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The Knoedler Gallery, established in New York in 1846 by Michael Knoedler as a branch of the Paris-based Goupil & Company, is undergoing seismic changes. Its longtime director and president, Ann Freedman, has left, and its landmark five-story town house on East 70th Street is on the market for $59.5 million.

"We are in the initial stages of considering our options with respect to a new location, Chelsea being among them," says Michael Hammer, the owner and chairman of 8-31 Holdings, which controls Knoedler. Hammer is the grandson and sole heir of the late oil magnate Armand Hammer, who bought the gallery in 1971 from the Knoedler family. Asked if moving the operation was contingent on the sale of the East 70th Street building — which in January the Web site Cityfile ranked as the third-most expensive private property being offered in Manhattan — Hammer says, "A final determination has not yet been made."

He is also looking for long-term space for Hammer Galleries, which handles mostly 19th- and 20th-century American and European art and whose West 57th Street building was bought in 2008 by a real-estate consortium for more than $25 million and which has been renting from the purchasers since then. The plan had been for it to join Knoedler in the East 70th Street building, where it was to have occupied the fourth floor, but this fell through when the town house was put up for sale last December. Regardless of where the galleries end up, Michael Hammer insists the two firms "will continue to have different clients and focuses."

Freedman’s split with the gallery seems to have been considerably less voluntary than its announcement of her resignation implies. As she tells it, out of the blue late last October, Hammer put her on a 30-day leave of absence and immediately had her escorted out of the building by Harold Shaw, copresident and director of Hammer Galleries. "The way in which the door closed felt hard to me," says Freedman, who notes that she wasn’t even allowed to take a personal envelope off her desk. "I never imagined that I would be shown the door after 32 years." She resigned 10 days after her expulsion and was replaced as president by her associate Frank Del Deo.

Through a spokesperson, Michael Hammer would not discuss Freedman’s departure or any of Knoedler’s internal business.

Freedman began her art career in 1971 as a receptionist for the now-shuttered André Emmerich Gallery. Although she had recently received treatment for lung cancer, she objects to the impression some in the art world have that her departure was somehow health-related. As for her performance, "it wasn’t a question of business difficulties — business was positive. I was consistently networking and conducting business as always." Shortly after her resignation, she completed the sale on behalf of the gallery of a major Helen Frankenthaler painting for more than a million dollars to an American collector.

Since Freedman’s exit, Knoedler has suffered some defections from its stable of blue-chip postwar and contemporary artists. The sculptor Lee Bontecou, whose career enjoyed a major revival after two exhibitions at the gallery in 2004 and 2007, left, as did the Jules Olitski estate, which canceled a major show of the artist’s paintings from the 1960s and ’70s that had been scheduled for mid-November.

"We were about to launch an incredible exhibition of works, and [the gallery] really needed the person who knew the story behind them in place, and that would have been Ann," says Lauren Olitski Poster, who with her husband, Bradley Poster, and stepmother, Kristina Olitski, runs her father’s estate. She wrote a long letter expressing concern about the change in gallery leadership to Michael Hammer, who answered with a voice mail message stating that there were competent people in place "to handle your project." The family decided to break off the relationship. "My concerns were that whatever was going on inside the gallery was going to sidetrack everybody, and I didn’t want our show to get lost in that shuffle," explains Poster. The Olitski family has appointed Freedman as consultant to the estate, and Bontecou has also retained her as a consultant.

Not everyone is gloomy about the changes, however. The figurative painter Catherine Murphy, one of the artists who have chosen to stay with Knoedler, praises Del Deo’s stewardship. "I couldn’t be more pleased with his handling of my work," she says. "I fully anticipate that the new space will be just as beautiful as the present one."

Hammer, too, is optimistic about the gallery’s future. "[We] will continue to show and represent artists of the highest quality and significance — encompassing postwar 20th-century art to the present day," he says. And he points out that this is not the first turbulence the gallery has had to weather: "When my grandfather purchased Knoedler in 1971, [it] was in a state of transition and change."

"Hammer Swing" originally appeared in the March issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's March 2010 Table of Contents.