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Christie's says Detroit art worth up to $867M
Thursday - 12/19/2013, 2:04am EST
DETROIT (AP) -- Christie's auction house has completed its final report on the value of about 2,800 city-owned pieces in the Detroit Institute of Arts and has offered alternatives to a potential sale to satisfy creditors during the largest municipal bankruptcy in U.S. history.
The report was delivered Wednesday to Detroit emergency manager Kevyn Orr. New York-based Christie's said its fair market valuation of the artwork increased from a preliminary range of $452 million to $866 million to $454 million to $867 million.
Christie's five alternatives to selling the art include using it as collateral to secure loans or lines of credit and creating a partnership with another museum where the art would be leased out on a long-term basis. The auction house also said the city could establish a trust from which U.S. museums "rent" the city-owned art. Minority interests would be sold to individual museums, and revenue from the sale of these shares would be paid to Detroit.
The auction house didn't include in its preliminary report how much money could be raised if the city chose any of the alternatives.
"We trust that both aspects of our report will serve as a useful resource for the emergency manager as he continues to evaluate this element of the city's debt restructuring process," Doug Woodham, president of Christie's Americas, said in a release.
Orr's office had not yet made the final report public as of early Wednesday afternoon. His spokesman, Bill Nowling, said the emergency manager had to review it first.
Museum leaders said four of the alternatives outlined by Christie's already have been addressed by the museum.
"In most cases, these alternatives will yield a token amount of money, while placing the collection at substantial risk," the museum said in a statement.
It called the trust alternative "completely untested."
"With some exceptions, museums generally loan works of art free of charge except for packing and shipping fees," the institute said. "How a 'Masterpiece Trust' would be received in the museum community remains to be seen."
The Detroit Institute of Arts is considered one of the top art museums in the country. It holds artwork by Van Gogh, Monet, Renoir and other greats. Rodin's massive bronze sculpture The Thinker was gifted to the museum in 1922 and sits outside the building's main entrance.
Orr, appointed by Gov. Rick Snyder in March, has said city-owned art in the museum can be considered an asset and could be vulnerable during a bankruptcy. He filed for bankruptcy in July. Federal Judge Steven Rhodes approved the petition Dec. 3.
Detroit's debt is at least $18 billion, which includes $5.7 billion in unfunded retiree health care obligations and $3.5 billion in unfunded pension liabilities, according to Orr.
Retirees and pensioners worry that they will be forced to take huge cuts in benefits and pensions during the city's financial restructuring.
Detroit-area philanthropist A. Paul Schaap and his wife, Carol, have pledged $5 million to help offset expected losses by city pensioners in Orr's restructuring plan and help prevent the sale of the artwork. And the Community Foundation for Southeast Michigan has set up an online donation page to protect the art by raising money to support city pensions.
The foundation stepped up after U.S. District Judge Gerald Rosen, who is acting as chief mediator between Detroit and its creditors, asked foundations to raise $500 million to keep the artwork from being sold.
Orr is expected to present a plan of adjustment for fiscal restructuring to the court in early January that will include his recommendations for the art.
Orr hired Christie's this summer for $200,000 to appraise the artwork. Christie's said pieces bought by the city of Detroit represent about five percent of the museum's estimated 66,000-work collection.
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