Jan. 14 (Bloomberg) -- George Steel, chief of the Dallas Opera, was named general manager and artistic director of New York City Opera.

The appointment, announced late this afternoon, is the latest installment in the epic attempt by the company to find a manager and declare its relevance. Lincoln Center’s No. 2 opera house has spent more than three years searching to replace Paul Kellogg, who announced his imminent retirement in September 2005.

In February 2007, the opera’s board announced that Belgian radical Gerard Mortier would become general director of the company after serving out his term as head of the Opera in Paris.

He was expected to join full-time in September 2009, but withdrew in November 2008, saying he couldn’t take the job because of “the significantly reduced funds available” to transform the house according to his vision.

Steel inherits a company that has been spending its endowment and losing its audience. In the year ending June 2007, it sold $38.4 million of stocks and bonds, according to its tax return. The prior two years it disposed of $51 million of securities.

“Whoever takes it over is out of his or her mind,” Robert Wilson, a retired money manager who was chairman of the opera from 1982 to 1994, said earlier this month.

“I don’t think you can generate enough money from the box office or donated income to keep it going.”

New York City Opera earned $13.5 million from ticket sales in the year ending in June 2007, down from $13.7 million a year earlier and $14.5 million in 2005.

New Dallas Center

Steel takes the job less than a month after he assured Bloomberg News unequivocally that he didn’t want it, a few hours after his press agent said he was in discussions with City Opera, and “might be interested” in the position.

He joined Dallas Opera in October to move the once-legendary company (Maria Callas sang here) into the new Winspear Opera House, part of the roughly $354 million Dallas Center for the Performing Arts. The center will open in October. The opera house is designed by Norman Foster.

It is unclear who will now lead the company or if it will sue Steel for breach of contract. Spokeswoman Suzanne Calvin declined to comment.

“Even if you leave the ethical issues aside, ‘shocking’ and ‘disappointing’ are words inadequate to describe the turn of events,” said Patrick Kelly, a prominent Dallas stage manager and cultural journalist who heads the theater department at the University of Dallas. “How rare can reliable leadership be among artistic institutions if two established opera companies have to go after one young man to serve as their head honcho?”

Known in Manhattan

Steel is well-known in Manhattan for running Columbia University’s Miller Theatre, where he won acclaim presenting a mix of new music, opera, dance and theater.

Raised in a Maryland suburb of Washington, Steel is a specialist in contemporary music who also conducts and composes. He has said that he picks only music that inspires him.

Wilson said he advised City Opera President Mark Newhouse to pick a leader who shuns new operas.

“You might get people who go to the opera once a year but you won’t people who can give them money,” Wilson said. “It’s lousy music. People don’t go out of their way to hear lousy music.”

Steel’s office will be in the subterranean level of the theater now known as the Koch Theater -- for David H. Koch, who paid $100 million for the renovation. It houses both City Opera and the New York City Ballet. (The ballet led by Peter Martins, made sure the company was ensconced for its lucrative winter season).

At the behest of Mortier, the opera shuttered its season in the theater and has been wandering among out-of-the-way venues in all five boroughs until the renovation is complete. The opera was contractually obligated to keep its chorus and orchestra on its payroll, but has been shedding administrative staff.

To contact the reporter on this story: Philip Boroff in New York at pboroff@bloomberg.net.

Last Updated: January 14, 2009 17:23 EST