Aug. 9 (Bloomberg) -- The Chelsea Art Museum in New York may be forced to close after the owner of the 19th century building that is home to the museum filed for bankruptcy protection.
The museum can be saved if its building refinances its debt and develops its rooftop, Dorothea Keeser, the museum’s co-founder and the owner of its building, said in an interview. Otherwise, the property will be sold.
“We can’t become a luxury apartment building,” said Keeser, 63, who hopes to find the financing to hold on to the property and keep the museum open.
The entity that owns the museum building, built in 1850 and located in the Chelsea neighborhood on the west side of Manhattan, filed for bankruptcy Aug. 6, listing assets of $10 million to $50 million, according to papers filed in U.S. Bankruptcy Court in Manhattan. Keeser said the building is worth $20 million now.
Keeser, who opened the museum in 2002, said in a court filing that the bankruptcy was triggered when lender West 22nd Street Properties LLC, an entity associated with Hudson Realty Capital LLC, declined to extend a forbearance period.
The lender, owed $13 million under a loan, wanted to take ownership of the building, Keeser said in court papers. It sought to force out the museum or make it pay more than the “nominal” rent it now pays.
Carin McDonald, a spokeswoman for Hudson Realty, didn’t immediately return a call seeking comment made after regular business hours.
Selling the building and closing the museum will be a loss for the Chelsea neighborhood, Keeser said.
“So many developers want this building,” she said. “It’s a pity they don’t see we’re the only museum in Chelsea.”
The case is In re 556 Holding LLC, 10-14267, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: David McLaughlin in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: David E. Rovella at email@example.com.