Many Cities Want to Copy Bilbao's "Guggenheim Effect." How Did It Work in the First Place?

A cooperative government, a groundbreaking museum director and a brilliant architect — and, of course, the Guggenheim brand itself.

This year marks exactly twenty years since the Guggenheim Museum Bilbao opened.

Set beside Kunshan, the county-level city next door to Shanghai, this small Spanish city covers less than one-twentieth the area and has less than half the population. In fame it may even trail Athletic Bilbao, the football club that has brought the city 23 cup titles.

But because the Guggenheim landed here, and because of the "Guggenheim Effect" that followed, a declining industrial city battered by flooding and economic crisis in the 1980s has spent the past two decades becoming livable again, step by step, turning into a city of art and culture full of life. At the first Lee Kuan Yew World City Prize in 2009, Bilbao beat 77 cities including New York, London and Melbourne to take the award. At the 2004 Venice Biennale, it also won the prize for the world's best urban planning.

The "Guggenheim Effect" is a term coined by the Harvard Graduate School of Design for the benefits the museum brought to Bilbao's local economy. It is now a research subject at universities everywhere.

According to a 2007 report by a Basque economist published by the American Alliance of Museums, the startup funding for the Guggenheim Museum Bilbao came to roughly $230 million (about 1.53 billion yuan): $100.8 million for construction, $12.1 million to architect Frank Gehry, $6.4 million to the executing architecture firm IDOM, about $9.9 million for land, about $44.5 million to buy the collection, $24.7 million for the Guggenheim Foundation to run the museum, and $30.3 million in other operating costs.

The bill was steep, but what came of it — and the scale it worked at — was excellent.

In its first year the museum drew 1.3 million visitors to Bilbao and added $210 million to the region's economic activity, $30 million of it in government tax revenue. By the third year the economic benefit had passed $450 million; ticket sales alone accounted for 4% of Bilbao's tax revenue, and the related revenue the museum generated for more than 20%. In six years the entire startup investment had been recovered, and the region was $175 million ahead.

Since it opened in 1997, different groups have imagined this museum in very different ways.

To local residents, the Guggenheim counts as something close to a spiritual anchor. To art lovers, it is a contemporary art museum worth a trip of its own. To ordinary tourists, it is a landmark to photograph and post on social media. To city planners and politicians, it may be an urban-revival strategy worth trying. And to architects and museum directors, whether a project like this can happen again is a question worth thinking through.

Quite a few cities have followed Bilbao's lead and approached the Guggenheim, hoping to import the museum as a piece of intellectual property that would revive local culture and the local economy — Las Vegas in the United States, for instance, and Vilnius, the capital of Lithuania. But Las Vegas closed its museum because the city was too commercial and too given over to entertainment, and Vilnius had its proposal thrown out by the Guggenheim Foundation over suspected misuse of funds.

Plenty of cities are in this much of a hurry to copy the "Guggenheim Effect," and they almost always miss what was particular about the Guggenheim's success in Bilbao — things bound up with the character of the place itself.

Besides the museum brand, unconventional and willing to take risks, there was the innovation Frank Gehry brought at the level of the building, a Bilbao that in the early 1990s was just stirring toward urban revival, and a regional government with foresight, clear thinking and a grasp of what cultural investment is worth. Only the combination of these made a lasting "Guggenheim Effect" possible.

What made them work was the people behind them: the ones who set the strategy, and the ones who carried it out.

A Regional Government With Foresight, Clear Thinking and a Grasp of What Cultural Investment Is Worth

For Bilbao, the Guggenheim is not simply a museum that collects and exhibits contemporary art. Bilbao is not New York, London or Paris, cities thick with museums, where each arts institution is one more delicious dessert adding to the city's appeal; losing any one of them would be a pity but would not hold the city back.

In Bilbao it is different. From the day the Guggenheim opened, it became the city's engine.

Which brings us to the hole Bilbao fell into in the 1980s.

Bilbao was once known for exporting iron ore and making ironware. In the 1980s an economic crisis hit hard at the heavy industry the city lived on, and in 1983 a flood wrecked the city center. Bilbao, once a major European center of steel and shipbuilding, saw its economy stall and its population shrink.

Every kind of urban ailment surfaced with it. Land use inside the city was a mess, pollution and traffic were serious problems, and the derelict docks and shipyards in the central area had drained the waterfront of any use, doing real damage to how the city looked. At the worst point, unemployment reached 25%.

This was the moment that tested what a government could do. The Basque regional government produced a plan for urban revival that looked sincere enough, with the goal of making Bilbao an international center for trade, culture and tourism.

The central question was how to build a cultural landmark with real weight.

Joseba Arregi Aranburu, former Spanish culture minister and one of the decision-makers behind the Guggenheim Museum Bilbao, remembers it this way: "We needed a museum that could show 20th-century art, and we needed the right building to go with it. Just at that moment we heard that the Guggenheim Foundation in New York was looking for a site in Europe to internationalize their architectural masterpiece."

In 1991, after repeated invitations from the Basque regional government and the Provincial Council of Biscay, Guggenheim director Thomas Krens went through many rounds of discussion with government officials before finally signing a preliminary agreement to build a new Guggenheim museum in Bilbao.

$230 million was no small sum for the government of a declining industrial city, but the Basque government put up 100% of the construction money anyway.

The museum went on the first plot the government's plan had picked out: an abandoned 35-hectare inner harbor.

Because two-thirds of the investment involved came from private investors, the government also set out clear goals for redeveloping the area around the museum, mainly improving the transit system and public facilities, adding new cultural service-industry projects, and making better use of the investment on offer.

That included the 29 subway stations inside the city designed by the British architect Norman Foster and finished in 1995, plus an airport terminal designed by the Spanish architect Santiago Calatrava.

If all this counts as a bet of more than $200 million, the Basque government was plainly the winner. The Guggenheim brought the local economy back to life, and the net value of the Basque Country's industrial output grew fivefold as a result.

At the end of 2014, Bilbao renewed its contract with the Solomon R. Guggenheim Foundation for another 20 years.

Not every government is willing to be this generous with a museum, even having seen what happened in Bilbao. Finland said "no" last year to the Guggenheim's $138 million plan for a new museum in Helsinki; even after the foundation revised its original proposal and cut the operating costs in the budget, the city council voted the project down.

The Cool Old Man Who Built the World's Most Spectacular Deconstructivist Building

Bilbao, trying to turn toward tourism, had nothing handed to it. No long history to trace, no striking local customs, no natural scenery either — there was very little to work with.

After weighing over and over how to draw outsiders in, the Basque government settled on building a modern art museum. Frank Gehry was the government's choice and the Guggenheim Foundation's, jointly. Opinions of Gehry's work split into two flatly opposed camps. One says: "You call that architecture? All he does is play games with crumpled paper. Crooked and warped, with no architectural beauty left in it." The other holds him up as a genius.

Gehry is 88. The most important work of his later years is the Fondation Louis Vuitton building in Paris, a technically difficult, intensely expressive building made of 12 sail-shaped glass structures.

When the Guggenheim Museum Bilbao was finished 20 years ago, Frank Gehry was already close to seventy. People like to talk about his "Dancing House" and the Walt Disney Concert Hall, both for their tension and their visual flow. That may be why the Guggenheim project picked him: a big-name architect who had taken the Pritzker Prize back in 1989, and a man capable of producing a visual spectacle.

Bernard Arnault, head of the LVMH fashion empire, chose Frank Gehry precisely because he loved the design of the Guggenheim Museum Bilbao; that unconventional building mass, he thought, was exactly what he had in mind for the Fondation Louis Vuitton.

Looking from the north bank of Bilbao's Nervión River across to the arts district on the south bank, the museum is the most conspicuous thing on the waterfront. It sits at the edge of the old town, with a main elevated road into the city crossing one corner of the site — the route anyone arriving from the north has to take.

The whole building is put together from a cluster of irregular, doubly curved volumes sheathed in titanium panels.

Facing north, into the shade, the main facade risked sitting in shadow all day. Gehry's answer was clever: he worked the building's skin into hyperbolic surfaces curving in every direction, so that as the daylight moves through the day, every surface throws off shifting light and shadow. That kept a building of this size from looking dull on its north side.

At the main entrance on the south side, one street away from the 19th-century buildings of the old town, Gehry broke the mass of the building into pieces to step the scale down and fit in. To deal with the likely conflict between the elevated bridge and the museum, he ran the building under the bridge and put a tower at the far end of it, so that the two appear to merge without getting in each other's way.

Inside, where curved surfaces stack upward and light pours down to meet them, the space is plain and unadorned, leaving as much of the eye-catching room as possible to the art itself.

But this work, which holds an important place in the history of architecture, did not win over local residents at first. "Odd-looking" and "neither one thing nor the other" were probably the most common verdicts. In the museum's early days you could always find residents standing under umbrellas, frowning and complaining.

Time proves things out, though. Every morning, as a musician beside the museum starts up on the saxophone, artificial mist rises slowly off the river and the museum takes in another wave of visitors from around the world — quietly changing the city's ecology as it goes.

Today, talking about going back to Bilbao, Gehry says he feels "treated like a hero." "I really do get on well with the people there now."

A Chain-Museum Brand With Pulling Power

The years Bilbao spent trying to revive itself were also the years the Guggenheim wanted to extend its map into Europe.

The Guggenheim began as the byproduct of one American collector's hobby, Solomon R. Guggenheim's, and opened its first museum in New York in 1937.

But the man who turned it into the best-known private modern art museum in the world was not Solomon R. Guggenheim. It was Thomas Krens, its fourth director, from 1988 to 2008.

Krens was educated across two fields, economics and art history. As director of the Williams College Museum of Art he built an ordinary university gallery into a regional star, with outsized exhibition space and a rich collection. Unlike the cautious style of other museum directors, Krens always stressed "running" a museum: revenue, performance, economies of scale — terms out of economics and management — became the measures that mattered in his work.

To widen the Guggenheim's influence, cut costs and lower operating risk, Krens launched its global chain-museum model, an answer to the funding squeeze that museums everywhere feel to some degree.

The model has not always worked. Among the failures: in 1992 the foundation "incubated" the Guggenheim SoHo in New York, and closed it in 2001 when visitor numbers came in below expectations. The attempts mentioned earlier in Alaska, Vilnius and Helsinki also came to nothing.

Even so, using "Guggenheim" as a brand and signing up franchisees — local governments, for instance — is still a route that works, and the Guggenheim Museum Bilbao is the model case, no question.

Landing in Bilbao was also a decision Krens pushed hard for at the time. Not long after taking over as director, he wanted a new Guggenheim in Europe, one big enough to hold new acquisitions and with architecture as extraordinary as the Frank Lloyd Wright headquarters in New York, in order to pull in more visitors.

Bilbao was not his first choice. Krens leaned toward a site in a city with a cultural name — Wolfsburg, Barcelona, Seville. But Europe at the time was wary of what it read as American cultural encroachment, and both Spain's central government and its regional ones responded coolly to his pitching. In the end the project fell to Bilbao, capital of the Basque Country, a region in northern Spain then known for separatism and terrorism.

That may also be why the Guggenheim Foundation put forward unusually harsh terms: the city would not only pay a fortune to build the new museum, but also a large separate fee to the foundation for the new museum's name, its collection, its loan exhibitions and its management.

The Finnish architect Juhani Pallasmaa once questioned the Guggenheim's chain model: "This project stresses the consumption of art and the pulling in of tourists, rather than art's role in advancing culture and humanity. It cares more about globalization and consumerist art, both of them contested, than about local artistic traditions and practice."

Seen from the other side, though, the Guggenheim's deep collection, its taste and its know-how were valuable, ready-to-hand resources for a ruined city desperate to come back.

To keep itself running, the Guggenheim Museum Bilbao bought a great many modern works under the foundation's guidance. Thanks to the foundation's professional eye, it acquired work by some of the most influential artists of the day — Joseph Beuys, Jeff Koons, Robert Rauschenberg. And to suit local taste, the museum set aside galleries for contemporary Basque and Spanish artists, which laid the ground for a particular relationship between the Guggenheim and art in Bilbao.

There is no shortage of people who want to build another Bilbao. Apart from the various local governments that keep approaching the Guggenheim Foundation, the Guggenheim itself has found that Bilbao's success is hard to repeat.

Image sources: blogs.deusto.es, guggenheim.org