It's déjà vu all over again at the Minnesota Museum of American Art (MMAA), which is once more without a director, a building, a clear vision or enough money to secure any of the above. The resignation last week of Bruce Lilly, the museum's director for 11 years, highlights the St. Paul institution's long-festering problems.

Museum officials put a brave face on the situation, insisting that the organization would find a new leader, new quarters and more money.

"It's not easy, but the staff here is up to the challenge," said Natalie Obee, the museum's business manager, who stepped in as interim executive director.

Board chair David Kelly, a Minneapolis lawyer, said, "The next challenge will be finding a permanent home" for the museum, which is now housed in a former garage in the Ramsey County Government Center. The building is likely to be torn down soon, "so our days are numbered," he said.

Lilly, who could not be reached this week, was more dour a couple of years ago.

"How would suicide play?" Lilly asked in a moment of rueful candor when queried about the museum's situation. He wasn't speaking personally, just ruminating about the institution's prospects.

In the past decade, as other Twin Cities art museums have expanded their budgets, attendance and buildings, the MMAA has downsized. Four years ago, Lilly moved its galleries out of Landmark Center, a historic former courthouse overlooking Rice Park, into the nearby garage on Kellogg Boulevard. The move gave the museum street-level visibility, which officials hoped would attract new visitors. Attendance did rise from 9,267 in 2005 to 10,503 last year.

Financial problems remain, however. It posted ever-larger deficits in the past three fiscal years: $107,708 in fiscal '06; $201,704 in '07 and an estimated $260,000 in the year that ended June 30. That's on an annual budget of about $700,000, down from $800,000 in 1998. Staffing, meanwhile, has shrunk to four full-timers (plus two vacant positions), compared with 13 a decade ago.

"We have worked hard on capping our expenses and are looking for additional funding sources as it's become more of a dog-eat-dog world with shrinking arts funding," said Obee.

She said the museum has a financial "cushion" of between $1 million and $2 million. She did not know whether the money was an operational fund or endowment money legally restricted for investment or art purchases. Board president Kelly referred financial matters to Obee, saying "You're asking an accounting question and I'm not sure I'm equipped to answer it."

Putting on a cheerful face

Despite the issues, the museum and its supporters are optimistic.

"We're firmly committed to staying in St. Paul and having a viable organization," said Kelly. The museum's recent focus on historic and contemporary Minnesota artists gives it a "worthwhile niche," he added. And its popular summer-evening "patio parties" featuring local bands are luring new audiences.

Vickie Benson, arts program manager for the McKnight Foundation, which gives the museum about $55,000 annually for operations, agreed.

"I'm rooting for them because it's another space for artists," Benson said.

Brian Szott, art curator at the Minnesota History Center, endorsed the MMAA's niche-marketing efforts. "St. Paul deserves a museum and [the MMAA] has a viable collection," said Szott, who curated a show of historic Minnesota art there last year.

Real estate needs persist

The museum has been looking for new quarters for decades. In the 1980s, director James Czarniecki spearheaded an ill-fated effort to raise $25 million for a new building and endowment project. Despite a promise of $5 million and land from the city of St. Paul, that campaign collapsed, as did scaled-back plans for a $10.5 million renovation of the Hamm building. When the museum finally pulled the plug on its ambitions in August 1992, it had raised only $1.3 million.

After that debacle, the museum added the word "American" to its former name, Minnesota Museum of Art, narrowed its focus, restructured the board and commenced cutting. Between 1992 and Lilly's arrival in 1998, it trimmed its budget from $1.5 million to $800,000 and staff from 29 to 13.

Still, there were successes in those years. Under the dynamic leadership of Ruth Appelhof from 1994 to 1997, the museum paid off $228,000 in debt, sold its former home in the Art Deco-style Jemne Building, disposed of an unrelated Asian art collection, launched a $900,000 renovation of Landmark Center galleries and developed a lively new exhibition program. All that helped restore the confidence of local foundations, corporations and philanthropists who helped stabilize the MMAA's finances.

The momentum of the Appelhof years seems to have dissipated in the past decade, during which the museum's shows and events focused increasingly on Minnesota artists rather than broader American themes. Since the museum left Landmark Center, its American collection has been shown only occasionally. Parts of it are now on view.

Future in question

Lilly's departure was by "mutual agreement," according to Kelly and other board members. Even during his tenure, the institution began seeking alternative sites in St. Paul. It also has had tentative discussions with the Minnesota Youth Symphony and the St. Paul Conservatory of Music about possible collaboration on a new or renovated building.

"Our goal is to have a building ready so people can move in 2012 or earlier," said Kelly, adding they would prefer to use an existing building.

Board member Mark Hier, a vice president at Securian Financial Group in St. Paul, said the board recently initiated a building feasibility study.

Joe Spencer, arts liaison for St. Paul Mayor Chris Coleman, said the city would help the MMAA find new quarters and might be able to assist with a capital campaign. "They're a great St. Paul institution and we're very confident that they will get their space situation figured out," Spencer said.

The board is the key to what happens next, said Benson of the McKnight Foundation. "It's a critical moment for this board," she said. "They need some strategic thinking right now."

Christine Podas-Larson, president of Public Art St. Paul and a longtime observer of the city's cultural dynamic, put it more bluntly. "That museum has to be taken serious by the city," she said. "You get good people like Bruce Lilly in there who give it their hearts, souls and imagination, but until it's taken seriously, it doesn't matter who is director, they will struggle. It's a matter of civic will. And that means wallets have got to open to make it happen."

Mary Abbe • 612-673-4431