The City of Boise and the Boise Art Museum are in a rough patch.
On Tuesday, a long-running dispute over a potential lease agreement between BAM and the city spilled out into the open when Boise City Council members directed city staff to withhold any financial support to the museum until the organization agrees to come to a lease agreement. The action comes after multiple unsuccessful negotiations dating back several years, made more intense recently after the city standardized its lease policy for nonprofits over the summer.
The museum, located on the edge of Julia Davis Park, is housed in a building owned by the city. Under the current agreement, BAM pays $1 per year in rent to the City of Boise, and officials say taxpayers cover the salary cost of $45,000 per year for a maintenance employee for upkeep. City officials have been trying to sign a new lease with the museum since 2017.
Local governments and other organizations wishing to gift buildings or spaces to other organizations they want to support often lease spaces for $1 per year. The city had similar arrangements with other organizations before formulating its new policy.
Now, some Boise City Council members say they are at the end of their rope and trying to force an open negotiation with BAM at a public work session to resolve the dispute.
“Here’s my direction: We need a lease,” City Council Member Patrick Pageant said almost immediately after city council staff finished presenting the issue. “We have a lease policy. The MOU we have now doesn’t work. It creates liability for both parties, we’ve been having these conversations for five years now with no progress, and we need progress, so my direction would be to suspend financial support until we can negotiate a lease and get this issue resolved.”
Years of negotiations
BAM Executive Director Melanie Fales told BoiseDev the museum has been hoping to reach an agreement with the City of Boise and continue their partnership, which dates back to the Great Depression. She said the museum wants “good faith negotiations” and an appraisal. Fales said BAM must ensure the facility is “fundamentally a sound building” before signing a lease with the city.
“BAM cannot, in good faith, forfeit its capital investments nor have ongoing donor contributions undermined by an agreement that potentially jeopardizes the stability and sustainability of the organization,” Fales wrote. “For example, the proposed 10-year term creates an unworkable and unstable situation that prevents future fundraising for capital improvements. We have requested a work session meeting to discuss the details of a new arrangement. We are hopeful that the city agrees that thorough and thoughtful discussions are critical as we continue to serve the best interests of our community, now and long into the future.”
The City of Boise leases several properties to Boise nonprofits all over town.
Until recently, all those nonprofits had separate lease agreements, rent payments, and other provisions governing their partnership with the city. Boise City Council opted to standardize this in August with a new, more uniform set of guidelines to decrease the city’s liability and make things more equitable across the board for all organizations.
These new guidelines include rent at 25% of fair market value or $2,000 per month, whichever is lower, leases ranging between one and ten years, and requiring nonprofits to pay for utilities and minor repairs.
As part of this process, city staff presented a proposed lease to BAM in June. This included a rent payment in line with other nonprofit partners and a ten-year lease term with a right of first refusal. It also called on the museum to pay utility costs and to cover the cost of maintenance employee. The lease proposal directed the museum to institute “direct resident benefits” since taxpayers subsidize it.
Essentially, the city says it should prove a benefit to city taxpayers in exchange for what it provides to the museum.
‘No substantive feedback’
This was not well received, city officials say.
City staff said BAM was frustrated with City of Boise employee turnover during the several years of negotiations. But staff says there has been continuity in recent months, and BAM has not provided “substantive feedback.”
In September, the city says it returned with a compromise arrangement allowing BAM to begin paying graduated rent payments starting in 2026, with the full amount starting in 2031 and the city covering the maintenance staffer’s salary through 2024. The city also proposed that the museum take the next ten years to decide how to implement “direct resident benefits.”
Staff told council BAM rebuffed this compromise, saying an appraisal was required before signing a lease, and the museum requested a 25-year lease agreement. BAM also disputed that the city has been paying the cost of the maintenance employee. Fales, BAM’s executive director, also declined to participate in Tuesday’s city council meeting, city staff told the council.
Fales told BoiseDev BAM does not employ city workers “in any capacity,” and the $45,000 funds for a full-time maintenance worker Washburn described is just a payment to BAM to cover building maintenance costs. She said the building’s maintenance costs exceed the $45,000 amount, and BAM employees respond to issues with the building on a 24-hour basis.
City Council Member Jimmy Hallyburton said he was confused why BAM staff requested a work session to discuss the issue but did not attend Tuesday’s meeting. Mayor Lauren McLean’s Chief of Staff Courtney Washburn said she could not clarify their decision and that this meeting was “put on their radar” a month ago after she met with Fales.
Fales said the museum was asked to present at the city council meeting but needed more time for research before attending.
“We advised city staff that we were not able to make a presentation at that time and would like more time to gather the information needed to present to city council,” Fales wrote. “We shared a written statement with city council, and city staff knew in advance that we would not be presenting at the meeting.”
What is BAM asking for?
Hallyburton said he saw BAM’s counteroffer to the lease, which included a $15 million payment to the museum, and was interested in finding a deal. Still, he wasn’t sure how to proceed given their reluctance to attend Tuesday’s meeting.
“What I am trying to get at is I am still open to having a conversation if they are willing to have the conversation,” Hallyburton said. “If we can have a work session where we can have all of the details, that would be great, but it puts us in a weird spot where we’ve offered that, and it’s been declined.”
When asked about a request for $15 million or any other asks to the city, Fales said the museum is looking at various options to build a new agreement. She did not share specifics.
“We have proposed a number of agreement options based on other national models and have worked to open conversations with staff, council members, and the mayor,” Fales wrote. “We had made progress with past staff members and administration but have had to begin the process over with each new administration. For this to be successful, we know it requires open dialogue and the time and attention to create an agreement that serves our community, the city, and the museum.”
According to BAM’s latest annual report, the museum had total assets of $4.55 million as of April 30th, with $839,501 in cash or cash equivalents and another $550,448 in certificates of deposit. The assets don’t include the value of art the museum owns.
During the fiscal year ended April 30th, BAM said it generated $2.11 million in “total support and revenues” and generated expenses of $1.91 million – adding $196,653 in net cash from the previous year.
Lease negotition ‘ought to occur in a session like this’
City Council President Elaine Clegg agreed that BAM should take time to build up to carry these extra costs, but she wasn’t so keen on giving the museum ten years to develop benefits to Boise residents.
“If we were to go forward, I would be reluctant to give anyone ten years to give a resident benefit,” she said. “They can come up with a resident benefit tomorrow based on income and admission, and I suspect the folks who aren’t coming today because they can’t afford would use it, so it wouldn’t cost them anything. Whatever it is, I am not willing to wait ten years for that benefit.”
In her lengthy email response to BoiseDev’s questions, Fales described multiple programs BAM participates in to engage the community. This includes accreditation with The American Alliance of Museums, where BAM was recognized for its “leadership in welcoming immigrant communities” and “innovative strategies for inviting underserved visitors.” It also has a free digital program called Online ArtReach to help serve Idaho’s school children with themed lessons, discussion questions, and art-making videos for K-12 students. Art teachers can reserve supplies for a hands-on component, and free BAM passes for students and their families.
McLean concluded the meeting stating any negotiations on the lease deviating from standard city policy should be done in a public work session, not smaller one-on-one meetings with groups of council members away from the public eye.
“We believe a work session is a work session, and because the council is the body that passed the policy with regard to leases, it is not in our purview to negotiate privately a departure from that policy,” McLean said. “Doing this as a body, transparently making a decision on whether or not you want to make an allowance is properly before you, but it ought to occur in a session like this.”