The long, sad saga of National Childrens Museum: Latest chapter, back to D.C.

On a gray October day — while toddlers navigated ramps and tunnels, preschoolers clambered aboard a pretend firetruck, and older kids studied snakes and frogs at the National Children's Museum — some very serious grown-ups formally sealed its fate.

The questions they had debated and decided months earlier were simple yet fraught: Continue to bleed money at National Harbor in Prince George’s County, in cramped storefront quarters difficult to reach without a car? Or return to the District, with its network of buses and subways to deliver many more tourists and locals to new, larger digs and attempt to raise serious cash for a hometown revival?

The vote by the board was unanimous: Cut the losses and leave. Even before the museum closed Jan. 4, site proposals were being solicited. The building would have to be near a Metro station and parking, between 40,000 and 60,000 square feet with one interior space soaring two stories, and for sale or long-term lease with occupancy no later than early 2016.

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But potential lenders, brokers and developers will require more than a wish list. They’ll want hard financial details.

As of mid-2013, the museum had $5.4 million in net funds and assets, according to its most recent public IRS filing. And while longtime board chairman S. Ross Hechinger will not divulge current numbers, it is possible to follow some of the money in this saga of what-ifs and might-have-beens. Over time nearly $17 million in public monies — paper assets all — appeared in the plus columns of those tax reports as conditional or repayable pledged aid, not cash in hand, that was never used and vanished when the economic climate crushed all hopes of construction in the nation’s capital or at National Harbor.

The museum’s most solid financial year was 2005, following the sale of its property behind Union Station in 2004 for $24 million, a sum officials hoped to leverage into $100 million for a striking new home near the Mall.

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Since 2009, Maryland, Prince George’s County and the Maryland-National Capital Park and Planning Commission have pumped $7.2 million into this cultural asset for kids, assuming it would be at National Harbor for the long haul. It is not yet known how much help District officials — who pleaded with the museum to stay eight years ago — are willing to provide, and whether the region’s wealthy young entrepreneurs can be recruited as major donors and trustees.

The museum went to Prince George’s as a last resort, lured by free land at National Harbor on which to erect a splendid new building to replace the museum’s home of nearly three decades, a crumbling 19th-century nunnery on post-riot, pre-hipster H Street NE. The museum essentially remained homeless, with an online presence, traveling exhibits and occasional staff appearances at community events, until it reemerged in 2009 as a small preview space at National Harbor; the storefront opened three years later.

The museum is not the only local institution in financial distress. The Artisphere in Rosslyn is set to close in June, having received $11.1 million from Arlington County since 2010. Last year the venerable Corcoran Gallery of Art was taken over by George Washington University and the National Gallery of Art.

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One potential problem for the museum may be competition for money and philanthropic or business partners. This spring, lawyer and former board member Jane Cafritz plans to launch a mobile educational lab to serve schools, libraries and community centers in the District. She also wants to open the Washington D.C. Children’s Museum near the Fort Totten Metro in Northeast, on property owned by the family foundation of her developer husband Calvin Cafritz. This D.C. museum, she said, “will inspire children to discover and learn through hands-on activities so they may develop and acquire the 21st-century learning skills needed to succeed as citizens, workers and leaders.” And might she collaborate with the National Children’s Museum? “I would never say no.”

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The National Children's Museum's board has always been long on hope and deep in its commitment to serve children, especially the under-served, through creative play, stagecraft, dress-up, storytelling, art, music, nature study, literacy programs, "Sesame Street" tie-ins and a great embrace of the world's diverse cultures. Some parents cherish the largely low-tech space as an unplugged, imagination-fueled oasis for kids. Others have blasted it as unchallenging to older children.

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The point of finding a larger space is to “accommodate growth and innovation,” said Hechinger; ideally it will include “a mixture of both existing and new exhibits.”

Asked what the Association of Children’s Museums expects its members — including the National Children’s Museum — to provide, executive director Laura Huerta Migus explained: “There have to be hands-on learning environments designed to teach children about the world, with tactile play; manipulative, creative and imaginary activity; role-playing; thinking through a narrative; social play; all the experiences.” Displaying collections of art or objects is not required for designation as a museum.

The good news for the National Children’s Museum is that the change of venue may attract new major contributors. “I think we were facing a somewhat uphill struggle raising money for this project in Prince George’s County,” said architect Roger L. Lewis, a 15-year board member who stepped down in June. Potential donors often asked, “ ‘This is a national children’s museum. Why isn’t it in Washington, D.C.?’ ”

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The District has changed dramatically since the museum moved out. The city has become a tech incubator, and a magnet for affluent, multi-culti millennials who have spawned a mini-baby boom of potential museum-goers. How ironic that 11 years after selling its derelict H Street home, that neighborhood is sizzling.

In the arc of the comeback story, it is now crunch time for the National Children’s Museum, a rare third chance to get it right.

I f all had gone according to plan, the former Capital Children's Museum — the loftier "National" title it sought from Congress was bestowed in 2003 — would be engaging young visitors at the Smithsonian's Arts and Industries Building on the Mall. Or from a glorious César Pelli structure in nearby L'Enfant Plaza. Or in a $182.6 million, 150,000-square-foot Pelli building at National Harbor on land donated by developer Milt Peterson.

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Two of those ideas had been the stuff of wild desire: Arts and Industries is now part of a proposed $2 billion Mall overhaul (and may become the Smithsonian American Latino Museum). When a congressman suggested putting a Latino museum there at the time, Children's Museum officials switched to L'Enfant Plaza, the dreary 1960s office-hotel complex that was poised for a sweeping makeover by Chevy Chase-based JBG Cos.

Since the Children’s Museum’s reduced staff already had offices there, JBG suggested the museum occupy the lower level and build a dramatic promenade-level entrance. Both parties chose the renowned firm Pelli Clarke Pelli, giving fundraisers architectural bragging rights.

Kathy Dwyer Southern, then the museum’s chief executive, rhapsodized about L’Enfant’s many Metro lines and the easy walk between all those Smithsonians and her museum. With visions of major donations pouring in, the board spent freely from its $24 million H Street nest egg and newly raised funds.

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"Alan Hassenfeld, the chairman of Hasbro, came on board as a volunteer, to chair the capital campaign," Hechinger said. "Everything is ramped up; the stars were aligned beautifully. We had meetings in New York. Then in October 2006, JBG goes ppppfffffttt and pulls the rug out."

The developer saw what museum officials, and countless other people around the world, did not — economic storm clouds — and delayed its project five years.

That decision proved financially hobbling to the museum. Between mid-2006 and mid-2007, the period when JBG suspended work, the museum paid $1.6 million to Pelli, and for such other items as engineering, interior design plans, project management, legal and consultant fees tied to the District site. The newly moot $10.8 million D.C. bond pledge also disappeared.

In 2007, after months of talks, the board accepted Milt Peterson’s invitation to cross the Potomac. Between mid-2010 and mid-2011, the museum’s net funds and assets appeared to plummet. About $4.5 million was spent for actual operating expenses; an additional $1.8 million was for design and architectural costs. Roughly $14 million went to paper write-offs for uncollected pledges, the Maryland state construction appropriation and prior write-offs of conditional grants. The good news was $1 million in revenue.

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To National Harbor, the museum was a niche trophy. “At our inception, we wanted to bring unique opportunities, and the Children’s Museum would be one of those unique attractions,” said Milt Peterson’s son, Jon, a principal in the family firm. Jon Peterson believed it would draw a coveted demographic to the mix of conventioneers, shoppers and diners. “When the Children’s Museum opened, there was definitely a change in the environment — there were a lot of moms with strollers walking around National Harbor,” he said.

But the move coincided with the recession that battered nonprofit organizations everywhere. Moreover, the offer of a free seven-figure tract depended on meeting a critical fundraising goal by New Year’s Eve 2008. “The deal was we needed to raise enough money to start and complete construction,” Southern said. “It was a totally responsible deal. We were still in an economy that looked like it was expanding. We brought Pelli forward with us. It was a gorgeous building. Milt Peterson loved it. And then the world collapsed.”

With the deadline blown, Jon Peterson opted to make any future land transfer a sale, not a gift. Nonetheless, the board pushed ahead with Pelli, hoping, if not fervently praying, that a fabulous building by a famous architect would attract substantial private and public funds. It never happened.

“We experienced what most nonprofits around the country experienced during the recession. Fundraising went away, and that’s when we really started downsizing, right-sizing,” Hechinger said of the storefront, 17,000 square feet of activity and exhibit space and 5,000 square feet for offices. “Kids and families wouldn’t really much care about what the building looked like as long as we have exhibits and programs that stick with our concepts, ‘inspiring kids to care about the world.’ ”

One key Prince George’s official believed the board over-reached and under-managed. “Really, they would have liked to have $500,000 a year, and we couldn’t realistically do that, not for one organization,” said budget administrator Thomas L. Himler. Last October, he turned down a $190,000 request for operating expenses, citing the museum’s “lack of a viable business plan. Literally, it was payroll to payroll. ... When we gave them $250,000 and tried to get them to figure out a business plan, they always wanted to go bigger and better.”

Hechinger disagreed. “We believe we did have a viable business plan for National Harbor, one that included public support as a crucial element to future, long-term success. There are no nonprofit children’s museums in the U.S. that operate without municipal or state support.”

He also equated the museum’s expansion plan with smart growth, and sought additional public money for an “Outdoor Experience” focusing on sustainable energy, gardening and the Potomac ecosystem. He was certain it would enrich the gate and lure more visitors to the indoor experience. Himler thought otherwise.

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The National Children's Museum at National Harbor could have been Southern's second area triumph after the 1998 debut of Baltimore's Port Discovery, which she ran for almost five years while helping to raise $32 million for its launch.

In 2001, she came to the National Children’s Museum, leaving her Baltimore successor to grapple with a mixed financial legacy. “Like a lot of things in this arena, people make projections for attendance, revenue and fundraising, which they don’t really know, and after the first year or so, those projections didn’t pan out, and they caused difficulty,” said Alan M. Leberknight, who spent two years as Port Discovery’s second CEO. He imposed austerity measures that brought layoffs and staff restructuring.

The National Children’s Museum also underwent belt-tightening. Southern retired in mid-2012, six months before the storefront welcomed its first guests. Shortly before it opened, the museum projected attendance at 480,000 a year. The reality was 277,962 in just over two years.

Jon Peterson said he tried to help, up to a point. With the Pelli project shelved, National Harbor provided free rent for the Launch Zone, a 2,700-square-footteaser space that opened in 2009 to keep the museum in the public eye for three years.

But within months of the 2012 storefront opening, the museum fell behind in its $17,650 monthly rent. Peterson forgave the last seven months of 2013 and slashed the lease price by half for 2014. Prince George’s provided $310,000 to keep the doors open. Meanwhile, Hechinger and three fellow board members jointly gave and loaned close to $1 million for cash flow from mid-2012 to mid-2013. An additional $750,000 came from two charities with ties to other trustees: $250,000 from the Hillside Foundation, represented by Allan M. Holt, a Carlyle Group principal; and a $500,000 HVAC system from the charitable arm of Constellation Energy . At the time, former Baltimore Ravens cheerleader Molly Shattuck — who taught some cooking and exercise classes at the museum — was married to Mayo Shattuck III, then chief executive of Constellation. She left the board in November after she was charged in a sex scandal; she has pleaded not guilty.

By 2013, relations between the board and landlord had blown up. In an angry Sept. 12 letter, Hechinger informed Peterson (and cc’d Gov. Martin O’Malley and other lawmakers) that the museum would close if certain financial conditions were imposed.

Hechinger called it “bitterly ironic” that National Harbor made demands on the struggling nonprofit while the Petersons received millions from the state and county for roads and other infrastructure costs.

Jon Peterson was unmoved, estimating that the firm provided the museum $2.6 million in forgiven rent and other expenses. Ultimately, “we needed to do what we thought was best for National Harbor and the Peterson Companies. ... We offered them terms that were still, in our mind, very, very generous.”

For $2.6 million, Peterson will soon reclaim a storefront that Hechinger said cost the museum $4.8 million to transform from a dirt-floored cavern without lights or ventilation into a two-level destination.

Does Hechinger consider this generosity? “I’ll leave that for you to decide.”

Now all talk is about the future. Calling itself a "Museum on the Move," the National Children's Museum will, until it finds a new home, send some of its exhibits to branches of the D.C. Public Library, and take part in community events.

Despite anger among District officials after the board announced the museum’s departure in 2007, influential allies are saying welcome back, including D.C. Council member Jack Evans, chair of the finance committee and a former museum trustee. It’s unclear what the museum can expect from the city, given its $256 million budget gap.

Money aside, there will also be fierce competition for visitors, whether from the Smithsonian or more specialized rivals:

“We have seen the growth of a lot of attractions geared to children in the area,” Hechinger said. “We have obviously heard about Jane Cafritz. You see Build-A-Bear [shops], places where you make pottery, small storefronts that call themselves children’s museums.”

There is also the International Spy Museum, reportedly negotiating with JBG for a L'Enfant Plaza site, and the National Building Museum, near booming Penn Quarter.

“Once we knew in 2004 that the Children’s Museum was closing for three or four years, we added more programs to pick up the slack,’’ said Building Museum executive director Chase W. Rynd.

The National Children’s Museum faces one unusual challenge: finding homes for 100 sculptures made of recycled junk — smashed crockery and bangles, fabric, hair, tiles, cement and wire — crafted in 1985 for a “fantasy garden” at the old H Street site during the nationwide Festival of India. It was the first overseas commission for the revered Indian folk artist Nek Chand, who in the 1950s began secretly creating a 12-acre garden in a public forest in the state of Punjab.

Today the greatly expanded garden bills itself as India’s second most popular attraction after the Taj Mahal.

When the Children’s Museum closed in 2004, the statues that survived outdoors for nearly 20 years were stabilized and stored in a Baltimore County art warehouse at a cumulative cost approaching $400,000, Hechinger said. Three figures were sold to a New York folk art dealer for $84,000 to finance the stabilization work, and dozens more were donated to nonprofit organizations, including the American Folk Art Museum in Manhattan, because under de-accession protocols they could not be sold on the open market.

The Association of Children’s Museums will help the National Children’s Museum give the rest to kids’ museums across the country.

The self-taught Nek Chand, a humble road inspector working nights by firelight in Chandigarh, embodies creativity, making art from domestic detritus.

Now 90, he still receives visitors at his Rock Garden. Inside a large, cluttered office, a framed poster-size document leans against a table. Signed by Mayor Marion Barry, it proclaims Oct. 5, 1985, Nek Chand Day in Washington.

The H Street garden “was a difficult thing to make, but also wonderful,” the artist told this reporter last year in India.

Now comes a difficult project for the museum: raising the kind of money the current board — some of whose members have been in place for decades — could not.

John Wm. Thomas, a former fundraising consultant for the museum, has a few ideas. “I would recruit many of the young entrepreneurs from the I-270 corridor, the city and down into Virginia, who really care about the community and have kids. I’d work with the sports team owners: the Lerners, Ted Leonsis, Dan Snyder. I’d create alliances with institutions like Children’s Hospital and local universities.”

Although museum officials continue to blame their woes on the recession, National Harbor’s lack of public transit and affordable space to expand, the possibility of cultural hubris cannot be ignored.

Hechinger demurs. “In terms of whether or not we were too ambitious, when things are looking so wonderful, it was certainly our vision that this would be fantastic. Basically what I am saying here is you have to dream big, you have to have a massive, big idea.”

And when it does not work, presumably you try again. As he has doubtless learned, this is not child’s play.

Washington journalist Annie Groer writes widely about culture, politics and design. To comment on this story, e-mail wpmagazine@washpost.com or visit washingtonpost.com/magazine.

E-mail us at wpmagazine@washpost.com.

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