Conflict continues at Pacific Art League

Current, past board members paint different pictures

Founded in 1921, Palo Alto's historic Pacific Art League (PAL) has spent much of the last decade mired in controversy. The seemingly intractable conflict amongst current and past board members and staffers seems to center on fundamental disagreements over what sort of organization the league should be and what its future should look like.

In the latest development in the ongoing struggle for leadership of the league, three past board members are appealing to PAL's members to call a special member meeting.

Sunday evening, June 14, former PAL board members Ron Andrews, Diana Diamond and Jo Killen sent out a letter to League supporters. In an email titled, "The Case for Change at the Pacific Art League," the three allege that the current board is not meeting its fiduciary responsibilities to build a reserve fund or a multi-year financial plan. They also charge that the current board has become "dysfunctional" in its governance responsibilities, citing the resignation in 2014 of 13 board members followed by Executive Director Seth Schalet's departure earlier this year. Finally, the trio ask League members to sign a petition calling for a special member meeting to address the issues. According to the organization's bylaws, a special member meeting must be scheduled if as many as 5 percent of members request it. According to current leadership, PAL has more than 650 members.

"A special meeting with discussion from all sides will make for a fresh and healthy environment and organization," the email, signed by past presidents Ron Andrews and Jo Killen and past acting president Diana Diamond, states. "PAL can only benefit. The majority of members can then decide on any changes in direction and bylaws."

Yet current board members dispute the need for such a meeting, insisting that the organization is moving in the right direction and that the email to members serves as a distraction.

"I believe we are on the right track," said current board President Theo Keet. "We are turning it around, but you can't do this overnight."

A brief history of unrest at the League: In late 2007, after conflict over the proposed sale of the League's historic 1929 building, nearly the entire staff of the nonprofit resigned. One month later, 10 of 14 board members stepped down. Eventually, the decision was made to take out a mortgage in order to update the building, and, once renovations were completed, to take on tenants to help cover the mortgage and strengthen the organization's reserves. Last year, following the completion of a $4 million renovation and seismic retrofit, the League moved back in to the ground floor of 668 Ramona St., leasing the second and third floors.

Yet internal turmoil continued. There was another mass exodus from the board in 2014, and in February of this year, Schalet announced his resignation.

Though current and past board members share a commitment to the organization and belief in PAL's value to its members and to the larger community, they paint a very different picture of its future, the current state of its finances and the roles and responsibilities of the board.

Andrews, who wrote Sunday's email to members, summarized his frustration from his time as board president. In a phone interview with the Weekly, he said, "I could not get them to take on what I consider board responsibilities, which is to ... ensure policies and strategies are in place to help the organization grow and be vibrant into the future.

"Instead, the board spent the vast majority of its time on operational issues, doing what an executive director should be responsible for," he said.

A retired vice president at Lockheed, Andrews noted of his professional background: "I understand finances. I understand what it means to turn a profit."

According to Andrews, the League has operated at a deficit for all but one year of the past decade, only once breaking even financially.

"The data I saw compiled recently said that over the last 12 years, the League has lost about $1 million," he said, explaining that the current board has been using a bequest to underwrite operations, a fact confirmed by current board members.

Andrews' suggestions for moving forward include introducing term limits for board members and asking League members to vote on a strategic plan to pay off debt and move toward occupying the entire building once again.

"I think we need to reinvigorate the board," he explained, adding, "This is not personal. We just want the League to thrive and to take advantage of what we feel is a great opportunity to occupy the whole building and to provide great programs."

Former board member and former project manager at Hewlett-Packard Co. Jo Killen suggested that staff roles needed to be "clearly defined and agreed upon, and board members need to get out of managing operations."

Despite her distress over the conflicts at PAL, Killen said she saw the organization's growing pains as "a natural maturity process. I think most boards start out as small groups of volunteers who have good intentions about some effort or other, and then as they grow and expand there's a need to transition to a different kind of a board.

"I think PAL is at that point, particularly with the financial obligations we now have," she said.

Current board president Keet is a retired CFO who has worked with both large organizations and start-ups. Speaking about the letter to members, he said: "It's very unfortunate. Jo Killen and Ron Andrews were board presidents last year, each for a fairly short time." Following their successive presidencies and resignations, Keet said, the PAL board "went into limbo."

"Nothing happened in 2014 in terms of fundraising," he said. "Now, we've got a new board together and new energy going, and I think we are turning the corner. However, in terms of fundraising, that takes several months to happen."

Keet spoke of his hope that by the time PAL's tenants' leases are up, seven years from now, the arts organization will be in a position to take back the entire building for its own use, and he defended the current board's management of the organization's finances.

"We have to build up a lot of additional business and activities and ramp up fundraising," he acknowledged, "but we have seven years to take care of that and have put in a number programs to make it happen.

In terms of other organizational priorities, including education and membership, Keet said numbers are on the rise, and the League is working closely with the cities of both Palo Alto and Menlo Park to develop new programs and initiatives.

Current board secretary Joy Chase, a visual artist who also works as a college librarian, has served on the PAL board since 2009 and said the past board presidents' worry about the mortgage is a non-issue.

"We got a mortgage that's larger than we had hoped, but it's something that's we're paying easily with our tenants," she said. In terms of instituting board term limits, Chase said she was not in favor.

"It's really not a good idea because what you really need is people who understand the organization and know its history," she said. "It seems unnecessary to call a special meeting. I don't think what they're doing is helping PAL. It's just creating a distraction.

"What people really need to know is that there are really dedicated people (on the board) trying to make this organization move into the future. We plan to launch a capital campaign in a couple of years and get enough money to pay off the mortgage. We can't promise to get enough money, but we can certainly make that effort."

Related stories:

Pacific Art League Director Seth Schalet resigns

Pacific Art League loses board chair

Big board, staff exodus from Pacific Art League

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