the current board playing at? What responsible board, facing dissolution and bankruptcy, would kick the hen that lays the golden egg in the kishkes? I hope readers look beyond the inflammatory statements to discern the true motives of this discredited board – if they are not trying to save Clayworks, perhaps the rush to sale or bankruptcy is an attempt to cover their actions and save their own skin.

  2. Kathleen Parr Stewart says

    As a long time member and a student of Baltimore Clayworks, and a member of the Clayworks Community, it is my obligation to take offense to your characterization of Deb Bedwell. Deb led Baltimore Clayworks for 32 years. She is known for her dedication and work internationally. She is bright, articulate, respected and sincere. Of course there was debt during her tenure, but there was growth. Deb encouraged a sense of joy and community completely lacking in the current leadership.
    I would encourage you delve further into Deb Bedwell’s leadership. I would also encourage you to discuss in detail the offer of support the Community has offered the Board; as well as the offer to buy the gallery and lease it back; and the Boards’ and Executive Director’s negative attitude towards its own community.

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