The USGA bought the Russian Tea Room seven months ago for $16 million when the company that owned the site went bankrupt, director Rand Jerris said.
Since then, it has found extensive renovations would be necessary to turn the restaurant next to Carnegie Hall into a museum, Jerris said.
The USGA also is concerned about losing some control over the museum because of a New York law that gives oversight of museums to the state's Board of Regents, Jerris said. The golf museum will remain in Far Hills, N.J.
Jerris said the USGA is confident it can recover the purchase price.
The Tea Room was opened in 1926 by former members of the Russian Imperial Ballet. It later became a restaurant where musicians, performers and celebrities gathered. Despite $20 million in renovations, the Tea Room closed in July 2002.
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