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Christie’s Makes It Official; DIA Responds

The City of Detroit has hired Christie’s to value, and presumably sell, part of the collection of the Detroit Institute of Art. It posted this statement on its website earlier today:

We confirm that Christie’s Appraisals Inc. was asked and has entered into an agreement to appraise a portion of the City owned collection at the Detroit Institute of Art.  In addition we will also assist and advise on how to realize value for the City while leaving the art in the City’s ownership.

Appraisal of organizations and individual collections is a regular part of our normal business and Christie’s was asked to assist due to our expertise in this area across all fine art categories and eras.  We understand that a valuation of all the City’s assets (extending well beyond the art) is one of many steps that will be necessary for the legal system to reach a conclusion about the best long term solution for the citizens of Detroit.

At Christie’s, we are passionate about art and understand the importance of the contribution that institutions such as the Detroit Institute of Arts offer to the community and the world at large.  We are proud of our long history of support to museums, including the DIA.  We want to continue to focus our efforts on being a positive force in both the interests of the City of Detroit and its arts community, including working with our fellow arts professionals at the DIA and with the City to find alternatives to selling that would still provide the City with needed revenue.

The last paragraph was meant to calm critics (like me), I suppose. It doesn’t.

Here’s the statement issued in response by the DIA:

The Detroit Institute of Arts (DIA) has learned that Christie’s, at the request of the Emergency Manager, plans to proceed with a valuation of the DIA collection, and we will be cooperating completely in that process. However, we continue to believe there is no reason to value the collection as the Attorney General has made clear that the art is held in charitable trust and cannot be sold as part of a bankruptcy proceeding. We applaud the EM’s focus on rebuilding the City, but would point out that he undercuts that core goal by jeopardizing Detroit’s most important cultural institution.

In addition, recent moves in Oakland and Macomb counties to invalidate the tri-county millage if art is sold virtually ensure that any forced sale of art would precipitate the rapid demise of the DIA. Removing $23 million in annual operating funds – nearly 75% of the museum’s operating budget – and violating the trust of donors and supporters would cripple the museum, putting an additional financial burden on our already struggling city. The DIA has long been doing business without City of Detroit operating support; any move that compromises its financial stability will endanger the museum and further challenge the City’s future.

Last week, Reuters had a excellent wrap-up article describing the situation and explaining what might happen if the art is sold.

Comments

  1. Well, my curiosity is piqued–what “other alternatives” to selling would be possible? Selling pieces to private parties, perhaps including Detroit corporations with long-term or in perpetuity leases of paintings to DIA? How does one make money for the city without a sale? Unless you change the definition of selling.

    With regard to Christie’s, if they feel compelled to take the business, why not donate their services, including if it comes to it, commissions on sales?

    The threat of the millage repeal is a powerful one. God for Oakland and Macomb counties. I hope private donors to DIA are taking a similar hardline regarding any sales.

    Small, desperate minds are behind this gloomy scenario. Selling the city’s cultural assets might bring short-term relief to some but spells long-term doom to the City of Detroit.

  2. Art finance innovators have offered effective alternatives to outright sales for years now, but arts professionals and journalists ridiculed those alternatives instead of exploring their full potential and fine-tuning any rough spots. If Detroit’s bankruptcy leads to the DIA’s liquidation, it won’t be for a lack of alternatives. It will be for the arts profession’s lack of diligence in searching for alternatives.

    Arts professionals have hung their hat on a “public trust” argument that never involved filing any actual trust documents. Even when an arts institution — the Barnes Foundation — had actual trust documents, moneyed interests swept that trust away in cy pres proceedings, and did so despite James Maroney’s friend-of-the-court brief explaining how artworks in that collection could replenish the endowment without permanently leaving the collection. The DIA Corporation rests the integrity of Detroit’s DIA collection on a very thin reed.

    Now that saving the DIA collection may take art finance innovation as an alternative to artwork sales, Kevyn Orr’s call for artwork covenants — “forming some covenants in ways that would monetize the value of the asset there but keep the art here in Detroit” — may be exactly what keeps the collection together and funds its future and the future of arts in Detroit. Arts professionals ought to explore just what artwork covenants are and what they can do and arts journalists ought to report on that exploration, rather than continue treating Orr’s call as beyond the pale.

    • Joe Donovan says:

      The closest you come to explaining how coaccession works in semblance to possession and investment demand is here:

      http://chicagoartmagazine.com/2010/02/mobilizing-coaccessiontm/

      “The museum owns the bulk of the artwork’s cultural value by owning all rights to it — including exhibition, research and conservation — except the right of possession, which it sells separately. The collector owns the bulk of the artwork’s financial value by owning that right of possession that the museum sells. The collector possesses the artwork when the museum does not actively exercise any of its cultural rights — when the artwork would just be in storage anyway.”

      Unfortunately, all of the artwork you cite at the DIA as an example of the untapped riches the City of Detroit holds doesn’t going into “storage anway;” they are part of the permanent collection. The permanent-permanent collection.

      The Wedding Dance, The Dreams of Men, The Visitation, etc. only come off the wall for conservation efforts (and in rarer cases, loans to other museums). The museum is constantly exercising their cultural value on every piece of art you cite. How would your plan overcome this terminal flaw?

      • Judith often leaves my comments and replies unposted, Joe, so sorry, the answers to your earlier points are still pending moderation. If and when Judith sees fit to post them, I’ll address your latest… although I’m surprised you missed the very obvious answer in the writings about Coaccession. Well, then again, maybe your not catching it was intentional. Judith tends to post attacks on Coaccession and me, then censor my responses.

        • That is not true, Mark. When your comments are too long or do not comply with the policy forbidding advertising, I do not post them — and I usually send you an email explaining why. To say otherwise is a distortion of the truth.

          BTW, I have published TWENTY of your comments.

        • Joe Donovan says:

          Mr. White, I don’t know you or Ms. Dobrzynski, but she seems fair, posting several messages from others contrary to her own opinion. After all, it is her blog, and she may moderate as she pleases.

          If your Coaccession blog allowed comments, I would have posted there. I am sure there is an obvious answer as to why you do not allow comments on your blog.

          As for the obvious answer out of your plan flaw, no I honestly do not see how you can sell possession of artwork as discussed above short of creating new lend/lease structures. I say this with all due respect: your plan lacks concrete steps, and the arguments you put forth are smoke and mirrors.

          It’s very easy to write short posts that comply with the forum’s rules. Make a claim, provide a warrant, then impact the claim.

  3. Joe Donovan says:

    Are there any peer-reviewed studies on the question of artwork covenants? With all due respect to the call of your third paragraph, Mr. White, what you put forth is more assertive than persuasive. What can we anticipate the market demand will be like for such an investment?

    The Maroney brief you cite proposes a sort of “shared custody” of artwork allowing the investor to take possession of the artwork for a period of time (outside of the museum) based on the purchasing stake. You claim the artwork would stay in Detroit; how would you model function? What drives demand in possession of title, rather than possession of piece? How does that value appreciate?

    Acting as a test-case is not what the museum needs. The DIA successfully secured a millage supporting its operations for the next ten years, thereby affording it the opportunity to focus its solicitation efforts solely on building an operating endowment that gives it true financial security. How covenants would affect that millage remains to be seen, but there is only a risk covenants disrupt the millage agreement and throw the museum back into fiscal crisis.

    Moreover, there is the perceptual argument; you might not think the public trust argument is a very good one, but I am willing to bet anyone who has ever donated a work of art or a single penny to the museum believes the argument. Start playing fast and loose with works of art in the public trust (and I don’t have to win there is a public trust -de jure- or not, this is a perceptual linkage), and you scare off many donors. In such a world, without the millage or ready donors, the museum’s days are numbered, and that would be such an unbelievable shame for this city.

  4. Anna Spiro says:

    My argument (never tested in the courts) is that because the museum relies on donations of property and funds that are tax-privileged as charitable donation, its holdings must be considered the property of all of the tax-paying citizens or the USA and should not be sold because of the bad financial behaviours undertaken by or on the behalf of the city. To me it is a question as to what exactly museum should be allowed to sell. Perhaps, excess art should be offered to small museums throughout the USA for exhibition in local communities before it goes on the block? (Art supposed is sold only for the purpose of using those funds for the purchase of other works of art, rather than for maintenance of the institution.)

    The sale of the holdings from the NYHistorical Society was successfully halted once standing had been established by Artwatch International led by the late Professor James Beck with the support of several other professionals. But to avoid an actual lawsuit, the person in whose name the halt of the distribution of the goods after the sale had been enacted, was advised to give up the pursuit of the issue. Several decent paintings did stay in NYC — given the conditions under which the sale was conducted; however, one of my favorite itmes a Renaissance birth salver showing a birth scene on the front and the urinating infant on the back with the inscription “I am the infant that pees gold and silver…” after being on display at the Metropolitan Museum for a few more years was sold by the private who had bought it for four times what s/he had paid (1.2 million — not a bad investment esp. when the infamous market had gone far south during that period!)

    Perhaps, it is time to reinstate the 10% luxury tax that existed in the 1950s and use those fund to establish small museums throughout the USA?

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