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Woodward Entrance to the Detroit Institute of Arts (DIA). Image courtesy of DIA.

Bankruptcy would endanger Detroit’s cultural gems

Woodward Entrance to the Detroit Institute of Arts (DIA). Image courtesy of DIA.
Woodward Entrance to the Detroit Institute of Arts (DIA). Image courtesy of DIA.
DETROIT (AP) — When Johnathan Shearrod gazes at Van Gogh’s “Self Portrait,” Bruegel the Elder’s “Wedding Dance” or any of the other treasures at the Detroit Institute of Arts, he can’t help but fear for their future.

If Detroit falls into bankruptcy, those masterpieces and other prized artworks could go on the auction block to help satisfy the city’s staggering debts. Though the auctions would raise much-needed cash, they would also strip the city of its cultural riches, including paintings by Rivera, Renoir and Matisse, and maybe even zoo animals and historic automobiles.

“The art here is just as important as any of the structures connected to the auto industry,” said Shearrod, a grant manager for a local nonprofit, during a recent visit to the museum. “The DIA is the spirit of Detroit.”

Other institutions owned by the city and potentially at risk include a black-culture museum, the historic Fort Wayne dating to the 1840s and the 985-acre Belle Isle park, which will probably be leased to the state. Just north of the city is the Detroit Zoo.

Another source of potential auction pieces is the Detroit Historical Museum’s collection of about 60 vehicles, including an 1870 Phaeton Carriage car, a 1911 Ford Model T and John Dodge’s 1919 coupe.

Shearrod said the DIA collection shouldn’t be considered as an option.

“Bidding the stuff off is completely ridiculous,” he said. “There are better ways of dealing with Detroit’s debt” than selling off an art collection piece by irreplaceable piece.

But emergency manager Kevyn Orr, a bankruptcy expert hired by the state in March to steer Detroit away from insolvency, has made it clear that everything of value owned by the city could be up for grabs. A decision on whether to file for bankruptcy could come within weeks.

In a letter to DIA officials, Orr gave notice that there are no sacred cows, even if bankruptcy means cutting the city’s soul to save it.

Others aren’t so sure. The DIA doesn’t believe the artwork can be sold to satisfy city debt and has an attorney looking into the issue. Michigan’s attorney general has weighed in, too, releasing a formal opinion that the artwork is held by Detroit in charitable trust “for the people of Michigan.” The state Senate passed a bill requiring the DIA to stick to a national code of museum ethics, which bars the sale of art to satisfy needs other than enhancing an institution’s collection.

Orr spokesman Bill Nowling said there is no intention to put a value on, or to sell, anything in the city-owned collection.

“We were just giving them a heads-up,” Nowling said. “We believe there is some exposure risk to the collection if we go into a bankruptcy — that creditors could ask us to put some value on it.”

Some donated pieces have stipulations that prohibit them from being sold or transferred. However, others were bought decades ago with city money, said museum spokeswoman Pamela Marcil.

Orr presented a plan earlier this month to creditors, asking some to take only 10 cents on the dollar on the debt the city owes. Others are being asked to take less. By July 1, Detroit’s budget deficit could reach $380 million. Orr has said long-term debt could surpass $17 billion.

If he doesn’t get the concessions he seeks, Orr could move Detroit into a Chapter 9 bankruptcy. That would make it the largest U.S. city to do so.

Should the city enter bankruptcy, everything, including the potential sale of artwork, “is probably on the table,” said Ben Feder, a bankruptcy attorney with New York-based Kelley Drye & Warren.

But “it would be the choice of the city to go that route. Without the consent of the city of Detroit, probably nothing” could be sold, Feder said.

Selling or privatizing other Detroit assets, like its electric and water departments, makes more sense because they would bring in a steady flow of revenue, he added.

The sale of a painting brings in a one-time sum. The museum won’t put a price on any painting, but it’s easy to imagine the work of famous artists fetching tens of millions of dollars.

Van Gogh’s “Portrait du Dr. Gachet” sold for more than $80 million at auction in 1990. A Henri Matisse bronze nude sold three years ago for more than $48 million.

But what Detroit needs most is revenue to supplement its shrinking tax base caused by people and business fleeing the city. In the 1950s, Detroit had 1.8 million people. Its current population barely tops 700,000.

Zoo board members have discussed the potential impact on the zoo.

“The city essentially owns all of the assets other than vehicles,” zoo Director Ron Kagan said. “Unlike the DIA, our works of art — the animals — really have no commercial value. I don’t think we view this as an imminent threat.”

The zoo, the DIA and Detroit’s other cultural gems have more value intact, Nowling said.

“When you’re talking about lowering a $15 billion debt load, there is not a big market for giraffes,” he said. “We need to come up with a plan to protect as much of our assets as possible because we need a viable city going forward.”

The DIA is in the city’s resurgent Midtown district and draws about 500,000 visitors a year. Van Gogh’s “Self Portrait” was the first piece from the acclaimed artist acquired by an American museum, Marcil said.

The city later bought “Wedding Dance” and “Gladioli” by Monet.

Less ethical art collectors might be interested if DIA pieces were made available, but legitimate collectors would be appalled at the reason behind the sale, said Charles Guerin, director of the Hyde Collection in Glen Falls, N.Y.

Some pieces were meant to be enjoyed by the public and “not meant to pay off debt,” he said.

Public opposition has sunk similar plans to sell cherished art collections.

Brandeis University near Boston announced plans in 2009 to close its Rose Art Museum and sell $350 million in artwork in response to a budget crisis. But museum supporters filed a lawsuit, and the idea was dropped.

“The donors to the rest of the school raised holy hell with them,” said James K. Ballinger, director of the privately owned Phoenix Art Museum in Arizona. “They realized it was a much larger issue than the sale of art objects.”

“You’ve got to be unbelievably diligent here,” he said. “If you look at the DIA collections, certainly those things given to the DIA would have been given to the community, so to speak.”

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Woodward Entrance to the Detroit Institute of Arts (DIA). Image courtesy of DIA.
Woodward Entrance to the Detroit Institute of Arts (DIA). Image courtesy of DIA.