A settlement signed in the middle of the night Tuesday and approved by New York Surrogate Judge Nora S. Anderson clears the way for an arts foundation to be located at the late Huguette Clark’s Santa Barbara estate — but there’s a hitch.
A group led by former Santa Barbara mayor Sheila Lodge that was cut out of the negotiations has filed an appeal, meaning that the deal “could have to be redrawn,” according to NBC News investigative reporter Bill Dedman. The question could ultimately end up in federal court, Dedman said.
Clark’s will established a Bellosguardo Foundation, named for her Cabrillo Boulevard summer home, to foster the arts. Lodge’s group was first allowed by the judge to take part in the intense negotiations involving Clark’s distant relatives. But Judge Anderson withdrew approval last week after Lodge’s group objected to the settlement and the relatives objected to the Californians participating, Dedman said.
After a secret hearing the judge ruled against the Lodge group, which filed its appeal Monday. It wanted to represent Bellosguardo in negotiations. The judge has not yet officially signed off on the deal. The settlement sets up a New York Bellosguardo Foundation.
“If the New York appeals court doesn’t allow the California group to participate in the settlement the issue could be revisited in a California court when the New York Bellosguardo Foundation tries to take control of the property,” Dedman said. The conflict between states could become a federal case, Dedman said.
There could be dueling foundations. The settlement sets up an arts foundation controlling Clark’s Santa Barbara property, worth an estimated $85 million to $100 million. The foundation would receive Clark’s $1.7 million doll collection and $4.5 million in cash. Most of Clark’s fine art collection would be sold. Many paintings already at Bellosguardo would remain, plus her own art work. Another monkey wrench could be thrown into the deal if the IRS refuses to waive up to $18 million in taxes on Clark’s gifts while alive. If so, this could require selling Bellosguardo.
The deal, splitting up Clark’s $300 million estate, gives $34.5 million to the distant relatives, most of whom never met her, although her will cut them out completely.
According to settlement details released Tuesday, the approved deal calls for a Bellosguardo board of at least 10 members, including Clark’s Santa Barbara attorney, Jim Hurley.
According to the stipulation, the board will consist of Hurley (or a person nominated by him), a person nominated by the Clark family, a person nominated by the Corcoran art museum, and seven nominated by the mayor of Santa Barbara.
[UPDATE]: Santa Barbara Mayor Helene Schneider has issued a statement on the settlement and her role in nominating members to the foundation’s board of directors:
“I have been tasked by the New York Attorney General’s office to assist in the creation of a not-for-profit Foundation, required by the Huguette Clark Estate settlement. My role will be nominating seven individuals to the Attorney General’s office who will serve on the initial Board of Directors. These seven individuals will be part of a 10-member Board, with the other three members nominated by the Clark family, the Corcorcan Gallery and Ms. Clark’s former attorney James Hurley. This Board will oversee the property and the assets as outlined in the settlement upon closure of the will.
“In the coming weeks, I will establish a working group to assist me in determining these seven nominations.
“The negotiations led by the New York Attorney General’s office ensures that the Santa Barbara community is well represented by creating the Foundation Board of Directors in this manner. I believe the Attorney General’s office worked to follow Ms. Clark’s wishes to the best extent possible under the circumstances, and respected the Santa Barbara community’s strong desire to see this property utilized in the public’s interest. The ultimate goal is to open the Bellosguardo house and gardens to the public as a center that will foster and promote the arts.
“I believe this settlement gives our Santa Barbara community an amazing opportunity to create a magnificent organization that will significantly add to our strong artistic and cultural heritage.”