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Former Detroit Institute Director Sam Sachs Downplays Collection Threat (plus, details of museum’s contract with the city) UPDATED

Sachs

Samuel Sachs II, former director of Detroit Institute of Arts

In what may be wishful thinking, Samuel Sachs II, who directed the chronically beleaguered Detroit Institute of Arts from 1985 to 1997, believes that the threat to the museum’s collection posed by Detroit’s dire financial circumstances may be “a lot of smoke but no fire.”

In a phone conversation yesterday, Sachs gave me a tutorial on Detroit politics and recounted to me the historical background behind the current alarming situation: Although the city and state have withdrawn their financial support for the museum’s operations, they nevertheless continue to own its building and collections, at the artworks’ possible peril.

Sachs, who was succeeded by DIA’s current director, Graham Beal and then directed the Frick Collection in New York, suggested that politics may be behind the public assertions of the city’s emergency manager, Kevyn Orr (appointed by Gov. Rick Snyder), that “everything [including the museum’s art] is on the table” (in Sachs’ words) in deciding which assets may be monetized to help satisfy the financial obligations of a city teetering towards bankruptcy.

Government officials, Sachs asserted, “haven’t wanted to tell the full truth—that these union contracts [i.e., health and pension benefits for government workers] are something that Detroit can no longer afford….They stem from the heady good times.”

Sachs added:

The museum was founded privately and ran for many years that way. Then, I think in the ‘20s, they decided they had to charge 25ȼ admission, and the city took objection to that….The deal [for free admission] was that the city would take over the museum, own it, own its collection, and in return, the city would build a new building, which it did, and support the operations forever [emphasis added]. And the private sector would build the collections, buy art and do exhibitions.

It was a marriage made in heaven, as long as both parties had money. In the 1920s, Detroit was the richest, fastest growing city in America.

The wheels came off the bus in the ‘60s, and the city effectively went broke for the first time. At that point, the state passed a bill to support the museum….When I was a candidate for the [director’s] job [in 1984], the museum was receiving $16 million a year from the state….In one year, the state cut my budget by $8 million. That was the beginning of the end. [The museum no longer receives any support from the city or state, as confirmed to me this morning by its press spokesperson.]

Because of this reliance on what was a reasonable bargain, the museum…never built an endowment, because they didn’t have to. When the rubber met the road, [the loss of] $16 million dollars [in annual operating support] suddenly meant that they’d lost the equivalent of $350 million of endowment. You can’t raise that any time soon.

The DIA’s endowment was approximately $100 million as of last August, when voters passed a “millage” to help support its operations. It wants to raise that to $400 million.

If the city declares bankruptcy, it can abrogate contracts, including its 57-page 1997 Operating Agreement with the privately organized Founders Society of the DIA. The museum has retained high-powered legal counsel (Richard Levin of Cravath, Swaine & Moore) to help safeguard the collection, but has declined, through its spokesperson, to answer my questions about what legal strategies might be explored.

Below is an excerpt from the Operating Agreement stating that the city holds title to the works in the collection, except for those objects that have been given or bequeathed to the museum subject to the condition that ownership be held by the museum’s privately organized Founders Society:

DIAColl

As director Beal told Sherri Welch of Crain’s Detroit Business:

Ironically, our concern has been not to have [gifts] restricted, so the DIA would be able to deaccession that art to buy different art. We’ve always wanted gifts to be unrestricted. We [will now] have to start inviting donors to put restrictions on gifts.

And here are excerpts from the Operating Agreement stating that art sales proceeds can only be used to purchase other works for the collection (in accordance with widely accepted professional standards):

DIACollPrac1

DIACollPrac2

I hope Sachs is right, but I don’t share his guarded optimism that the city will leave DIA alone if Detroit does go bankrupt. Politics and shortsighted expediency may dictate that all the city’s stakeholders shoulder some of the burden, not just the government workers. Sell-offs may be part of the workout. We can only hope, in Sachs’ words, that “wiser heads will prevail.”

The benefits to the community from the tireless outreach efforts by Graham Beal and his staff, along with the outpouring of taxpayer support and goodwill for the museum that was evinced by the recent passage of the millage, may help to convince decisionmakers that monetizing the city’s cultural treasures “is not going to solve the problem,” in Sachs’ words. “It’s going to make Detroit a less attractive place and they’ve got to do everything they can to make it an attractive, viable, working city.”

Sachs added:

The car companies are certainly doing better now and this all goes well for Detroit. Urban pioneers are moving downtown. Lots of good things are happening. But it’s not going to happen overnight. Unfortunately, some of the bills have to be paid overnight….

Detroit’s already got enough problems. They need to protect the assets they’ve got.

Better yet, they need to stop classifying collections held in public trust as fungible assets. The museum’s masterpieces must be preserved for generations to come as the public’s patrimony—a crucial component in the hoped-for regeneration of this hard-pressed community.

UPDATE: Matt Helms and Kathleen Gray of the Detroit Free Press report that state legislation has now been introduced to prevent the sale of the DIA’s works in the event of bankruptcy, “although it’s not clear a state law would suffice in a federal bankruptcy court.”

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