The imperiled Detroit Institute of Arts has taken a major step to protect its collection from the bankrupt city’s creditors. The museum has issued a statement acknowledging the potential for a federally mandated deal crafted by mediator Judge Gerald Rosen that would remove the institute from city ownership, transforming it into an independent nonprofit organization, as reported by the Detroit Free Press.
The deal under discussion would be made possible through the assistance of a group of national and local charitable foundations, the article reports, and would provide the city with $500 million to put toward retiree pensions for municipal employees. The fate of the DIA’s holdings and the threat of steep cuts to pensions that would affect 23,000 city retirees have been among the most contentious issues in Detroit’s ongoing fiscal crisis. A statement from the museum described the plan as tapping “national and local foundations among other funding sources to create a mechanism for providing cash for the city, while ensuring the present and future safety of the DIA collection.”
In the arrangement Rosen is lobbying for, the foundations would contribute to the city’s coffers in the name of the museum, thereby allowing the city to benefit financially from the value of artwork at the DIA without liquidating those assets. The foundations that have been approached include the New York-based Ford Foundation, the Troy-based Kresge Foundation and Detroit’s Hudson-Webber Foundation, according to the Detroit Free Press. The same article notes that the museum may also directly contribute funds.
Projected pension shortfalls in Detroit have been reported as ranging from $650 million to $3.5 billion. Appraisers from Christie’s, who began working with the museum in August, pegged the collection’s worth as being between $452 million and $866 million in a preliminary figure released last week.
If Rosen is able to finalize the proposed deal, it would become part of the restructuring plan put forth by the city’s emergency manager, Kevyn Orr, and would have to be approved by U.S. Bankruptcy Judge Steven Rhodes.