Baltimore will move to end its relationship with the financially flagging Baltimore Office of Promotion & the Arts, Mayor Brandon Scott said Wednesday evening, just hours after the arts organization announced it would lay off employees and launch a transition task force to chart a course for the agency’s survival.

In a letter to BOPA CEO Rachel Graham and Andrew Chaveas, BOPA’s interim board chairman, Scott’s chief of staff Marvin James wrote that the “decision has not been made lightly.”

“However, the persistent financial difficulties that have come to light in recent months have led us to conclude that this is the best course of action to ensure the long-term sustainability of our city’s arts and cultural programming,” James wrote. “The financial instability has raised serious concerns about BOPA’s ability to continue fulfilling its obligations to the City and its arts community.”

BOPA responded to the announcement in a statement Wednesday night saying, “We want to reaffirm our commitment to the Baltimore arts community. We acknowledge the City’s right to terminate its contract and believe that this transition offers an opportunity to reimagine BOPA’s role in Baltimore’s creative ecosystem. We remain dedicated to our artists, cultural institutions, and the Baltimore community.”

Scott’s administration will need the approval of the Board of Estimates to end the city’s latest contract with the quasi-governmental agency, which is responsible for mounting popular festivals like Artscape and the Baltimore Book Festival. The agreement, approved in June, included a clause allowing the city to end the relationship with as little as 30 days’ notice.

In his letter, James said the mayor will recommend terminating the contract at the BOE’s Nov. 6 meeting. If board members back the decision, the city’s contract with BOPA will end Jan. 20, 2025.

Breaking ties with BOPA “will be an intricate process that will require cooperation between both BOPA leadership and staff and the City, which will be done through the transition team established at today’s board meeting,” Scott said in a statement Wednesday evening.

“Most importantly, it is critical for Baltimore’s arts community to know that this step is being taken to aid support for their critical work in our city. We will work diligently to ensure that the events, property management, and, most importantly, direct support for artists and their work is not significantly interrupted. Supporting our artists is critically important, and Baltimore will always do what is right to ensure our artists get the support they need.”

A city spokesperson said Scott’s administration notified BOPA officials of the decision Wednesday evening before the letter was released.

Earlier in the day, BOPA board members and Graham struck an optimistic tone about the agency’s future after voting to approve layoffs they said would save the cash-strapped agency $35,000 a month. The board also moved to create a transition task force to reevaluate BOPA’s contract with Baltimore City.

“We’re grateful that we’ve found a way to address our immediate cash position, and we look forward to bringing resolution to some of the outstanding invoices,” Chaveas said after the closed-session vote.

The move came after BOPA officials admitted in September that they had run out of money just three months into the new fiscal year. Last month, the arts organization requested $1.8 million in emergency funds from the city in an attempt to address its most recent fiscal woes, but Mayor Brandon M. Scott said he would withhold the bailout until after an independent forensic audit of BOPA’s finances is complete.

BOPA will still host the city’s New Year’s Eve fireworks display as well as the 2025 Martin Luther King Jr. Day parade, Graham said early Wednesday, and James’ letter reiterated the agency would still put on events through next year’s MLK Day parade.

Relations between Baltimore officials and the arts organization — which derives most of its funding from the city — grew tense in recent years as the organization struggled to balance its books and drew public ire for an attempt to trademark the Artscape name as well as a move to cancel the 2023 Martin Luther King Jr. Day parade. Though the city ultimately organized the parade that year, the decision led to former BOPA CEO Donna Drew Sawyer’s ousting.

In addition to festivals, the quasi-governmental agency runs the city’s film office, manages the Baltimore Farmers’ Market and operates such event spaces as the Bromo Seltzer Arts Tower and The Cloisters Castle. Despite its reach, the organization has run deficits for much of the past five fiscal years.

The only recent year in which BOPA’s revenues exceeded expenses was in fiscal 2021, when an influx of nearly $750,000 in COVID-related funding helped BOPA squeak by with a positive balance of $402,274, according to a financial document obtained by The Sun. BOPA lost $1,073,331 in the fiscal year ending June 30, 2019; $537,756 in the 2020 fiscal year; $4,657 in 2022 and $503,634 last year. The losses would have been even greater without the $561,109 in COVID-relating funding that BOPA received in 2020, and the $700,085 it received in 2022.

The board had recently contemplated other cash-saving options, such as finding additional tenants for its 7 St. Paul St. offices, where it currently pays $16,000 a month in rent. Chaveas previously said reducing the size of BOPA’s staff was one cost-saving option under consideration.

The $35,000 a month BOPA would have saved through the layoffs is still significantly less than the $314,000 to $651,000 in monthly deficits projected through the end of 2024 by an accounting firm hired to review BOPA’s financial statements. In its analysis, Marcum LLP found the arts organization had for years been shifting money from a reserve account to pay its bills without later restoring the funds.

Scott’s administration said they plan to offer BOPA employees “the option to transition to employment with the City of Baltimore, where appropriate.”

City Council member Ryan Dorsey said the announcement from the mayor’s office caught him by surprise.

“I am disappointed and dismayed by the decision to terminate the BOPA contract in this manner and at this time. BOPA’s interim board has worked diligently to find a path to right this ship, and has shown substantial progress on a reasonable timeline, and while working in good faith with the city.” Dorsey said in a text message. “The move to terminate the contract pulls the rug out from under a group of devoted and competent volunteers working in the city’s interest, and does so without an appropriate plan in place.”

But City Council member Odette Ramos said she thought the city made the right call.

“BOPA has systemic difficulties that it would be very difficult for it to overcome,” she said. She added that none of the organization’s current problems reflect poorly on the current BOPA board, staff or CEO Rachel D. Graham “who donned the mantle of an impossible job.”

Ramos said she doesn’t think the decision will have a negative impact on the Baltimore Book Festival — an event held in her district, and with which she is heavily involved. She also anticipates that the two remaining public celebrations on BOPA’s calendar — New Year’s Eve fireworks and the Martin Luther King Jr. Day parade — will be a success.

“It’ll take a team effort to have these events come off without a hitch,” Ramos said. “But we can do it.”

Baltimore Sun reporters Kiersten Hacker and Lia Russell contributed to this story.

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