Top Galleries, Famous Artists Got Millions in U.S. Bailout Loans
(Bloomberg) -- Some of the world’s biggest galleries and the most expensive living artist received millions of dollars in U.S. federal relief loans for small businesses.
Gagosian, David Zwirner, Pace and Hauser & Wirth were among the largest recipients of aid to more than 3,000 entities listed in the “art dealers” category, with each getting aid in the range of $1 million to $5 million, according to data released by the Small Business Administration on Monday. Large artist studios including that of Jeff Koons also got federal assistance.
The $669 billion Paycheck Protection Program was intended to help small companies cover payrolls and other approved costs during the lockdowns. Some art dealerships have furloughed and laid off staff since March. Meanwhile many of the smallest galleries, those with erratic cash flow or without payroll, didn’t get federal assistance, highlighting inequalities within the art world that mirrored the disparities in getting federal aid across the rest of the country.
Gagosian Gallery Inc., which has about 300 employees and 18 branches worldwide, received between $2 million and $5 million and listed 203 retained jobs in the SBA database, which disclosed ranges rather the exact dollar amount of each loan. A representative for the top art dealer didn’t return requests for comments.
Zwirner got one loan at $2 million to $5 million as David Zwirner Inc. and another, in the range of $1 million to $2 million, as Zwirner Gallery LLC, according to the data, which didn’t list a number for jobs retained. Last week the gallery said it was cutting 40 jobs, or 20%, across its six locations worldwide, according to ArtNews.com.
The loans covered expenses such as payroll and benefits from early April to early June and there were no layoffs during that period, according to Sarah Goulet, a spokeswoman for Zwirner. The recent cuts will be offset by new hires, resulting in about a 15% decrease in staff by the end of the summer, she said.
Pace, which received $2 million to $5 million, participated in the PPP program to protect jobs and all of the money went to employees, according to spokeswoman Amelia Redgrift. The gallery furloughed about a quarter of its U.S.-based staff to ensure the long-term health of the business, she said.
Another big name in the art world, Hauser & Wirth, got as much as $2 million as Hauser & Wirth Inc. in New York, retaining 76 employees, and $350,000 to $1 million as Hauser & Wirth Holding AG in Los Angeles, which listed 36 jobs. The gallery declined to comment.
McCarthy Studios in Los Angeles got a loan of $480,000 to retain 36 jobs, the entire staff, said Karen McCarthy, who is artist Paul McCarthy’s wife and his assistant.
Getting the loan was “critical,” she said. “I filled out the paperwork nine times. Things kept changing. Then it took two weeks and the money was in our bank account. It would have been horrible to let a bunch of people go.”
Koons, whose sculpture sold for $91 million last year, received $1 million to $2 million, retaining 53 jobs. He didn’t return requests for comment.
The PPP program offers low-interest loans of as much as $10 million that are turned into a grant if certain criteria are met. Data show that 14 businesses got loans of $1 million to $5 million, the highest amount in the art dealers category, with the vast majority of companies getting $150,000 or less. Nationwide, the average loan was $107,000 across industries, the SBA and Treasury said.
Not everyone was lucky. Mitra Khorasheh, owner of the Signs and Symbols gallery in New York, applied three times for a PPP loan and was rejected each time for a different reason. Once it was her non-US citizenship, she said, another time her inability to prove payroll.
“Finally I said, ‘Forget it! It’s not happening,’” she said.
Almost four months after closing her tiny gallery on the Lower East Side of Manhattan, she is still trying to negotiate rent reduction with her landlord.
“It’s really unfair,” Khorasheh said. “I am a startup. I pay taxes.”
©2020 Bloomberg L.P.