As first reported on IN THE AIR, Art+Auction's gossip blog:

When the Whitney Museum of American Arts board of trustees meets next Tuesday to formally vote to approve its $680 million expansion into the Meatpacking District, IN THE AIR hears that a radical hush-hush new option will be on the table to mollify Leonard A. Lauder, the patron who gave the institution $131 million with the stipulation that it not sell its historic Marcel Breuer-designed home. To whit: the Whitney, which has long chafed under the cramped dimensions of its magnificent Brutalist building on 75th Street, would relocate entirely to its planned Renzo Piano satellite downtown — but instead of selling the flagship location, it would lease it to the august Metropolitan Museum of Art.

According to a well-connected source who heard about the secret talks from curators at both institutions, the trade-off would take place immediately after construction on the new Whitney location at the foot of the High Line — assuming it’s approved, as it is widely expected to be — is completed. (The museum, which so far has raised about 60 percent of the funds for the project, has until 2014 to break ground on the site.) According to another source who has been privy to the talks, the plan is hoped to get the Whitney out of a delicate bind. “They’ve come to the realization they can’t run two places, and they really want to build downtown,” said the source. “Leonard has given all this money but will withdraw it if they get rid of the Madison Avenue building. This is a way of keeping both buildings and benefiting from it.”

But while the plan may seem to hew to the obligations attached to Lauder’s 2008 gift, the largest in the museum’s history, it does so only to the letter rather than the spirit, since the patron’s intention was clearly to keep the museum uptown, not merely to own the building on paper. (Neither Lauder nor the Whitney responded to requests for comment.) Tensions have reportedly been mounting between the billionaire cosmetics magnate, who as chairman emeritus of the Whitney’s board has been dead-set against the new satellite, and curators at the museum who are strongly in favor of the project. Even so, no one disputes the fact that the Whitney has run out of space and the Breuer building is woefully inadequate for the current taste for large-scale works and installations. With its current footprint, it can only exhibit approximately 150 pieces of art at any given time, a minuscule percentage of its 18,000-work-strong collection.

And while Lauder’s iron-clad requirements for his munificent gift say that the Breuer building may not be sold, it is unclear how long the embargo may last. The landmark status of the Whitney building, however, precludes it from either being demolished at some future point or retrofitted as a luxury apartment condo. It must remain in its original guise as a museum. According to sources close to both museums, sensitive discussions are also underway between the Whitney and the Met about an eventual sale of the building to the encyclopedic Fifth Avenue institution.

While the lease arrangement is still far from decided, IN THE AIR hears that curators at the Met are already pitching shows that could be produced off-campus and jockeying to claim the prime galleries in the Breuer building.

The partnership would make sense for the Met because even its massive exhibition space is already severely limited, plus the museum has been trending in a more contemporary direction in recent years, as evidenced by shows like “Pictures Generation” in 2009 and the ambitious rooftop installations. (There’s no indication at the moment what kind of shows the Met would produce in the Breuer building, however.) The handover would also be a way for the Met to revisit a historic missed opportunity: in the 1930s the museum was offered a chance to take over another Whitney asset, museum founder Gertrude Vanderbilt Whitneys nascent collection, and turned it down. After Whitney’s death in 1942, her family reached out to the Met again in 1943, at the height of World War II, to offer the collection despite the fierce objections of the Whitney’s staff. This time the Met agreed, but the collection was never transferred and the Whitney recouped its priceless legacy in 1948, according to art historian Avis Bermans book Rebels on Eighth Street: Juliana Force and the Whitney Museum of American Art.