Downtown S.F. museum in trouble after missing key fundraising deadline
The future of San Francisco's Mexican Museum is in jeopardy after the beleaguered organization missed a key fundraising deadline for the construction of its long-gestating downtown location.
The museum's collection of Mexican and Chicano art, reportedly comprising more than 16,000 artworks and objects, has been sitting in storage since 2018, when the half-century-old institution shuttered its galleries near the city's Presidio neighborhood after struggling to pay rent.
That situation is unlikely to change, as the museum's delayed downtown San Francisco project at the corner of Third and Mission streets now appears further than ever from becoming a reality.
The missed June 14 deadline is consequential: It resulted in the museum losing a public grant that was intended to help it fund tenant improvements at its new, four-story home at the base of a luxury condo tower at 706 Mission St., the Chronicle has learned.
Without the capital to start construction within the required timeframe and cover certain costs, the museum is in default of its lease with the city, which owns the commercial space. The museum has been leasing the unoccupied space, located steps from the Museum of Modern Art and other museums in the Yerba Buena Arts District, since 2015 — about half a decade before the tower was completed. The contract granted the museum future use of the site for 66 years for $1, and is renewable for another 33 years.
The total cost of the museum's planned project has been valued at between $38 million and $60 million. At least $11 million is needed to complete the first phase, which would target the first two floors for a lobby and pop-up gallery.
But according to communications between the nonprofit and the city obtained by the Chronicle, the museum, as of last week, had not secured even a fraction of that amount. It now stands to lose its lease at 706 Mission, potentially in as soon as two months, unless it manages to cure the default.
'The city reserves the right to exercise any and all of its remedies under the Lease, including … the right to terminate the Lease on written notice,' Andrico Penick, director of the city's Real Estate Division, said in a letter sent Wednesday notifying Andy Kluger, chairman of the museum's board, of the default.
After a city audit last year raised concerns over its ability to finish its downtown project, the museum was given the June 14 deadline to raise roughly $4.5 million from private donors. If successful, it would retain access to some $6.6 million worth of unspent city funds, which were promised to support construction at 706 Mission back in 2010.
The 10-year grant agreement, which was managed by the city's former Redevelopment Agency, now the Office of Community Infrastructure and Investment, or OCII, was for $10.6 million. It had already been extended prior to its expiration this month.
Had the museum secured at least $2.3 million by June 14, it could have requested another six-months to continue fundraising without losing the public funding, so long as it was meeting its lease obligations, records show.
Victor Marquez, the museum's longtime general counsel, told the Chronicle in December that fundraising was on track — the museum had over $16 million in pledges, he said.
But, on June 13, Marquez wrote to OCII Director Thor Kaslofsky requesting more time, and admitted that the museum had no funds secured yet.
'While the Museum does in fact have bonafide commitments that exceed ($5 million), it will not, however, have them on hand 'available for expenditure' on June 14, 2025, as mandated by the Grant Agreement,' he said in a letter, and suggested that the museum was entitled to a 60-day cure period to secure the funds.
In his response on Wednesday, Kaslofsky rejected the notion of a cure period, but said that OCII would not reallocate the remaining grant funds for at least 60 days, indicating that the museum still has a shot at claiming the city dollars.
The letter stated that the museum must provide required financial reports, like its budget and tax statements, to the city. Penick, that department's director, said the reports had been outstanding since 2018. The museum must also provide proof of insurance coverage for the 706 Mission space and pay over $600,000 in outstanding operation and maintenance costs.
The lease required the museum to finish tenant improvements within 24 months of receiving the keys to its space, which the city said occurred in July 2023.
Penick told the museum that it now has two months to complete the project's first phase — a near impossible timeline, given that the museum has yet to submit construction plans to the city or secure required permits, which can take months. City officials have indicated to the Chronicle that they remain open to working with the museum.
But, without the required capital, the nonprofit won't be able to start the work.
'The city reasonably anticipates that (the museum) will fail to meet this lease obligation, and therefore, the city is giving notice of this anticipatory breach and the opportunity to cure,' Penick said in his letter.
Marquez, Kaslofsky and Penick declined the Chronicle's requests for comment on the recent developments.
The Chronicle reached out to members of the museum's board, including Kluger, in recent weeks, but heard back only from board secretary Xochitl Castañeda, a longtime UC Berkeley professor, who confirmed that she is no longer involved. Per the city's audit, the museum had six staff members in 2023. It is unclear whether that number has changed.
The lease default is the latest turn for an institution that has had surprising political influence in the city, despite essentially existing only on paper for much of the past decade and having long faced transparency and accountability accusations.
'The reality is that the previous mayor didn't want to upset the apple cart while she was running for reelection,' said former downtown Supervisor Aaron Peskin, who called for the city audit of the museum's fundraising efforts last year. 'This organization does not have the capacity, it has repeatedly failed to perform and it's time for the city to move on."
With a contentious election year in the rearview mirror and a new mayor focused on oversight of the city's spending on nonprofits, the museum's support in City Hall appears to be waning.
'Our administration will always stand up for our Mexican community, and we are working to find a way to celebrate their heritage in San Francisco. We are currently giving museum project leaders an opportunity to provide information regarding the status of their grant and lease,' said Charles Lutvak, spokesperson for Mayor Daniel Lurie.
Should the city terminate the museum's lease at 706 Mission, it could then begin to search for a new tenant.
'At the same time, we must begin having conversations with other leaders in the community to ensure we uplift this community and put this collection on display for the entire city,' he said.
Supervisor Myrna Melgar said that she believes it is 'fair to look at the plan and assess whether or not they have met their requirements' about the museum project.
'We have plenty of other museums in town who have a proven track record of being able to both raise the money and have a collection that is viewable by the public,' Melgar said. 'The issue has always been: They're not Mexican.'
Former Mission District Supervisor David Campos called the museum project's unraveling 'a sad reality' at a time when Latino and immigrant communities across the country are facing intense scrutiny and targeted actions by aggressive federal immigration policies.
'Latinos are under attack in this country, and Latino culture should be highlighted,' he said, adding that he did all he could while in office between 2008 and 2016 to support the museum and push its downtown project forward. 'Public money comes at a cost, and that cost is accountability and transparency,' Campos said. 'That's what we set up for the museum to do its part, but obviously it failed to do that.'
Emails obtained by the Chronicle through a public records request show that the museum's most recent fundraising campaign likely stalled out when another nonprofit that had agreed to lend its expertise exited the partnership.
The museum outsourced management of its operations last year to Mission Neighborhood Centers Inc., or MNC. Serving as the museum's fiscal agent and fundraiser, MNC agreed to oversee construction of the downtown space and to launch a capital campaign and grant-writing program to bolster its finances.
In March, MNC CEO Richard Ybarra sent an email to city stakeholders notifying them that the partnership had ended. He said the groups had been negotiating regarding their collaboration since summer 2024 but were 'unable to reach an agreement that would be acceptable to both parties.'
Ybarra confirmed when contacted in April that MNC 'broke off talks' with the museum, but he declined to comment on what led to the breakdown.
A fundraising plan submitted to OCII by Ybarra in May 2024 detailed how MNC planned to raise $37 million for the museum in 24 months, through separate campaigns in the U.S. and in Mexico.
It also listed three pledges from potential donors that the museum had received: $5 million from Mexican businessman Mauricio Sulaimán for a 'second floor Sculpture Gallery'; $100,000 from Marquez, the museum's attorney, and UC Berkeley professor Matteo Garbelotto that would go toward the museum's gift store; and a $500,000 pledge made in 2023 by Nur Hausawi, who said she manages the wealth of a Saudi American family living in the Bay Area.
The latter pledge represented yet another curious twist in the museum's fundraising saga: Hausawi, also known as Robin Lee Allen, told the Chronicle last year that her employers are donors for art and culture causes in the region. But the pledge, which the Chronicle reviewed, was made by Hausawi using her life insurance policy. It could only be cashed out if the museum raised $5 million on its own.
Hausawi's 'gift' came with unusual conditions. Last fall, she presented the museum's board with a contract that proposed hiring her as a turnaround manager for six months, at a cost to the museum of $60,000. The contract would have empowered Hausawi to make executive decisions regarding the museum's daily operations, manage fundraising and, notably, replace its board members.
It also proposed housing the Manos Accelerator, a mentorship-driven program targeting Latino entrepreneurs that's based in Silicon Valley, on the fourth floor of the museum. In exchange, Hausawi committed to doubling her pledge to $1 million — but only if the contract, which included the museum meeting a fundraising goal of $3.5 million in cash contributions, was successfully completed.
When the museum did not sign the contract last fall, Hausawi rescinded her pledge.
In his letter to OCII this month requesting additional time to raise funds, Marquez noted that the city's arts and culture community has been 'disproportionately impacted' by the 'challenges of the COVID-19 pandemic' and its aftermath. He said that philanthropic giving 'dropped significantly for the arts,' and pointed to other museums that have struggled recently.
Those challenges are real: The Jewish Museum, located on the same plaza as the Mexican Museum's vacant home, temporarily shuttered its galleries last year amid financial pressure. The nearby Museum of the African Diaspora is also closed through September, due to renovations. And last month, the Museum of Modern Art, between Mission and Howard streets, laid off 29 staff members.
The Mexican Museum's fundraising may have been hurt by its lack of physical galleries to show off its collection to donors. But, there were signs that it was cash-strapped long before the pandemic.
Court records show that the museum and its former landlord, the Fort Mason Center, settled various legal claims over owed rent payments and other charges between 2006 and 2009, including an eviction lawsuit.
The city's audit last year found that the museum has not had a permanent director since 2015 and that, as of December 2022, it had 'no plan or personnel dedicated to raising capital funds.'
Tensions between the city and the museum came to a head in 2022, when the museum filed a lawsuit accusing the city of locking it out of half of its downtown space. City officials confirmed at the time that they arranged to block the museum from a portion of the space, which they planned to sublease to other tenants. They cited concerns over the museum's finances, and said the effort was intended to reduce the organization's upfront costs.
The lawsuit was put on hold when the parties agreed to work out their differences in light of the pending city audit.
Public reports by OCII show that the museum continued to receive grant disbursements from the 2010 grant through 2023, for a total of $4 million. As part of the review, the City Controller identified a 'pattern of excessive spending' by the museum, as well as a 'history of mismanaging grant funds from other government organizations.'
The city's audit also assessed OCII's management and oversight of its agreements with the museum, finding them to be lacking. One potential conflict that was not explored was the tenure of a former OCII commissioner who simultaneously served as secretary for the museum's board.
OCII said last year that it took the audit's findings seriously and was implementing changes. But the museum disputed the audit's findings, stating that OCII approved all of its expenditures, and blamed the city's investigation for holding up its construction timeline.
Melgar, the city supervisor, still has hope that the Mexican Museum's collection could be displayed in galleries, perhaps under different leadership.
'It is in our best interest … especially right now in these times, to support organizations that support Mexican culture,' she said. 'If I were there at OCII, I would be looking at how we can protect the collection. How do we make this wonderful collection and culture available to San Francisco residents and visitors?'
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The future of San Francisco's Mexican Museum is in jeopardy after the beleaguered organization missed a key fundraising deadline for the construction of its long-gestating downtown location. The museum's collection of Mexican and Chicano art, reportedly comprising more than 16,000 artworks and objects, has been sitting in storage since 2018, when the half-century-old institution shuttered its galleries near the city's Presidio neighborhood after struggling to pay rent. That situation is unlikely to change, as the museum's delayed downtown San Francisco project at the corner of Third and Mission streets now appears further than ever from becoming a reality. The missed June 14 deadline is consequential: It resulted in the museum losing a public grant that was intended to help it fund tenant improvements at its new, four-story home at the base of a luxury condo tower at 706 Mission St., the Chronicle has learned. Without the capital to start construction within the required timeframe and cover certain costs, the museum is in default of its lease with the city, which owns the commercial space. The museum has been leasing the unoccupied space, located steps from the Museum of Modern Art and other museums in the Yerba Buena Arts District, since 2015 — about half a decade before the tower was completed. The contract granted the museum future use of the site for 66 years for $1, and is renewable for another 33 years. The total cost of the museum's planned project has been valued at between $38 million and $60 million. At least $11 million is needed to complete the first phase, which would target the first two floors for a lobby and pop-up gallery. But according to communications between the nonprofit and the city obtained by the Chronicle, the museum, as of last week, had not secured even a fraction of that amount. It now stands to lose its lease at 706 Mission, potentially in as soon as two months, unless it manages to cure the default. 'The city reserves the right to exercise any and all of its remedies under the Lease, including … the right to terminate the Lease on written notice,' Andrico Penick, director of the city's Real Estate Division, said in a letter sent Wednesday notifying Andy Kluger, chairman of the museum's board, of the default. After a city audit last year raised concerns over its ability to finish its downtown project, the museum was given the June 14 deadline to raise roughly $4.5 million from private donors. If successful, it would retain access to some $6.6 million worth of unspent city funds, which were promised to support construction at 706 Mission back in 2010. The 10-year grant agreement, which was managed by the city's former Redevelopment Agency, now the Office of Community Infrastructure and Investment, or OCII, was for $10.6 million. It had already been extended prior to its expiration this month. Had the museum secured at least $2.3 million by June 14, it could have requested another six-months to continue fundraising without losing the public funding, so long as it was meeting its lease obligations, records show. Victor Marquez, the museum's longtime general counsel, told the Chronicle in December that fundraising was on track — the museum had over $16 million in pledges, he said. But, on June 13, Marquez wrote to OCII Director Thor Kaslofsky requesting more time, and admitted that the museum had no funds secured yet. 'While the Museum does in fact have bonafide commitments that exceed ($5 million), it will not, however, have them on hand 'available for expenditure' on June 14, 2025, as mandated by the Grant Agreement,' he said in a letter, and suggested that the museum was entitled to a 60-day cure period to secure the funds. In his response on Wednesday, Kaslofsky rejected the notion of a cure period, but said that OCII would not reallocate the remaining grant funds for at least 60 days, indicating that the museum still has a shot at claiming the city dollars. The letter stated that the museum must provide required financial reports, like its budget and tax statements, to the city. Penick, that department's director, said the reports had been outstanding since 2018. The museum must also provide proof of insurance coverage for the 706 Mission space and pay over $600,000 in outstanding operation and maintenance costs. The lease required the museum to finish tenant improvements within 24 months of receiving the keys to its space, which the city said occurred in July 2023. Penick told the museum that it now has two months to complete the project's first phase — a near impossible timeline, given that the museum has yet to submit construction plans to the city or secure required permits, which can take months. City officials have indicated to the Chronicle that they remain open to working with the museum. But, without the required capital, the nonprofit won't be able to start the work. 'The city reasonably anticipates that (the museum) will fail to meet this lease obligation, and therefore, the city is giving notice of this anticipatory breach and the opportunity to cure,' Penick said in his letter. Marquez, Kaslofsky and Penick declined the Chronicle's requests for comment on the recent developments. The Chronicle reached out to members of the museum's board, including Kluger, in recent weeks, but heard back only from board secretary Xochitl Castañeda, a longtime UC Berkeley professor, who confirmed that she is no longer involved. Per the city's audit, the museum had six staff members in 2023. It is unclear whether that number has changed. The lease default is the latest turn for an institution that has had surprising political influence in the city, despite essentially existing only on paper for much of the past decade and having long faced transparency and accountability accusations. 'The reality is that the previous mayor didn't want to upset the apple cart while she was running for reelection,' said former downtown Supervisor Aaron Peskin, who called for the city audit of the museum's fundraising efforts last year. 'This organization does not have the capacity, it has repeatedly failed to perform and it's time for the city to move on." With a contentious election year in the rearview mirror and a new mayor focused on oversight of the city's spending on nonprofits, the museum's support in City Hall appears to be waning. 'Our administration will always stand up for our Mexican community, and we are working to find a way to celebrate their heritage in San Francisco. We are currently giving museum project leaders an opportunity to provide information regarding the status of their grant and lease,' said Charles Lutvak, spokesperson for Mayor Daniel Lurie. Should the city terminate the museum's lease at 706 Mission, it could then begin to search for a new tenant. 'At the same time, we must begin having conversations with other leaders in the community to ensure we uplift this community and put this collection on display for the entire city,' he said. Supervisor Myrna Melgar said that she believes it is 'fair to look at the plan and assess whether or not they have met their requirements' about the museum project. 'We have plenty of other museums in town who have a proven track record of being able to both raise the money and have a collection that is viewable by the public,' Melgar said. 'The issue has always been: They're not Mexican.' Former Mission District Supervisor David Campos called the museum project's unraveling 'a sad reality' at a time when Latino and immigrant communities across the country are facing intense scrutiny and targeted actions by aggressive federal immigration policies. 'Latinos are under attack in this country, and Latino culture should be highlighted,' he said, adding that he did all he could while in office between 2008 and 2016 to support the museum and push its downtown project forward. 'Public money comes at a cost, and that cost is accountability and transparency,' Campos said. 'That's what we set up for the museum to do its part, but obviously it failed to do that.' Emails obtained by the Chronicle through a public records request show that the museum's most recent fundraising campaign likely stalled out when another nonprofit that had agreed to lend its expertise exited the partnership. The museum outsourced management of its operations last year to Mission Neighborhood Centers Inc., or MNC. Serving as the museum's fiscal agent and fundraiser, MNC agreed to oversee construction of the downtown space and to launch a capital campaign and grant-writing program to bolster its finances. In March, MNC CEO Richard Ybarra sent an email to city stakeholders notifying them that the partnership had ended. He said the groups had been negotiating regarding their collaboration since summer 2024 but were 'unable to reach an agreement that would be acceptable to both parties.' Ybarra confirmed when contacted in April that MNC 'broke off talks' with the museum, but he declined to comment on what led to the breakdown. A fundraising plan submitted to OCII by Ybarra in May 2024 detailed how MNC planned to raise $37 million for the museum in 24 months, through separate campaigns in the U.S. and in Mexico. It also listed three pledges from potential donors that the museum had received: $5 million from Mexican businessman Mauricio Sulaimán for a 'second floor Sculpture Gallery'; $100,000 from Marquez, the museum's attorney, and UC Berkeley professor Matteo Garbelotto that would go toward the museum's gift store; and a $500,000 pledge made in 2023 by Nur Hausawi, who said she manages the wealth of a Saudi American family living in the Bay Area. The latter pledge represented yet another curious twist in the museum's fundraising saga: Hausawi, also known as Robin Lee Allen, told the Chronicle last year that her employers are donors for art and culture causes in the region. But the pledge, which the Chronicle reviewed, was made by Hausawi using her life insurance policy. It could only be cashed out if the museum raised $5 million on its own. Hausawi's 'gift' came with unusual conditions. Last fall, she presented the museum's board with a contract that proposed hiring her as a turnaround manager for six months, at a cost to the museum of $60,000. The contract would have empowered Hausawi to make executive decisions regarding the museum's daily operations, manage fundraising and, notably, replace its board members. It also proposed housing the Manos Accelerator, a mentorship-driven program targeting Latino entrepreneurs that's based in Silicon Valley, on the fourth floor of the museum. In exchange, Hausawi committed to doubling her pledge to $1 million — but only if the contract, which included the museum meeting a fundraising goal of $3.5 million in cash contributions, was successfully completed. When the museum did not sign the contract last fall, Hausawi rescinded her pledge. In his letter to OCII this month requesting additional time to raise funds, Marquez noted that the city's arts and culture community has been 'disproportionately impacted' by the 'challenges of the COVID-19 pandemic' and its aftermath. He said that philanthropic giving 'dropped significantly for the arts,' and pointed to other museums that have struggled recently. Those challenges are real: The Jewish Museum, located on the same plaza as the Mexican Museum's vacant home, temporarily shuttered its galleries last year amid financial pressure. The nearby Museum of the African Diaspora is also closed through September, due to renovations. And last month, the Museum of Modern Art, between Mission and Howard streets, laid off 29 staff members. The Mexican Museum's fundraising may have been hurt by its lack of physical galleries to show off its collection to donors. But, there were signs that it was cash-strapped long before the pandemic. Court records show that the museum and its former landlord, the Fort Mason Center, settled various legal claims over owed rent payments and other charges between 2006 and 2009, including an eviction lawsuit. The city's audit last year found that the museum has not had a permanent director since 2015 and that, as of December 2022, it had 'no plan or personnel dedicated to raising capital funds.' Tensions between the city and the museum came to a head in 2022, when the museum filed a lawsuit accusing the city of locking it out of half of its downtown space. City officials confirmed at the time that they arranged to block the museum from a portion of the space, which they planned to sublease to other tenants. They cited concerns over the museum's finances, and said the effort was intended to reduce the organization's upfront costs. The lawsuit was put on hold when the parties agreed to work out their differences in light of the pending city audit. Public reports by OCII show that the museum continued to receive grant disbursements from the 2010 grant through 2023, for a total of $4 million. As part of the review, the City Controller identified a 'pattern of excessive spending' by the museum, as well as a 'history of mismanaging grant funds from other government organizations.' The city's audit also assessed OCII's management and oversight of its agreements with the museum, finding them to be lacking. One potential conflict that was not explored was the tenure of a former OCII commissioner who simultaneously served as secretary for the museum's board. OCII said last year that it took the audit's findings seriously and was implementing changes. But the museum disputed the audit's findings, stating that OCII approved all of its expenditures, and blamed the city's investigation for holding up its construction timeline. Melgar, the city supervisor, still has hope that the Mexican Museum's collection could be displayed in galleries, perhaps under different leadership. 'It is in our best interest … especially right now in these times, to support organizations that support Mexican culture,' she said. 'If I were there at OCII, I would be looking at how we can protect the collection. How do we make this wonderful collection and culture available to San Francisco residents and visitors?'
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- Miami Herald
Lake Worth Beach celebrity restaurant with movie history shuts down
It's been a really tough road for restaurants in recent years. The trouble started back in 2020, when restaurants were forced to shutter to guests during the pandemic. Don't miss the move: Subscribe to TheStreet's free daily newsletter Although those restrictions were temporary, restaurants then faced a series of challenges. First, there were labor shortages, due partly to the generous unemployment benefits stimulus bills had allowed for. Then, it was supply chain interruptions that made it hard to load up on ingredients. Related: Iconic mall food chain makes massive change The most recent challenge has been ongoing, and it's none other than inflation. Inflation has not only driven up costs for restaurants, but forced many consumers to change the way they spend their money. As a result, a lot of people have cut back on in-person dining, driving a decline in sales. A number of big-name restaurant chains have filed for bankruptcy and closed their doors as consumer demand has waned. Similarly, a number of popular standalone restaurants have been forced to close permanently. Lula's - a popular restaurant in the Palm Beach, Florida, area - has officially closed its doors. Its menu featured Italian favorites that included handmade pastas, seafood dishes, steaks, and meatballs. Before it was Lula's, the location in Lake Worth Beach hosted a number of famous restaurants, including Callaro's Steakhouse, which met its demise during the pandemic, and L'Anjou, which had been open to customers in that space for more than 30 years. The name Lula's was created by combining the names of two main streets in Lake Worth Beach - Lucerne and Lake Avenues. Related: Legendary local restaurant closing saddens fans The location even had a moment in the spotlight when it was featured in the 1981 film Body Heat. At the time, it was the L'Anjou name that appeared on the big screen. Given that the location was in the heart of downtown, it's surprising that Lula's didn't last longer than it did. It opened in October of 2024, lasting less than a year. The brains behind Lula's wasn't just any old chef. Rather, it was celebrity chef Todd English. English has appeared on a number of well-known cooking shows. He's also a James Beard winner and has authored several cookbooks. Related: Popular Mexican restaurant closes after 45 years Lula's wasn't English's only foray into Palm Beach County. He also opened his popular Figs restaurant at The Gardens Mall, but it shuttered in 2016 after seven years. Now, the famous space Lula's occupied has a new name on the lease. It's the owners of famous restaurant Ravish, located a few miles south in Lantana. Operating partner Alexandra Dupuis was stingy with details but said there are plans in the works to open a new restaurant called Pomona where Lula's once served customers. The aim is for Pomona to open this summer. Of course, if a Todd English restaurant struggled to stay afloat, it's questionable whether a replacement will thrive. More Fast Food & Restaurant News: Starbucks makes shocking pricing move customers will loveBankrupt restaurant chain offers new deal, stiff drinkNew Taco Bell menu items combines multiple classics The sad reality is that consumers are shying away not just from casual dining, but high-end dining as well. A lot of people are having a hard time justifying the higher cost given general economic uncertainty. That's bad news for consumers who do have the budget for the occasional high-end meal. Losing a favorite restaurant is always a big blow. And unfortunately, Lula's may only be one of many beloved establishments to shutter this year. Related: After closing 600 locations, fast-food chain has many more planned The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
