Baltimore Clayworks to File for Bankruptcy, Shut Down

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Photo via Mount Washington Village Association

Baltimore Clayworks is calling it quits.

The 37-year-old ceramic-arts nonprofit plans to file for Chapter 7 bankruptcy in coming days, and is eyeing a total shutdown of its operations. The Baltimore Jewish Times first reported the news.

Interim executive director Devon Powell wrote in an email that leaders tried for months to pursue a three-year plan to keep the group financially solvent, “only to be sued without merit, and ultimately dragged into a political maelstrom that derailed all possibilities and [has] landed Baltimore Clayworks in the insolvency the board and staff fought tirelessly to avoid.”

In an interview with the JT’s Justin Silberman, Powell and board president Kathryn Holt said the end is near.

“I never say never, but in our current venue, it is highly unlikely Clayworks will continue and that this is most likely the end for us,” Holt said.

Chapter 7 bankruptcies entail liquidating assets to pay off outstanding debts to creditors. According to the JT’s report, the nonprofit’s board of trustees plans to meet with bankruptcy lawyers who will set those wheels in motion.

The impending closure follows a failed sale of the organization’s two buildings on Smith Avenue in Mount Washington. Clayworks, which needs to pay off more than $1 million worth of debt that accumulated over the last 13 years, had planned to sell both of its historic properties for $3.7 million to the nonprofit Itineris, which serves adults with autism spectrum disorder.

However, the group pulled out of the sale earlier this month after its landlord offered to sell the nonprofit the space it rents on TV Hill. Itineris’ executive director, Ami Taubenfeld, said in a statement on July 11 that her organization wished “to take advantage of better stewarding of our financial resources, and this gives us a chance to do just that.”

Had the sale proceeded, the Maryland Board of Public Works would have had to approve the transaction, since the state has funded renovations on the Smith Avenue buildings with around $800,000 worth of public bonds. The board never included the matter on any of its public meeting agendas for this month.

Clayworks announced its intention to sell back in February, seeking to pay off its debts, buy a new space in the city and keep a hefty operating reserve. However, members and city residents vehemently opposed the idea and formed their own group, the Community Clayworks Campaign, to halt it in its tracks.

Protesters outside Baltimore Clayworks in April. Photo by Ed Gunts.

The group gathered more than 1,000 signatures for a petition and successfully lobbied Baltimore City Council members to oppose the sale in a resolution. It also proposed alternatives to a full-on sale of the buildings, such as a buy-leaseback arrangement (which the Clayworks board rejected), or having Clayworks sell the gallery building while letting the Clayworks Community Campaign purchase the studio building.

Clayworks managed to raise $200,000 for its campaign to “save Clayworks.” Holt wrote in an email to members today that the campaign had offered to help Clayworks financially, but only under certain demands that the board wouldn’t accept. She said the campaign’s leaders “worked hard” to release some of the money immediately, but “it was not enough, nor in enough time, to stave off bankruptcy.” (Disbursement of all $200,000 would have allowed the group to restructure its debt in a Chapter 11 bankruptcy scenario, she said.)

Marsha Smelkinson, a spokeswoman for the Clayworks Community Campaign, said in a statement, “this is an awesomely difficult time, with many pressures and many voices evident.”

“We believe that, like any institution, fresh ideas and renewed energy and vision come from a change in leadership,” she said. “Fresh leadership is called for, and the larger Clayworks Community and Maryland arts community are aware that there are vast resources and new leaders who stand ready and eager to get to work.”

In an email responding to her comments, Powell said the Clayworks Community Campaign’s members “couldn’t put together a simple pro forma income statement” for the plan to retain the studio building. He also blamed at least some of the group’s members for “put[ting] the organization into its current financial quandary.”

He defended Clayworks’ “capable leadership,” noting he and the board had a plan in place, assuming the sale would have gone through.

“I ask you – what kind of leadership does the Baltimore arts community want?” he posed. “The kind that preys on the emotions of interested parties, makes claims they don’t support in action, ‘whips up’ the masses with catchy slogans and promises of ‘power to the people,’ and in the end does little to nothing of true value and ultimately damages or destroys everything they claim to support? Or the kind of steady, straightforward, boring, substantiated, un-flashy and non-emotionally engaging leadership that says what they are going to do and then does it?”

Smelkinson said the board “should not close the doors and take this once grand institution into bankruptcy.”

“We just hope the current board of Baltimore Clayworks still has the courage and vision to listen to so many civic, arts and elected leaders, and make the right decisions,” she said.

Holt noted Clayworks has received “threats to personnel and property” while trying to schedule times for members and staff to clear out their items. As a result, she said, the buildings will have to remain locked “until a bankruptcy-court appointed trustee can manage the situation.”

 “We understand the impact this will have on the larger arts community,” Holt concluded in her letter to members. “It is exceedingly painful to those that Clayworks has served. We are all grief-stricken with the result.”

Ethan McLeod
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