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Questions raised over nonprofit organization

Chipstone Foundation withdraws request to renovate building

March 22, 2007

A foundation based in Fox Point came under fire March 13 during a Village Board meeting for allegedly not living up to its end of 19-year-old agreement with the municipality.

The Chipstone Foundation, a $66 million nonprofit organization that operates a private museum, was scheduled to come before the board to request permission to renovate the carriage house on its property located on Club Circle and Lilac Lane. Three hours before the meeting, however, the foundation withdrew its request.

That action raised some eyebrows throughout the neighborhood and elicited remarks from a neighbor who suggested the foundation has failed to follow an agreement with the village. The foundation, as prescribed by the village's cultural overlay code, may operate a museum as long as it adheres to detailed list of provisions contained in the 18-page agreement dated March 8, 1988.

"There were clear - in this document - requirements that needed to be met in order to be recognized as a museum," said Gary Close of 6256 N. Bay Ridge Ave. "I believe from what I have recently learned that most if not all of those requirements to be a museum and to be tax exempt haven't been met. This is my opinion, of course."

Residents who live nearby the foundation's headquarters indicated later that they believe the agreement has been broken since the museum is not open to the public. The museum is only open on an reservation-only basis to scholars and students.

Payment in lieu of taxes

Village Manager Susan Robertson said the foundation is considered tax exempt by the village since it has filed paperwork as a nonprofit organization with the Internal Revenue Service.

"They won't have to pay taxes, but they entered into the agreement in order to hold the village harmless by taking the property off of the tax rolls," she said March 14. "The (village) treasurer gets a certification from their fiscal person every year that certifies that they qualify to be a tax-exempt entity . . . To my knowledge, there has not been an audit or evaluation of the sufficiency of that. I don't think it's ever been looked in to further."

Foundation President David Knox said March 14 that he expects the foundation to come back to the board in the future with revised plans.

"What happened is that we got final estimates (March 13) and they were way over our budget, so we have to go back to the drawing board and revise the plans," he said during a telephone interview.

Knox reiterated that the foundation is a tax-exempt entity that files as a 501C-3 charitable foundation under federal law.

The foundation has made payments to the village in lieu of taxes since the agreement was established. This year, the foundation paid the village $20,868.

Name a play on words

The Chipstone Foundation supports scholarship in American decorative arts and culture through collections, education, research, publications and exhibitions, according to documentation from the foundation.

The foundation is the brainchild of Stanley Stone, the founder of Boston Store, and his wife, Polly. The couple began collecting American furniture, preindustrial British pottery and early American historical prints in the 1940s.

The name Chipstone is a play on the husband's nickname for his wife - Chipmunk - and their last name. He died in 1987 and she died in 1995.

The foundation now oversees the private museum and collection, some of which is displayed in the Milwaukee Art Museum. It also funds lectures and research projects and publishes two art journals.

The foundation headquarters is located at 7820 N. Club Circle, on an eight-acre parcel that is one of the largest in the village. In addition to the main house, the foundation owns an adjacent home on four acres to the south on Lilac Lane. According to a foundation document, the renovated carriage house was to be used as a gathering place for eight scholars about four times a year.

Discussion at meeting

During the Village Board meeting, Trustee Sandi Garmer and Village President Michael West debated the handling of the withdrawn request.

When the meeting began, West announced, on legal counsel advice, trustees would not discuss the agenda item since the applicant withdrew the application.

"The village attorney advised me that as a result of that, the agenda item would not be called except for the purpose of saying that the application was withdrawn," West said. "That moved us to say that the public comment period could be used to address the board on the Chipstone Foundation on matters not related to the agenda item."

Garmer took exemption to West's reasoning.

"I have never heard anything (being on an) agenda being taken off the agenda and residents in the audience couldn't speak to it," Garmer said, noting that five residents attended the meeting to discuss the carriage house renovation.

Garmer accused West of knowing about the decision to withdraw earlier than 3 p.m. on the day of the meeting, the time he said he learned of the foundation's intentions.

"My conduct on the consideration of this agenda item is solely based on my advice from counsel. I did not receive advance information on this," West responded.

Attorney Paul Alexy, who was filling in for Village Attorney Eric Larson, confirmed that he received a call from West at 3:20 p.m. March 13.

He and Larson proceeded to discuss the matter, coming to the conclusion that the item should remain on the agenda but should not be discussed, Alexy said.

"I think this is shutting out the public and putting a bad face on government," Garmer said.

Neighbor input requested

Sally Peltz of 1469 E. Lilac Lane said there has been intense discussion between foundation officials and neighbors during the last 10 days.

"It is as strange as fiction that this application has been rescinded," she said. "The amount of lobbying that went on for weeks before and to take it off three hours prior to the meeting leads me to believe there are additional actions that will be taking place . . . I suspect this issue is far from dead."

West and Garmer attended a meeting at the Chipstone Foundation on March 9.

A handful of residents also attended the meeting, according to Garmer, who said she was skittish about attending a function with West since such a situation could be regarded as outside of the bounds of being elected officials.

Garmer requested the meeting to give neighbors a chance to participate in the discussion with foundation officials regarding the renovation of the carriage house.

Brendan O'Brien can be reached at (262) 317-8586. His e-mail address is bobrien@cninewsonline.com.

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