The Downturn in Chelsea

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We know the economy has had an effect on the art world. In a series of short conversations recently, I found out just what that effect has been on individual dealers in Chelsea and elsewhere

“See the sidewalk?” said the dealer, looking down to the street from her gallery on a high floor in Chelsea. It was a Saturday afternoon, just after lunch, and the pavement was nearly deserted. “It’s been like that for the past month.” There wasn't so much panic in her voice as resignation.

Foot traffic in the galleries has been correspondingly light, so over the past couple of weeks a number of dealers have had the time to chat with me as I made my rounds of the shows. What follows are snippets of my conversations with them. I’m not identifying the dealers by name—it would be unfair to attribute quotes from a personal conversation; indeed I’ve removed as many identifying elements as possible—but I guarantee that all the conversations were real, with quotes as accurate as I can recall. (A few conversations took place outside of Chelsea but they were in keeping with the tone of the conversations, so I included them.) Not intending to write a piece about the downturn at the galleries, I took no notes, but as the conversations spun themselves into a thread and the thread wove itself into a narrative, I realized there was a story.

The changing face of Chelsea,

above and below

Going Cyber
“I’m taking my gallery virtual,” said one dealer, who plans to expand his web presence and work out of his Chelsea apartment. He’ll close his doors at the end of the year. And what of the artists he represents? They’ll be on his online roster, but there will be no actual shows. Fairs are "not out of the question, but not right now."

Similarly, another dealer will show out of his storage cubicle in the area. (There are several huge storage facilities in Chelsea.) “I’ll have a full inventory on the website, with a small selection on display in the storage unit,” he said. “My clients will think it’s an adventure.”

This approach wouldn’t be possible without cyberspace, of course, and given that so many dealers have already been selling from the Internet, it just may work. But what does it mean for artists, who need to show as much as to sell? And what does it do to a lifestyle in which gallery going and openings are part of the social and creative process?
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Staying Put, Doing Outreach
The dealers who remain committed to staying in their spaces are working the phones, calling and recalling clients. Said one dealer: “I worked out a sweet deal for a client—sweeter for the client than for the artist or me, actually—and he just called to say, ‘We really like the painting, but we’re going to hold off for now.’ It was only $9000.” It wouldn’t be so bad if it were an isolated instance but, she says, “I’ve been getting that response for the past few weeks.”

“Clients aren’t returning my calls. I think they’re embarassed,” admitted another.

Other dealers are making presentations to clients in their homes, in one instance driving more than a hundred miles in hopes of making the sale.
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Taking a Job
“I need a job!” said one dealer, half in jest.

"I’ve taken a job to support the gallery before, and I can do it again if I have to,” said another.

Yes, we understand. Is there an artist (well, an artist without a trust fund) who has not had to do that at some point to support their studio?
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Fair and Equal
The taking-a-job conversation evoked a strong sense of déjà vu. Three years ago at Armory fair time, I congratulated an out-of-town dealer for having made it into one of the hard-to-get-into satellite fairs, which at the time was being held on a ground-floor warehouse space not far from the Armory’s pier location. She sighed. “This was my backup. I really wanted the Armory but didn’t get in. But now I consider myself lucky." She ticked off the names of half a dozen dealer friends. “They didn’t even get into this fair,” she said. Just as I was thinking, Now you know what it’s like for artists, she said, “Now I know what it’s like for you artists. The rejection is terrible. It’s so demoralizing. “ Umm hmm. Then in a flash of insight she added, “Never before have artists and dealers been on such equal footing.”

Cut to the present. Never have dealers and fair organizers been on such equal footing. “I’m not participating this year,” is the phrase I've heard most often. With galleries not applying to get into the fairs, organizers have taken to calling dealers to invite them in. At least one previously rejected dealer signed on. “I figure it will guarantee me a spot when the economy picks up and it’s hard to get into again,” she said. I’m not sure whether she was being optimistic or masochistic, but she had already started packing her inventory.

“I've got to sell $80,000 worth of art just to think of breaking even,” said one dealer. She’s going, but she’s biting her nails.

Many of the dealers I spoke with have turned down the invitations. And not only are they not clamoring to get in, some are clamoring to get out after they’ve signed the contract. “Did you hear that (art fair) is suing (dealer) for breach of contract?” asked one gallerist friend.

“I pulled out," said another. "I’d rather lose a grand [in deposit money] than the $30,000 it will cost me for the booth, the shipping, the hotel and the flight.” She could do that because she hadn’t yet signed on the dotted line.

This is not to say that Miami will be a ghost town. Many of the dealers who aren’t taking a booth will go to see and be seen. As one pointed out, “This will be the first time I’ll actually get to see what everyone else sees.” And who knows? A big uptick in the Dow could sends hordes of collectors from Europe and South America with euros and pesos burning holes in their pockets. Art is a tangible asset, after all.
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Renew the Lease or Move?
Fear of commitment (or lack of money) is also an issue when it comes time to renewing gallery leases. The first wave of 10- and 15-year leases in Chelsea has already started to cycle around. Some dealers signed new leases—in some instances at double or more what they’d been paying. Others closed their doors because the rent was just too steep. The owner of 511 W. 25th is condo-izing his building--the ads have appeared in a few art magazines. Want to stay in the building? Buy your space. (I don’t know how the recent downturn has affected this transition, and to be honest, I feel uncomfortable asking the dealers in that building.) But some galleries have already departed.

A.I.R., for instance. This venerable women’s co-op is something of a bellwether when it comes to locating and relocating. It started life on Wooster Street, moved to the then fringes of SoHo—Crosby Street—when SoHo got too pricy, then back to Wooster, then over to Chelsea relatively early on (I may be missing a stop). Now it has moved to Front Street in Dumbo, where it has found a nice space on the second floor of a building where other dealers are located. It used to be that the gentrification of an area drove out the artists; now it also drives out the galleries. And now that galleries are moving into artists’ studio buildings, it’s only a matter of time before the artists have to vacate. There’s something almost biblical about the cycle.

Even the blue-chip galleries are feeling the pinch. I heard this story from a gallerist friend: A high-end dealer had renter’s remorse after signing a lease on a sprawling space in Chelsea just days before the market crashed. “When he tried to back out after the crash, the landlord threatened him with a lawsuit.” He's there now for the duration of the lease.
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Meanwhile . . .
Emerging and mid-level artists keep sending in submission packages and j-pegs in the hopes of securing representation. Dealers at all levels are keeping their eye on the bottom line as sales trail off, trying, as one dealer puts it, “to come up with new models for doing business.” Fair organizers are forging ahead with Miami.

So the shows go on.

For now.