I did not anticipate the total collapse of the museum,” former Las Vegas Art Museum (LVAM) executive director Libby Lumpkin told ARTINFO earlier this week. “The simple fact is that Las Vegas is experiencing an economic Katrina and the museum had not yet achieved the kind of endowment that would have allowed it to weather the storm. As difficult as it is to accept, the board made the right decision to close the doors. The alternative would have been to transform the institution into something far less than any of us wanted it to be.”

But by the time the news broke on February 20 that the museum would close due to a dramatic drop in revenue, Lumpkin was long gone. The Texas-born art historian, who was founding curator of the Bellagio Gallery of Fine Art in Las Vegas and had joined LVAM in 2005, resigned in early December, after pressure from the board to cut the budget. Over the past few days, she has been back at the museum, having volunteered to “consult on the disposition of works in the permanent collection, archives, and other important museum materials.”

LVAM’s entire staff has now been let go, and the museum is to close tomorrow. It will remain an entity, in the hopes that it may reopen when the economy steps up again, but for now the art scene in Las Vegas is pretty bleak. Earlier this month, London-based collectors Poju and Anita Zabludowicz postponed indefinitely their plans to build a museum of contemporary art downtown.

A month after her departure from the museum, Lumpkin, who is author of the book Deep Design: Nine Little Art Histories and has taught at the University of Nevada, Las Vegas (UNLV), California State University Long Beach, Yale University, Harvard University, and elsewhere, spoke with ARTINFO about LVAM’s dilemma and the problems facing smaller museums across the country.

Your resignation was described in the press as a “shocking blow” to the arts community in Las Vegas. Is it true that the board had cut next year’s budget in half, to less than $1 million, and demanded layoffs?

Actually it was less than half of the original budget. And there would have been layoffs. It was challenging to assemble a staff in Las Vegas. It’s not a city that attracts experienced museum staff. And at the same time, we were trying to develop a serious museum, and we were doing original exhibitions, so we were doing all the things that big museums do on a more modest scale. I did a lot of the curatorial work. It was exhausting, doing everything! Ultimately, I hired some very smart, sharp young people and essentially trained them. I had a tight team there. Including me, there were just four professional staff with museum experience. (On top of that we had some professional staff in accounting and development.) I was faced with letting most of them go. When I made my decision, I think it was more emotional than logical, but in retrospect it was absolutely logical, because turning out these people who moved here at their own expense, who were facing a pretty dismal job market — in this city, a zero job market — wasn’t something I was willing to do. I was the most expendable person, though the board didn’t see it that way.

What happened in the two or three weeks leading up to your decision?

I had been revising and re-revising budgets, and I had laid off two people who were not essential staff and were in the kinds of jobs where they could find comparable employment in the city. We were making tremendous efforts, and I had made some suggestions about how we could cut the exhibition program and other things. Then the executive board asked me to plan for some more dismissals, so I went back to the drawing board and tried to get the budget down as far as I could. It appeared that if the board could come up with another $100,000 or $200,000, nobody would have to go, and everything could hum along reasonably well. But they were not able to do that. I told them I wasn’t going to do a lower budget, that I would go if it got down below this number. I had already made compromises. I informed the executive board that I would be the first to go. I guess they thought I was playing a card game. And I suppose I was. I lost that hand.

But you were in a no-win situation?

Not only was I was faced with doing something dreadful to young people, but I would also probably never be able to hire anyone again. No one would come to work for me if I just casually lopped off heads when it got hard while I kept going, even at a reduced salary. I read somewhere that the average term of a director in a provincial museum is about five years. Based on that, I would have spent my last year and a half idling with no money.

All of this happened as a result of the global economic crisis?

Yes. Las Vegas has been hit especially hard. It’s a different town from what it was a year ago. It feels different, it looks different. It’s palpable. There was enormous speculation in the housing market. The value of my own house has bottomed out. It’s pretty grim right now.

What specific issues do provincial museums face in the economic crisis, LVAM in particular?

We were aiming high, and that was part of our problem. But our biggest problem was our location. We were 10 miles off the strip in a hard-to find facility that had some shortcomings — no humidity control, for instance. So we desperately needed a new facility. We began preparing for a capital campaign, but the economy just killed us. We have a lot of support, but in Las Vegas everything is new. They are building a new performing arts center downtown. There is a ballet company and a symphony and some opera companies, and everyone needs a facility. An added challenge in Las Vegas is that a fairly small number of people give. Eight or nine years ago there had never been a capital campaign of any kind in the city.

Capital campaigns for building expansions have been all the rage for the past 10 years.

Yes, and there was a lot of private money out there. That’s changed. To ensure that you go forward in good times and bad, you need some public support as well. It brings money into your community. There are cities that really count on museums to revitalize the business community. My strategy was to create a museum of substantial size that would become a museum of record, whose imprimatur would matter in the international community, not so much because I had visions of grandeur, but because I felt that was the only way it could work. The other Las Vegas museums, like the Bellagio, which changed radically after Steve Wynn sold that property, and the Guggenheim — I don’t think they would argue with me when I say this — are showcasing exhibitions. Don’t get me wrong; I am sorry the Guggenheim left.

How did things change after the Guggenheim left? Did you learn from watching them make a go at Las Vegas?

I’d been watching them from the beginning, and I predicted that it would be a problem for them to try to be a community museum, one that generates private support, when they’re inside a resort owned by someone who at that time was one of the world’s richest people. The other mistake was that they had two spaces when they opened, and the much larger one, which was about 60,000 square feet and dedicated to contemporary art, they opened with a motorcycle show. Motorcycles are naturalized here. Had they opened with Matthew Barney it might have been an entirely different reception. The real tragedy — it was almost like the gods were conspiring against art in Las Vegas — was 9/11. The Guggenheim could have made changes in strategy, but they got caught up in the problems that were exposed by the downturn after 9/11 in New York. They never recovered.

How did you decide what direction you wanted to take LVAM in?

When I arrived at LVAM in 2005, we did an all-day retreat. I presented the various types of museums and gave the board options on how they might want to proceed in terms of developing. Were we going to be a provincial community museum, one that shops on the Smithsonian Web site for exhibitions of Civil War photographs, or were we going to try to create a museum that would have some international stature? We chose the latter. We chose to become not a showcase museum, like many provincial museums, but what I call a “museum of record.”

Why was that the right decision?

Institutions must have international reputations to succeed for their communities. So you’ve got to build your collection. Why? Because you need leverage. Everybody in Las Vegas wants to have the Metropolitan Museum of Art here. Not possible. There are not the private collections here to be donated to such a museum, and great objects are priced beyond belief. There is no way to build a Met anywhere, anymore. And shows the Met does would never come to Las Vegas because the institutions here have nothing to lend in return. My advice to the board — and believe me, I presented options on equal footing — was that if they wanted a substantial museum, we had to focus on contemporary art. That was the only area in which we might actually be able to develop a significant enough collection to have the leverage we needed to engage in the big exhibitions. But that was 20 years away. We conceived of the museum as a beginning toward that end, and I had a very good, sound business strategy to do it.

Did you deaccession?

We deaccessioned a number of things when I first arrived. But none were important to the mission. Most were what I call “mall art” — things sold exclusively in mall galleries — and there was a very minor late 19th-century landscape (value around $10,000) that we sold. Many were returned to the donors. No significant contemporary works were ever sold. The problem for many provincial museums is that the focus of their collections is too broad; they tend to take a wide range of objects into the permanent collection. There’s a lot of deference to museum supporters in terms of accepting donations. Consequently, many provincial institutions are buckling under the weight of their collections, without achieving notable holdings or attaining any leverage within the museum community. This is why I cleaned up and strictly focused LVAM’s collection. I also refused many generous offers of gifts, which sometimes caused offense. But smaller museums must learn to plan properly or their collections will overwhelm them.

Going forward, what should other museum directors do in response to the economic crisis? Resign? Take pay cuts?

There are some great directors out there. They deserve the money they’re making. If they were lobbyists they would be making twice that. And lobbying is a big part of it, so to speak. When you find someone who is truly enlightened about art and has the expertise that is so necessary to be at the top, and someone who can also charm donors, that’s a combination worth paying for and should be rewarded.

Considering what’s happening with the economy, is it more important to get museum directors with business experience?

That was the trend in the ’90s; it didn’t really work out. You need someone whose vision is inspiring — so that you can hire the staff to help you manage the business. I don’t have a business background but I’ve learned how to read spreadsheets and understand big numbers. It’s easier to teach an art person business than it is to teach a business person art.

You were the first curator at the Bellaggio. Was Julia Roberts’s character in Oceans 11 based on you? The one who is a curator at a casino and is having an affair with the owner, but is swept off her feet by her old flame, played by George Clooney?

I was teaching at the University of Las Vegas when that movie came out. I went into class one day and there was a kind of giggle, and then somebody says, “Libby, Julia Roberts is playing you in this movie.” Students will say a lot of weird things but that one just seemed really odd. I went to see the movie and came back and said, “Here’s the deal. I did not sleep with Steve Wynn, but I would sleep with Andy Garcia. Also, that makes [my husband, art critic] Dave [Hickey] George Clooney. That’s great!”