Once a cheerless industrial town known for swathes of blocky apartment buildings, Holon, Israel, seems an unlikely destination for cutting-edge design. But over the past few years, with the opening of the National Israeli Cartoon Museum and the Mediatheque, a youth theater, the city of 200,000 has made efforts to transform itself into a cultural center — now soon to be complete with a new museum designed by Israeli icon Ron Arad. This build-up is taking place at a time when other Israeli arts initiatives are also seeking to take advantage of the country's growing contemporary-art influence and the recent lulling of conflict in the region.

For the Design Museum Holon, Arad told London’s Independent, the town "wanted a building that could feature on a postage stamp.” Arad’s building, slated to open on the 4th of next month, is precisely that. The rust-colored steel structure self-consciously evokes Frank Gehrys Guggenheim in Bilbao, Spain, though, at $17 million, it cost only a fraction of what the Guggenheim did to erect.

The resemblance is no accident. Holon is one of dozens of second-tier cities, from Denver to Dallas, attempting to secure their own slice of the so-called “Bilbao effect.” The formula? Hire a name-brand architect to design an expensive, flashy building, then watch the crowds roll in. For already-established institutions, that pressure can be especially severe; as Maxwell Anderson, director of the Indianapolis Art Museum, recently admitted to the New York Times, the glut of new, outsized institutional architecture is due in part to the “keeping-up-with-the-Joneses quality to museum building.” Too often, though, as architects, critics, and urban planners have pointed out, these statement buildings cause financial hardship, don’t deliver on staggering promises of increased attendance, and fail to properly suit the needs of the institutions they are meant to house.

Perhaps partly as a result, James Snyder, director of Jerusalem’s Israel Museum, cheerfully describes his own institution’s $100 million renovation, slated to open July 26, as “the opposite” of Bilbao. Financially, that’s not entirely true; Bilbao cost the same amount to build. But the Israel Museum secured half its costs before announcing the project. In addition, and in spite of the recession, Snyder also has had success in his campaign to double the museum’s endowment to $150 million, raising $52.1 million thus far. That cushion will likely protect it from economic difficulties that have stemmed from other, similarly expensive institutional expansions — the Daniel Libeskind-designed new wing for the Denver Art Museum comes to mind — and that have delayed and canceled others, at the St. Louis Art Museum, Cincinnati Art Museum, and Buffalo’s Albright-Knox Gallery, among others.

The Israel Museum’s renovation, designed by New York–based James Carpenter and Israel’s Efrat-Kowalsky, reflects a fundamental respect for the 20-acre campus’s original structures, including the iconic Shrine of the Book, home to the Dead Sea Scrolls. Carpenter’s mandate, Snyder explains, “was to develop a signature that would be identifiable as his” while also resonating with the campus’s character. Renderings evoke the bright, airy atmosphere of such previous Carpenter projects as the lobby of 7 World Trade Center and the Time Warner building’s atrium, both in Manhattan. At the same time, the Israel Museum campus as a whole, meant to evoke an Arab village, doesn’t appear radically changed: Its square footage has doubled without enlarging its footprint. Wings devoted to the fine arts, Jewish art and life, and archaeology have also expanded; the space for temporary exhibitions, formerly relegated to the museum’s periphery, has been brought into the center; and the entrance hub and other areas having to do with crowd circulation have been improved.

“This is not the kind of place that you should ever tear down and start again,” says Snyder, a modern art specialist and former MoMA curator who assumed the museum’s directorship in 1996. To inaugurate its new galleries, the museum invited Israeli sculptor Zvi Goldstein and two installation artists — Susan Hiller, an American, and the Nigerian-born Yinka Shonibare — to curate shows of objects drawn from the permanent collection. Goldstein assembled some 600 objects that span human history, ranging from African masks to contemporary works by Donald Judd, and clustered them around poems from his book Room #205; Hiller, by contrast, selected just 35 contemporary pieces by artists from across the world. And Shonibare — who, Snyder points out with obvious pride, had his first mid-career survey at the Israel Museum — chose items relating to the theme of the four elements (earth, wind, fire, and water) around which to create four installations of his own.

The exhibition as a whole mirrors Snyder’s vision, which is “to heighten national awareness of the quality of what we have at home.” Given the recession, Snyder’s mission is not unusual. And local loyalty is especially important in a region where politics drives tourism (or the lack thereof). At the same time, he is committed to independence from the state, and likens the museum’s reliance on regular donors to that of an American nonprofit. (The Israeli government, which kicked in $15 million for the renovation, provides varying amounts of funds each year.) Perhaps partly as a result, Snyder can afford such expenditures as hosting traveling exhibitions of works by William Kentridge, and an exhibition, still some years off, of pieces by minimalist sculptor James Turrell. (Turrell’s Space That Sees is permanently installed at the museum, making it, says Snyder, a meaningful last-stop on the exhibition’s tour).

Discussing his vision, Snyder also highlights the museum’s “unique circumstances,” housing as it does an encyclopedic collection of objects that provide a narrative of both “the history of western material culture” and of the evolution of monotheism. The museum’s location — on a hilltop in one of the world’s most hotly contested cities — is another aspect to that distinctness, which makes museum-building here a more sensitive endeavor than elsewhere in the world. Israel Museum attendance, for example, which Snyder says would have hit 1 million in 2000, diminished to 300,000 in 2001 following the surge in violence of the Second Intifada. (Presently, attendance is about 500,000, says Snyder, an impressive figure given that 90 percent of the museum has been closed since the expansion’s 2007 groundbreaking.) Snyder won't pin down the visitor increase he expects to follow this summer's reopening, but a number of factors suggest it will be greeted with welcome bump: the country’s relative calm; Arad’s Design Museum Holon, which will focus additional attention on the region’s cultural offerings; the ascendance of contemporary Israeli art; the (mostly) positive press stemming from Israel’s humanitarian missions to Haiti; and, of course, the expansion itself. As Snyder himself puts it, “everything is connected.” He adds, “A year from now, we’ll talk.”