Tuesday, September 08, 2009

A Long Beach Question

Felix Salmon wonders why the Long Beach Museum of Art would run the risk of losing half a million dollars a year in operating support from the city by failing to repay the $3 million loan the city says it owes:

"I find that hard to understand: it should just take the $569,000 and use some fraction of it to pay off the $3 million over time, spending the rest on art and programming. Or is there some good reason why the museum’s implied discount rate is so incredibly high (over 18%)?"