The cash-strapped American Folk Art Museum is being bailed out by its neighbor, the Museum of Modern Art. The folk museum is in default on $31.9 million in bond debt it incurred to construct its new building on 53rd Street 10 years ago. MoMA will buy that building for an undisclosed price, allowing it to expand its exhibition space. The beleaguered Folk Art Museum will then pay off its debt. Its board voted in favor of the measure late on Tuesday.

The museum will continue its programming at a gallery space it has occupied near Lincoln Center since 1989. No closing date for the 53rd Street building has been announced. According to board president Laura Parsons, the museum will explore creating partnerships with cultural institutions and sending its collections on tour.

The Folk Art Museum's story is a cautionary tale in new museum construction.  The building, a dark, narrow angular structure designed by Tod Williams and Billie Tsien, always seemed incongruous for the institution it houses. Lower than expected attendance figures and an endowment that dwindled during the post-9/11 and 2008 economic crises battered the museum's finances.

The building is bordered by MoMA on one side and a vacant lot on the other. MoMA sold the lot to a developer in 2007 with the condition that the building it constructed would connect to MoMA and provide additional gallery space. Caught in the middle, and with an architectural style unlike MoMA's Yoshio Taniguchi 2004 redesign, the folk art building faces an uncertain fate.

In a letter posted on the Folk Art Museum's website, Parsons said: "We believe that responsible stewardship of our collection, prudent financial management, and outstanding service to the public are of paramount importance. After a lengthy and thorough review of our situation, consultation with professional advisors, and much soul-searching, the board has therefore decided to sell our building in order to eliminate the bond debt entirely and focus on these fundamental priorities."

She also told Bloomberg that several board members wore black as they voted on the measure. "We are in mourning," she said.

On May 6, the museum also turned over the ownership and management of the American Antiques Show to the Art Fair Company, which will change the name and rejigger the lineup. The opening night, in January, will remain a benefit for the museum. Last month, a show it organized for Venice was canceled by exhibition sponsor Benetton. Some observers speculated that had the museum been flush, the show would have proceeded.

Maria Ann Conelli, the museum's executive director, announced on May 3 that she would step down in July.

Photo courtesy American Folk Art Museum.