LONDON—“They promised him a pyramid and demolished it bloody quickly,” is how one informed observer characterizes what just happened to the famed 800-piece collection of silver, gold boxes and micromosaic treasures that belonged to Sir Arthur Gilbert, who died in 2001. For almost a decade, it has resided at Somerset House, a palatial 18th-century Neoclassical quadrangle that stands between the Strand and the River Thames. But last December, to the shock of many, it was announced that this elegant complex would no longer be the setting for Gilbert’s trove. Why? Where will the collection move?
And what will happen to Somerset House, whose fate has been so intertwined with the collection?

To answer these questions, one must trace the story to its beginnings, when house and treasure seemed perfectly paired. In 1995, after failing to reach an agreement with the Los Angeles County Museum of Art, where much of his collection had been displayed, the London-born, California-based Gilbert met with Jacob Rothschild. (They were introduced by Gilbert’s friends and dealers, the Nortons, of S.J. Phillips, on Bond Street.) Lord Rothschild was then chairman of the Heritage Lottery Fund (HLF), established in 1994 to distribute national lottery money. It struck him that Gilbert’s precious objects would make a grand addition to Somerset House, whose riverside south building had become vacant. His idea of turning the property into a group of fine- and decorative-arts museums was given a big boost when Gilbert, assured that his entire collection would be displayed there, agreed to give it to the British nation. The creation of various trusts then followed. In 1997, as a result of Lord Rothschild’s support and influence, the government established the Somerset House Trust to operate the complex for the public’s benefit. The Heather Trust for the Arts would hold the collection on behalf of the people and lend it to the Gilbert Collection Trust to manage. Somerset House Trust then gave the Heather Trust a 120-year lease on 12,700 square feet of the south building for galleries, with additional space allotted for ancillary needs. That same year, the HLF granted £30 million ($61 million) for restoration of the building, which began swiftly. A further £10 million ($20 million) was later added as an endowment for the collection. This remains one of the largest grants in HLF history and one that would not have been made without Gilbert’s donation, then valued at £75 million ($128 million). In 1999, the collector, who made his fortune in real estate, was knighted in recognition of his cultural contribution.

With much fanfare, Somerset House reopened in May 2000. It had a new fountain court made possible by a donation from Lily Safra and named for her late husband, Edmond; a 688-foot riverfront terrace with a glass walkway linking it to Waterloo Bridge; and—at its dazzling core—the Gilbert Collection. The palace’s planned transformation seemed well under way: The Courtauld Institute and Gallery had occupied the building that faced the Strand since 1998. In November 2000, five months after the Gilbert Collection’s arrival, the Hermitage Rooms opened above it, off the central hall. This outstation of the St. Petersburg museum would stage temporary, privately funded exhibitions relating to its parent’s collection.

Then this past November, the Hermitage Rooms—also backed by Lord Rothschild—suddenly shut down. Although the Russian museum claimed this reflected a “change of focus”—curatorially, it is no coincidence that the Hermitage is intent on expanding its collection of 20th- and 21st-century art—it is widely rumored that the closure occurred because the project’s chief benefactor, Mikhail Khordovsky, is now in a Russian prison. A few months later, the Gilbert Trust, which had shared running costs with the Hermitage Rooms, shut its exhibition space as well.