In response to the Art Institute of Chicago’s plans to raise admission next month to $18 from $12, two Chicago City Council members have proposed an ordinance that would strip not-for-profit museums of their municipal fee waivers if they charge more than $10.
The Chicago Park District, which owns the land that houses the Art Institute in Grant Park, last month approved the price hike for regular admissions and an increase to $12 from $5 for students and seniors. The hike would take effect May 23.
“Given the nation’s high unemployment rate and uncertain economic climate, that figure sounds not only a bit steep, but also completely out of touch with what Chicagoans are going through right now,” said co-sponsor Alderman Edward Burke. He and Alderwoman Ginger Rugai said the hike would put the museum’s admission cost above the Louvre’s in Paris, the Uffizi Gallery in Florence, and the National Gallery in London.
Officials had considered an increase for the last two years and said in published reports that they acknowledge it’s a difficult economic time to raise rates, but noted they still offer free hours and haven’t raised prices in five years. They defended the move, saying the increase simply puts them in line with peer institutions.
The increase comes as the museum is getting ready to debut its nearly $300 million, 264,000-square-feet modern wing next month. The Art Institute last month sold $140 million of new money and refunding bonds in three series. Moody’s Investors Service rates the $330 million of debt A1 with a stable outlook.
The museum originally intended to sell the debt last year but held off due to the market turmoil. Proceeds refinanced lines of credit tapped to help fund construction of the modern wing and other projects and provided new money for projects.
The museum benefits from its position as a prominent cultural institution with an international reputation that drew 1.43 million visitors in fiscal 2008 and its art school that has an enrollment of 2,768 and strong fundraising success with a three-year gift average of $82 million. The museum has raised more than $300 million as part of it campaign to raise funds for the modern wing project. The museum had total fiscal resources of $734 million in fiscal 2008, down from $770 million a year earlier.
Moody’s said challenges include high leverage with little additional debt capacity given its current balance sheet, a high ratio of 69% of variable-rate debt in its portfolio that exposes it to liquidity risks, and the current economic climate that could impact attendance, investment performance and philanthropy.