Gaga over Rio Guggy.

New York's Guggenheim Foundation and the city of Rio de Janeiro are embarking on an ambitious and highly controversial U$$170 million project to build a Guggenheim museum on the Maua Pier in Guanabara Bay.

Rio will provide the site, the building and the money, including an estimated $32 million for the rights to the Guggenheim name. The New York-based museum, along with Russia's State Hermitage and Austria's Kunsthistorisches Museums, will provide expertise in development and curatorial matters. French architect Jean Nouvel has been tapped to design the world's sixth Guggenheim, joining New York, Berlin, Barcelona, Venice and Las Vegas. "Nouvel's building is a work of architectural brilliance," Guggenheim Director Thomas Krens said upon announcing the project at the end of April.

Critics have pummeled the plans, starting with the non-Brazilian architect. Nouvel's design, which calls for the museum to be partially submerged in the Atlantic Ocean, has been likened to a sinking ship. And, of course, the budget--four times the annual outlay of Brazil's Culture Ministry--is considered outrageous. To boot, the Guggenheim canceled its own plans for a $950 million, Frank Gehry-designed museum in Manhattan last December.

Rio Mayor Cesar Maia remains undeterred. The city's massive, $618 million surplus, he argues, can easily support the project, which he says will promote development in the city's historic center when completed, in 2007.