Mayor Brandon Scott directed the city to cancel its contract with the Baltimore Office of Promotion & The Arts on Wednesday after weeks of back-and-forth between City Hall and the financially embattled nonprofit.

“We are taking this step after deep and careful consideration following several years of turmoil within the organization,” Scott said in a statement about the contract cancellation. “Ending this contract will be an intricate process that will require cooperation between both BOPA leadership and staff and the city, which will be done through the transition team established at today’s board meeting.”

The mayor also said he hopes the nonprofit will work to refocus itself on its core mission of serving local artists. Baltimore had worked a clause into BOPA’s contract allowing it to cancel the deal if services weren’t met. Marvin James, Scott’s chief of staff, wrote in a letter to BOPA CEO Rachel Graham and Board Chair Andrew Chaveas Wednesday that the nonprofits “persistent financial difficulties” led the city to cancel the contract in order to “ensure the long-term sustainability” of Baltimore’s arts programming.

Chaveas revealed to the board in a September email that BOPA would not be able to pay “fundamental expenses” without help from City Hall. For years, Chaveas wrote, the arts council shifted money from reserves to cover expenses and “reflect a balanced book” without replenishing itself. At an emergency board meeting on Sep. 19, the board was expected to vote whether to lay off staff or move out of its downtown offices; instead, the board declined to take either option. The board declined again at a Sep. 30 meeting.

A spokesperson for BOPA did not immediately return a request for comment Wednesday evening.

Past skirmishes between the arts group and the mayor’s office resulted in the resignation of its last CEO, Donna Drew Sawyer, a shake-up of its board and a “payment plan” in which the city doled out its annual allotment in quarterly installments.

Now stripped of its core programming, BOPA will lose its quasi-governmental agency status, turning it into a private nonprofit that will have to raise funds independently of City Hall; it receives most of its $4.7 million budget from the city. Outside fundraising has been difficult since the pandemic, which also forced the cancellation of major events like Artscape. A review of BOPA’s tax filings shows its financial position has weakened every year since the coronavirus shut down live events. At the end of the 2019 fiscal year, the arts group had $5.8 million in net assets. At the end of fiscal year 2023, it had just $1 million in assets. Millions that were meant to be spent on the signature event Artscape were unable to be recouped, according to the tax filings.

Earlier Wednesday, BOPA’s board voted to lay off staff as a means to stem some of its losses, the first concrete steps it had taken to reduce expenses since it was revealed last month the nonprofit was in financial free fall.

Graham declined to say after the meeting how many or which staff were being laid off; there are 22 employees listed on the BOPA website. The layoffs are expected to save $35,000 a month once they take effect, Graham said, far less than the hundreds of thousands of dollars the arts council’s accountants projected the organization would lose throughout the end of the year. The next board meeting is in December.

Graham said Wednesday morning the arts council is still planning to put on a fireworks display for New Year’s Eve and organize a Martin Luther King Jr. Day parade. Scott’s office will ask the city spending board on Nov. 6 to formally terminate the contract, with the last day the agreement is active set to be Jan. 20, the same day as the MLK parade. Scott’s office controls a majority of seats on the Board of Estimates, making the cancellation vote a formality.

Board members also voted to create a “transition task force” to “reevaluate” the nonprofit’s contractual relationship with City Hall. With Scott saying Wednesday evening he is terminating the city’s relationship; the task force will work to form an off-ramp for BOPA’s programming to come under city control.

Last week, The Baltimore Banner reported on the contents of a confidential 2023 memo from a senior Scott administration official that laid out a possible roadmap for the city to take control of BOPA’s signature events, including Artscape, the Baltimore Book Festival and Light City. A spokesperson for Scott’s office described the memo as deliberative and said to draw inferences from it about the administration’s future plans would be “purely speculative.”

But now it appears that memo may not have been so speculative. In his letter Wednesday, James said the city will work with BOPA over the next several weeks to smoothly transition programming and planning of future events, like next year’s Artscape, to city control. Some employees, it’s not clear how many, will be offered employment with the city. The memo called for the city to contract with other groups, like Visit Baltimore or Live Baltimore, to put on BOPA’s core events.

The memo also lays out how BOPA-managed properties — the Bromo Seltzer Arts Tower, The Cloisters Castle in Timonium and the Baltimore Farmers’ Market — would be spun off. It’s unclear if that strategy will be followed or a different one will be adopted going forward.

After the depths of its financial despair was revealed last month, BOPA asked Scott’s office for a $1.8 million bailout. In turn, Scott asked the nonprofit to open its books for an independent forensic audit to uncover where its money went. It’s unclear if the audit, which is meant to weed out possible mismanagement or fraud, will be needed after Wednesday’s cancellation.

Weeks after the bailout request Graham upped the drama when she suggested in an interview with The Banner that it was actually Scott’s administration to blame for BOPA’s financial struggles, not the arts council.

Graham said a $1.5 million state grant for Artscape that was sent to the city was actually meant for BOPA and is reflected as expected revenue in its 2023 books. The grant is almost the same amount of money Graham sought in her bailout request.

The mayor’s office and state Sen. Antonio Hayes, who secured the grant, said it was a restricted grant that was always meant for the city to spend. In a statement, the mayor’s office threatened to end the relationship with BOPA, saying they were either unable or unwilling to get its facts straight.