Baltimore Clayworks Has Dodged Bankruptcy and is Reopening, Community Organizers Say

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Photo via Mount Washington Village Association

Mount Washington’s 37-year-old ceramic arts nonprofit is back from the dead.

More than two months after Baltimore Clayworks’ former executive director announced the organization was shutting down and filing for bankruptcy, a grassroots campaign of Clayworks members and others revealed today that they’ve successfully negotiated a deal to avoid closure, assume control of the nonprofit and install a brand new board of trustees.

The Clayworks Community Campaign, made up of Clayworks members and concerned locals, announced the deal. The group had worked for more than half a year to negotiate with the debt-burdened nonprofit’s ex-leaders on a sale of one the organization’s two Smith Avenue buildings — in order to preclude closure and bankruptcy. Evidently, the old leaders never actually filed for bankruptcy, despite clearing house and locking the doors.

“They closed the doors in mid-July,” community campaign spokeswoman and new board member Marsh Smelkinson said in a phone interview. “Right about that time, the existing board and our campaign agreed that we could not agree by ourselves, and so we both engaged counsel. Basically the last two months, the negotiations were through the attorneys.”

As that was happening, community campaign members continued to meet, aware that a deal could still be worked out. It happened last Wednesday, when they signed over the organization’s assets and debts, Smelkinson said. The old board of trustees resigned, and the community campaign’s members appointed a new board with 15 members.

Clayworks shut down after eight months of searching for a way to stay financially solvent. The nonprofit was burdened with more than $1 million in debt, in part because of unpaid loans. The debt accrued over a period of 13 years, as Clayworks continued to serve Baltimore with workshops, studios for artists-in-residence and other programming from its home base in historic Mount Washington. The state also pitched in, selling more than $800,000 worth of bonds to assist with repairs and renovations.

Leaders arranged a sale of both of Clayworks’ Smith Avenue buildings for $3.7 million – significantly less than the original asking price of $4.5 million – in July to Woodberry-based nonprofit Itineris, which serves adults with autism spectrum disorder. With the money, they planned to pay off Clayworks’ debts, relocate to a new space in an arts district somewhere in the city and still maintain an operating reserve.

But Itineris pulled out of the sale, opting instead to purchase its rented headquarters on TV Hill. Community campaign members and Clayworks leadership subsequently failed to make a deal, and former board president Kathryn Holt and interim executive director Devon Powell announced Clayworks’ closure about a week later.

They had intended to sell since February. The Clayworks Community Campaign formed in opposition, launching a petition against the sale that gathered more than 1,000 signatures and filing a lawsuit against the nonprofit’s leaders. They convinced Baltimore City Council members to approve a resolution opposing any sale, and raised more than $200,000 in donations and pledges.

The campaign offered Clayworks leaders that money to pay down debts in exchange for a promise not to sell, and for representation on the board of trustees, among other terms. The board declined, opting instead to pursue a sale that would never transpire.

According to Smelkinson, the new board has already started repaying some of its debts one day in. Community members actually contributed $350,000 in all, she said. Yesterday they paid out about $150,000 in checks to creditors. They still owe roughly $850,000 to their bank, and are arranging “for debt service on a timely basis,” she said. Another $50,000 is due by Dec. 31.

Now under new management, Baltimore Clayworks’ trustees have a laundry list of tasks to tackle. Chief among them is restoring revenue streams.

“There’s donations and programs and grants and other things that have to be restarted,” Smelkinson said. “The debt does not go away, and the need to address it and to operate in a prudent and stable fashion continues.”

To resume operations, they’ll need to re-hire their former facilities manager, Sam Wallace, to coordinate work to reopen the studio and gallery buildings, as well as education coordinator Matt Hyleck to get classes back up and running. They also need to find a new executive director, brings artists back into their studios and resume gallery sales.

Despite the obvious burdens, there’s a shared feeling of joy among community members who fought to keep their nonprofit open while remaining in Mount Washington.

“There are literally hundreds, if not thousands of people who are so excited by this news,” Smelkinson said. “There’s just a lot of excitement and personal joy that Clayworks lives.”

Board members will hold a community meeting on Wednesday, Oct. 11, from 6 to 8 p.m. at from 6-8pm, at the Parish Hall at the Church of the Redeemer at 5603 N. Charles Street. A grand reopening event will be scheduled for later in the fall.