The Whitney Museum of American Art has had informal talks with the New York City Trust for Cultural Resources about selling bonds to help finance a new building in downtown Manhattan.
The project costs a total $680 million, which includes construction, land acquisition, and an endowment.
“We’ve talked to them at various times over the last several years and I would anticipate that we are going to do an issue, but we don’t have any specifics on it yet,” said Donald Elliot, secretary of the conduit issuer.
“That’s what we’re in business to do, is to help institutions like this that would like to borrow money for capital improvements. So we would look forward to working with them.”
Elliot said that formal talks had not happened but “we got some material from them quite recently.”
The trust is a conduit issuer that sells bonds on behalf of cultural institutions in the city.
The museum has hired Nixon Peabody LLP to represent it in a possible deal. Morgan Stanley was selected as underwriter.
“Size and timing remain to be decided,” Nixon Peabody partner Virginia Wong said in an e-mail.
A source familiar with the project said it was too soon to tell whether the project would ultimately use bond financing. Fundraising efforts have garnered $372 million for the project and the museum is reportedly considering selling some of its property as well.
The museum is in talks with the nearby Metropolitan Museum of Art about the latter using the Whitney’s existing facility at Madison Avenue and East 75th Street.
The museum’s board of trustees green-lighted the move to a new building downtown Tuesday night.
The Whitney, a 501(c)(3) nonprofit, plans to break ground on the new six-floor, 195,000-square-foot building in May 2011.
The building, designed by architect Renzo Piano, is scheduled to open in the Meatpacking District on the west side of Manhattan in 2015, according to a press release.
The Whitney’s financial staff declined to comment on the project’s financing, according to the museum director’s office. Calls to the museum’s press office were not returned.
The museum does not appear to have accessed the tax-exempt bond market before, based on searches of Thomson Reuters and the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access site.
The museum agreed to purchase the city-owned site — located at the southern end of the popular High Line park — from the New York City Economic Development Corp. for $18 million. The city has also allocated $55 million for the Whitney project.
The new building will have more than 50,000 square feet of indoor gallery space and 13,000 square feet of rooftop exhibition space, more than double the 32,000 square feet at its current building.
The added space would allow the museum to exhibit more of its collection, which has grown to more than 18,000 works from the 2,000 it had when the current uptown building opened in 1966.
The effort to get a larger space for the Whitney has been in the works for a while. The museum hired representatives to lobby city officials for possible new development plans at least as long ago as 2002, according to city records.
In 2005, the Whitney paid the Law Offices of Claudia Wagner LLC $80,750 to lobby city officials on “issues of import to the Whitney [Museum] of Art’s proposed new building plan,” according to city records.
In 2008, the law office of Kramer Levin Naftalis & Frankel LLP was paid $283,934 to represent the Whitney during the uniform land use review process.
The city approved zoning changes and permits for the project in 2008.