Artscape funds do belong to city, court ruling says


A story in some editions of The Sun yesterday incorrectly stated the amount of money Baltimore contributed to Artscape since a disputed transfer of money from a group that managed Artscape funds to a foundation in 1986. The city has contributed several hundred thousand dollars to the festival.

The Sun regrets the error.

More than $700,000 that had been donated to Artscape, Baltimore's summer arts festival, belongs to the city government, a court ruled yesterday, and should be returned immediately by the organization that holds it, which is controlled by close associates of Gov. William Donald Schaefer.

The decision by Baltimore Circuit Court Judge Mabel Houze Hubbard is a political and moral victory for Mayor Kurt L. Schmoke, who has maintained that the money was originally donated to the city by corporations and foundations to support Artscape, the art and musical festival held in Bolton Hill in mid-July for the past 10 years.

The Artscape money was raised when Mr. Schaefer was mayor. When he was elected governor in 1986, control of the Artscape money was transferred to a newly created non-profit organization, the Maryland Community Foundation, directed by some of Mr. Schaefer's top aides. After Mayor Schmoke took office in 1987, he began to try to get the money back for the city.

The dispute over control of the funds -- which are now estimated to amount to between $700,000 and $800,000 -- has become symbolic of the bitter relations between Mr. Schmoke and Mr. Schaefer.

"This is a very substantial victory not only for the city of Baltimore and for the people who donated money to Artscape, but it is also a victory for the people who live in Baltimore and surrounding areas who benefit from the artistic and cultural events sponsored by Artscape," said City Solicitor Neal A. Janey.

Judge Hubbard ruled that the Baltimore Arts Festival, the non-profit organization set up to receive and manage Artscape donations, was in fact a city agency and that all money collected by it on behalf of Artscape was subject to city control. The ruling said the contract between Baltimore Arts Festival and the city precluded the transfer of money.

Mr. Janey said that the mayor was pleased with Judge Hubbard's decision but would not comment until he had an opportunity to read it and discuss it with the city's attorneys.

Jody Albright, the director of the Maryland Community Foundation and Governor Schaefer's top arts aide, was out of town last night, according to her husband, and could not be reached for comment. William A. McDaniel, the attorney for the foundation, said he did not want to comment until he had a chance to discuss the decision with his clients.

In 1989, Mr. Schmoke said the fight over the Artscape money was "one of the most distasteful experiences" since he had become mayor.

Artscape symbolized Baltimore's urban renaissance in the 1970s and 1980s and is one of the few city-sponsored events that still draws hundreds of thousands of people.

It was conceived when Mr. Schaefer was mayor. He appointed Mrs. Albright, then the city's director of art and culture, to set up the Baltimore Arts Festival. When Mr. Schaefer went to Annapolis in 1986, Mrs. Albright joined his staff as director of the Governor's Office of Art and Culture.

At that time, the Artscape donations controlled by the Baltimore Arts Festival were transferred to the Maryland Community Foundation, which was headed by Mark Wasserman, a longtime aide of the governor. Mrs. Albright served as director and was responsible for running the organization.

In 1988, city officials found they did not have access to the private donations to Artscape. Members of the Schmoke administration considered the maneuvering over the Artscape funds an attempt by Mr. Schaefer to continue to control city events.

Negotiations between city officials and the foundation dragged on for a year, but the city could not persuade the foundation to return the money. The foundation made annual donations -- of between $40,000 and $80,000 -- to Artscape, but the financially strapped city had to contribute several hundred dollars each year to keep the festival going.

In April 1989, the mayor told city attorneys to file suit to recover the money. A hearing was held in October 1989 before Judge Hubbard, and she had been considering her decision since then.

In her ruling, she said that all the money that was transferred to the Maryland Community Foundation plus any interest should be immediately returned to the city. In addition, she said the foundation should give the city an accounting of what it has done with the money.

A city attempt to freeze the foundation's bank account failed in 1989, and the city has received no accounting of the money.

The judge also ordered the Maryland Community Foundation to pay all legal expenses of the suit.

Judge Hubbard's decision is not the final word. The foundation has 30 days to appeal. Mr. McDaniel said he had not been able to reach his clients and there had been no discussions on whether to appeal.

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