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Appraising the Appraisal: Christie’s Sickening Potential Shopping List of Detroit Institute’s Art

Nothing to celebrate: Pieter Bruegel the Elder, "The Wedding Dance," c. 1566, Detroit Institute of Arts

Highest valued work in Christie’s appraisal: Pieter Bruegel the Elder, “The Wedding Dance,” c. 1566, Detroit Institute of Arts

In what has now become, for me, the most stomach-turning moment in the Detroit Institute of Arts/municipal crisis saga, the Detroit Free Press today has posted an interactive feature (to which I refuse to link) that features images and the purported “fair market values” of 30 highlights from the 2,773 DIA works appraised by Christie’s at the behest of Detroit Emergency Manager Kevyn Orr.

As I commented to journalist Mark Stryker yesterday, for today’s Detroit Free Press article parsing the appraisal, “those who believe the art should be sold will see it [the itemized appraisal] as a shopping list, threatening the DIA’s collection and sending shivers through the entire museum world, where a bedrock principle is that art is held in the public trust and can’t be sold to defray an institution’s debts.”

Actually, I had defined that “bedrock principle” more expansively than what was quoted in the newspaper: The art, I said, “cannot be sold to defray even the institution’s own debts and operating costs, let alone the obligations of another entity,” such as a municipality. (At the above link, you can see more of what I told Mark about the artworld significance of the Christie’s list.)

If you want to risk upsetting your own stomach, you can now attempt to digest the entire 144-page document from Christie’s Appraisals, Inc.—Fair Market Value for Financial Planning—which is posted on the emergency manager’s website. The fine print on p. 4 gives some sense of how the auction house arrived at its valuations and, by inference, demonstrates the limitations of Christie’s approach:

In order to determine the appraised value, Christie’s appraisers used the “market data approach,” which compares the subject work to similar works and makes appropriate adjustments [such as?].

The lower number in the value range for each work we appraised represents a conservative price at which the property would change hands between a willing buyer and a willing seller in the relevant marketplace, and the higher number in the range represents the most advantageous price at which the property would change hands between a willing buyer and a willing seller in the relevant marketplace.

Christie’s has made no assumptions about the sale process, nor did we take into consideration any commissions, buyer’s premiums, or potential financial agreement between the buyer, seller and/or venue that would affect the final price realized. We have not assumed any volume discounts. [All emphasis is added].

In a previous CultureGrrl post, I discussed some of the shortcomings in Christie’s above-stated approach to determining the “price at which the property would change hands.” The appraisal is sure to spark a firestorm of controversy: Are the prices too high? Too low? Does it matter that this appraisal does not conform to the IRS definition of “fair market value”—“the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act [emphasis added] and both having reasonable knowledge of the relevant facts”?

In fact, there’s no way of knowing with any degree of accuracy what the art’s market value would be in this unprecedented context. Should the potentially price-depressing impact of dumping a large number of masterpieces on the market be weighed? Would the fact that this would be, in effect, a forced “fire sale” also depress prices? Could prices be depressed because these are “tainted goods”? Some dealers, museums and even collectors who might otherwise have bid on such works won’t touch them because they oppose such disposals on principle.

On the other hand, the illustrious museum provenance could provide value-added. It’s impossible to say how much weight to give to these conflicting factors. Christie’s, for good reason, doesn’t try.

We can only hope that any speculation about how much these works might bring on the open market is a mere academic exercise and that the cost of Christie’s problematic appraisal will prove to be a waste of scarce taxpayer dollars. The sell-the-art faction in Detroit should not prevail. If it does, as I suggested to Stryker, there may be dire implications for other museums whose art is owned, in part or in full, by financially struggling entities, whether municipalities or universities.

In other words, what happens in Detroit might not stay in Detroit.

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