Is the new Lucas Museum of Narrative Art a private development or a public work? That question is at the heart of a $1.9-million lawsuit filed this spring against the museum by an electrical contractor, which claims that the George Lucas museum should have been subject to additional red tape as a public work because the state granted the museum a 99-year lease at an annual rate of $30.
The suit, one of four recently brought by contractors alleging nonpayment, claims the museum, along with its prime contractor Hathaway Dinwiddie Construction Co., and its first-tier subcontractor Siemens Industry, Inc., “actively promoted, contracted, and labeled the construction as a ‘private, non-profit development’ to bypass the rigorous administrative, registration, and bonding mandates of the California Public Contract Code, Civil Code, and Labor Code.” The plaintiff, J.E. Snyder Electric, worked as a subcontractor for Siemens and was not directly hired by the museum.
The legal drama comes as the highly anticipated $1-billion Lucas Museum — co-founded and paid for by Lucas and his wife, Mellody Hobson — readies for its Sept. 22 grand opening in Exposition Park. It shines fresh light on the government deals made to bring the museum to Los Angeles after its founders hunted for a site for many years.
“The Lucas Museum is one of the largest private cultural gifts in American history: more than $1 billion, every penny of it private. No public funds. No public financing. No public debt,” said the museum’s attorney Orin Snyder. “The claim that this is a ‘public work’ is a fiction, manufactured for leverage in a routine payment dispute by a subcontractor who has no direct contract with the Museum.”
Orin Snyder noted that the museum’s lease with the city and state makes clear that it’s a privately funded project and rent is one part of a larger exchange providing public benefits. As part of its lease, the museum paid $490,000 per year to the state while surface parking was partly unavailable during construction — a figure that rose to $2.1 million per year for the period of time it was fully unavailable. It also upgraded an adjacent soccer field, provided two new parking areas for the state with more than 1,375 spaces and renovated facilities at nearby Jesse Brewer Park. In addition, it agreed to build and privately maintain 11 acres of public park space as part of its campus, which is available for state use up to five times per year.
Snyder Electric’s lawsuit is attempting to demonstrate that the “private” label still does not apply based on the $30 annual land lease.
“We contend this rent concession makes the project a public works,” Snyder Electric’s attorney Christopher Hook said, citing the California Labor Code. “Ultimately this will be a question of law for the Court to decide.”
Snyder Electric co-founder John Snyder said in an interview that he has repeatedly been promised payment from Siemens that has never materialized. “We’ve taken out loans to pay interest to finance our debt because we’re not being compensated from them,” he said.
The museum, which was supposed to be built according to a 36-month construction plan following its 2018 groundbreaking, was originally scheduled to open in 2021, but that timeline got pushed back repeatedly, beginning with COVID-19 pandemic-induced delays. Various possible launch dates were set along the way, including 2023, 2025 and, finally, 2026. It was during these delays that Snyder Electric claims unpaid bills began to rack up.
Snyder Electric alleges in the suit that the Lucas Museum should have obtained a payment bond for the museum construction, which is collateral that is required for a public works project in California, and serves as protection for contractors seeking payment. The suit says Lucas did not do that, taking the position that it was a private entity not subject to the bond requirement.
The museum also was never registered as a public works project with the California Dept. of Industrial Relations, according to the lawsuit.
Hathaway Dinwiddie, which is named as a defendant in Snyder Electric’s lawsuit, has also sued the Lucas Museum, alleging breach of contract for payment “in excess of $35,000.” (The three additional contractor lawsuits seek $272,000 to $439,000.)
Siemens and Hathaway Dinwiddie declined to comment on ongoing litigation.
“In truth and in law, the Project is, and at all times was, a ‘public work,’” the lawsuit says, “because it is a work of construction paid for in part out of public funds, which explicitly includes the transfer of public assets for less than fair market value and the lease of public land for nominal or below-market rent.”
Since the land is owned by the state, it is categorized as tax exempt by the Los Angeles County Assessor.
How the museum got its land deal
The primary lease agreement between the Lucas Museum and California Science Center, a state agency, is dated July 28, 2017. These types of token land deals are not unprecedented when the city or the state is intent on attracting a project it believes will be for the public good. City officials offered billionaire philanthropist Eli Broad a $1-per-year lease for 99 years for downtown land on which to build his eponymous museum in 2010, which created public outcry about whether L.A. should hand public land to billionaires. Broad said at the time the backlash angered him.
“It just burns me that people are saying they’re giving me, a billionaire, $1 a year for nothing,” he told The Times in 2010, “without looking at the public benefit that’s being created.”
In the face of continued pushback, Broad ended up offering $7.7 million for the 99-year lease.
The Lucas Museum’s trek to establishing itself in L.A. began more than two decades ago, but ramped up in 2014 when Lucas selected Chicago as the site for his new building. Plans were drawn up for a lakefront site near Soldier Field, and city officials offered Lucas a $10 lease on the land for 99 years. Ongoing litigation stalled the project and Lucas next looked to San Francisco’s Treasure Island, where the city asked for roughly $26 million for a 4-acre site (an amount considered by some to be above market value).
Lucas ultimately chose L.A., where he was met with a better deal and less red tape.
Former L.A. Mayor Eric Garcetti, who was in office at the time, said in a recent interview with The Times that, “Public land should be used for a public good. This was one of the greatest public goods to arrive, not just in Los Angeles, but in America in the last couple decades.”
“Mellody and George were increasingly frustrated at the ability to navigate city bureaucracies, and we wanted to show that L.A. was a place you can get things done,” Garcetti said. “We’d want to make this both the most frictionless route, both in terms of the cost upfront, the bureaucracy and approvals involved, and ultimately the impact in the community that it could have.”
Orin Snyder said nominal rent is common at Exposition Park, citing the Natural History Museum’s $1-per-year lease. The Natural History Museum operates as a public-private partnership with Los Angeles County.
The museum, which charges $25 for adult admission and is free for children under 17, opened for member previews late last week. (Memberships range from $160 to $600 annually.) About 1,300 pieces from a collection of more than 40,000 works are currently on display in exhibitions that have been curated largely by Lucas himself. These include nontraditional museum offerings such as manga, children’s book illustrations and comics, as well as props, costumes and vehicles from “Star Wars.”
Times freelance writer Jane Horowitz contributed to this report.
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