The collection of the Detroit Institute of Arts has been rescued by a so-called “grand bargain” approved by bankruptcy court judge Steven W. Rhodes. The arrangement will allow the city to shed $7 billion of its nearly $15 billion debt and pour approximately $1.7 billion into city services such as new fire trucks and modern computer systems. As part of the deal reached by the city and its creditors, Detroit relinquishes ownership of the museum and its collection, turning them over to the nonprofit organization that currently runs the museum.
“Were obviously thrilled,” museum director Graham W.J. Beal told A.i.A. in a phone interview. “We’re now a freestanding institution like most of our peer institutions across the country. We look forward to continuing an aggressive campaign to build our endowment. I’ve been given completely contradictory information about the agreement, but in any case, whenever the legal briefs are filed and we can proceed, we will transfer ownership of the collection and the museum.”
Creditors had long argued that all city assets, including many works in the museum’s collection bought with public funds, should be on the table to sell as part of the settlement.
Varying assessments of the 128-year-old museum’s collection were put forward. The Detroit Free Press estimated the market value of 38 of the institute’s greatest works to be $2.5 billion. Paintings like a van Gogh’s self-portrait were valued at $100-$150 million. Bond insurer Financial Guaranty Insurance Company, meanwhile, commissioned a study from New York fine art appraiser Victor Weiner Associates, which found the collection to be worth as much as $8.5 billion. The city and the museum appraised the collection to be worth up to $4.6 billion.
As part of the grand bargain, the museum agreed to pony up $100 million that will go toward pensions for city workers. The museum’s operating endowment is about $119 million. Many foundations and individuals gave considerable amounts toward that total. Detroit’s big three automakers pledged $25 million toward the grand bargain in June; the Andrew W. Mellon Foundation and the J. Paul Getty Trust donated another $13 million between them.
