State vows to nix funding for planned museum if revenue projections don’t improve

The state could yank funding from a planned French art museum in Jersey City if officials there fail to provide a balanced budget to the New Jersey Economic Development Authority by the end of the month, the authority’s director warned.  

The $34 million in funding the agency promised to build the Centre Pompidou outpost won’t be released by the state until city officials prove the museum won’t be a financial black hole, said the agency’s chief, Tim Sullivan. Sullivan recently sent a letter to a city official threatening to revoke its funding pledge because of a $19 million revenue shortfall. 

“If we get a letter in response saying here’s a really credible plan to move forward, I think that’ll change the circumstances. If we can’t, then I think the Legislature and the governor deserve the transparency to know that this funding may not be able to be deployed,” Sullivan said.

State officials have supported the “transformative” project to bring a satellite of the Parisian art museum to Jersey City — and still hope it happens, Sullivan stressed. 

But poor revenue numbers the city shared in late March “kind of blew our hair back,” he added. That’s when he said the city first disclosed a plan that found Jersey City’s Pompidou would bring in about $4 million in revenue annually, but have recurring expenses of $23 million.

Jersey City Mayor Steve Fulop revealed the Economic Development Authority’s funding threat late last month, alleging on social media that it was political retribution for his criticism of Gov. Phil Murphy’s administration and his withdrawal of support for the first lady’s Senate bid. 

In an interview, Fulop adamantly denied that state officials just became aware of the projected revenue shortfall. 

City officials shared emails dating back months that show similar paltry revenue projections. In a June 2023 email the city sent to Sullivan and Eric Brophy, a senior economic staffer in Murphy’s office, attachments show an estimated $3 million from ticketing, programs, events, shops and retail, and $6 million in projected fundraising. The estimates say that fundraising will be “an important leverage” to fund the $24 million annual operating budget. 

The city also shared operating budgets of museums around the country, with revenues ranging from $7 million to $38 million annually.

Fulop said the state supported the project from its inception until January, when he criticized the Murphy administration’s job overseeing NJ Transit.

Sullivan agreed the Murphy administration has been supportive of the museum project. He declined to say outright that the letter was not politically motivated, saying the “facts speak for themselves.”

Sullivan also wouldn’t say how much Jersey City would have to kick in for the state to recommit to the project, but “the gap has to be a lot closer to zero than 19.” 

An email obtained by the New Jersey Monitor shows Brophy told city officials in January that “no funding will/can be released until there is a full funding plan in place.” This was before Fulop pulled his endorsement, but after his critique of NJ Transit.

While Sullivan and Fulop feuded last week, Republican legislative budget officers criticized the Pompidou project, telling Lt. Gov. and Secretary of State Tahesha Way in a letter that state funding promised for the museum should go toward a “more responsible purpose.” The state has pledged an additional $24 million for the museum in this year’s budget.

City officials have until May 26 to respond to Sullivan, though Fulop told NJBiz he’d reply within a week. He did not respond to the New Jersey Monitor for further comment.

The path ahead 

Preconstruction work on the museum has begun near the city’s Journal Square PATH station. Construction was supposed to begin this month, but workers haven’t broken ground yet because the city is awaiting funding from Economic Development Authority, Sullivan said. 

It’s unusual for the authority to drop a project once grants are allocated, Sullivan said. But he noted there aren’t many comparable situations of this size. That’s part of the reason why the state agency is involved, he added.

The project has been delayed several times since it was announced in 2021. It was first set to open in early 2024, and that got pushed back to 2026. An economic impact study the city conducted now shows a projected opening date of 2027. 

Fulop said the goal is to present the state with a project that is “consistent for what the state’s involvement is” with other similar institutions, like the Liberty Science Center and the New Jersey Performing Arts Center.

“We are going to do our best to help and work with them to get to a plan to solve for a structure similar to institutions,” said Fulop. “But here’s the thing — they’ve been partners every step of the way, but if they want to say no, they control the cards.”

He said it would be a “missed opportunity for New Jersey and Jersey City” if the state pulls funding for “punitive” reasons. 

Sullivan stressed the project is far from dead. 

“We would love to see it happen. If there’s a way to do that, we’re happy to work as hard as we can,” he said.

But, he added, if the “project is not viable, it’s time to call it a day.”