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The Detroit Institute of Arts, one of America’s leading art museums, could be forced to sell parts of its world-famous collection in order to help balance the City of Detroit’s books.
The DIA boasts a truly encyclopedic collection that includes everything from ancient Egyptian mummies to cutting-edge contemporary art. It owns such renowned pieces as Vincent van Gogh’s “Self-Portrait with Straw Hat,” Henry Fuseli’s “The Nightmare,” and Pieter Brueghel the Elder’s “The Wedding Dance.” All told, the collection’s value is probably in the billions of dollars. According to reports in the Detroit Free Press, the value of just 38 of its greatest treasures would be in the neighborhood of $2.5 billion.
Unfortunately for the DIA, the museum building and the collection are technically owned by the city. This arrangement dates from 1919, when the museum was forced to become part of the city in exchange for a bailout. Detroit no longer funds the DIA, but a 1998 agreement between the city and the museum provides for the city’s continued ownership of the building and the collection.
This makes the DIA a tempting target for Detroit’s creditors. To say that the city is in dire straits would be something of an understatement. The Motor City owes its creditors around $18.5 billion, including $6 billion in healthcare and life-insurance costs and $3.5 billion in pension costs.
Meanwhile, the city itself is crumbling. Forty percent of streetlights do not work, and there are an estimated 78,000 abandoned buildings in the city (not surprisingly, there are also around 12,000 fires each year). Residents are fleeing the city (in 1990, Detroit was a city of over a million people; now, it only has 700,000), and those that remain often have to contend with crippling poverty. The unemployment rate is currently 16 percent, and with a per capita income of $15,261 per year, tax revenues have dwindled to a trickle.
When the prospect of selling off the collection first emerged in May, the museum was quick to protest. “The DIA strongly believes that the museum and the City hold the museum’s art collection in trust for the public,” it said in a statement.
“The DIA manages and cares for that collection according to exacting standards required by the public trust, our profession and the Operating Agreement with the City. According to those standards, the City cannot sell art to generate funds for any purpose other than to enhance the collection,” it continued.
Michigan’s Attorney General, Bill Schuette, agreed. “The art collection of the Detroit Institute of Arts is held by the City of Detroit in charitable trust for the people of Michigan, and no piece in the collection may thus be sold, conveyed, or transferred to satisfy city debts or obligations,” he said in a statement backed up by a 22-page advisory opinion.
Still, the future of the DIA’s collection is uncertain. The Attorney General’s opinion is not binding, and the operating agreement with the city will likely be set aside by the bankruptcy court. From a legal standpoint, it might be difficult to convince the judge that the DIA’s collection should not be treated as a city asset. Although neither the judge nor the creditors can force Detroit to liquidate its assets, they pressure the city to do so in order to meet its obligations.
Creditors clamoring for a fire sale of artwork might want to think twice, however. The DIA is one of the city’s most popular tourist attractions. Selling off its masterpieces would generate an enormous backlash and could prove detrimental to the city’s fortunes in the long run if it stripped the museum of its iconic status.
Photo Courtesy of Maia C