UI considers suing over FEMA funds for museum

IOWA CITY -- University of Iowa officials are considering all options available, including litigation, to make sure they're leaving no stone unturned to pursue federal government funding to replace the flood-damaged Museum of Art, which preliminary estimates show could cost $75 million.

The Federal Emergency Management Agency ruled flood damage to the Museum of Art did not meet the necessary level to qualify for replacement funding, and the federal FEMA office recently denied the second UI appeal of that ruling. The first UI appeal was denied in January 2011 by the regional FEMA office.

After a flood recovery update to the state Board of Regents Wednesday, UI Senior Vice President for Finance and Operations Doug True said litigation is one potential avenue for the UI in the course of pursuing federal government funding for the museum replacement.

"We've reached no conclusions. It may be a month or two before we decide what we're going to do," True said. "We're looking at, with the state (Homeland Security office), any possible way in which we can ultimately prevail in this."

True said after the meeting he didn't want to talk specifics about what UI officials may or may not do, but he said officials want to make sure "there's no other corner of this we haven't thought about."

A new preliminary estimate shows it could cost $75 million to replace the Museum of Art, and that's money the UI doesn't have, True said. Officials are "nowhere close to attacking this in terms of its real cost," True said, but the new $75 million figure is based on looking at other new museums built in the past five years and costs per square foot. The replacement cost is expected to be in that range, True said, likely more than $60 million and hopefully less than $80 million.

UI officials want FEMA's help to replace the Museum of Art at a new location, away from the Iowa River, because university officials say no insurance company will insure the art in that location. The 12,000-piece collection, insured for $500 million, was evacuated from the museum in the days leading up to the June 2008 flood. The collection is now being displayed and stored in other locations.

True also told the regents Wednesday the university has added another appeal over FEMA funding to its list, with a plan to appeal about $400,000 in disputed FEMA funding that is part of the $8.8 million in expenses to turn a former Menard's store into the temporary home for UI's Studio Arts programs. It's the fifth flood-related appeal on a UI project to FEMA, and True expects more will join the list as recovery continues.