Mon September 30, 2013
Esteemed Art Collection Appraised For Bankrupt Detroit
Originally published on Mon September 30, 2013 3:28 pm
Detroit is leaving no stone unturned as it works to climb out of bankruptcy. And that includes considering selling some of the city’s esteemed art collection.
But what will the city do once the art is priced?
From Here & Now Contributors Network, Kate Wells of Michigan Radio reports.
MEGHNA CHAKRABARTI, HOST:
This is HERE AND NOW. When President Obama was in Detroit last week, he offered $300 million in federal aid to the bankrupt city. The money would be used for housing, transportation infrastructure, amping the police force up and improving city management systems. That's just one of many sources the city's emergency manager Kevin Orr is looking to to help solve the city's financial crisis.
Another possible source: the art collection at the Detroit Institute of Arts. Right now appraisers from Christie's Auction House are sifting through some 3,500 pieces. They're putting a price on individual artwork and the collection as a whole, and that's fueling the rumor mill. From the HERE AND NOW contributors network, Kate Wells of Michigan Radio has our story.
KATE WELLS, BYLINE: Here's the plan: We are going to break down three rumors about the Detroit Institute of Arts, or if you're local you call it the DIA. But first we have to assume that Detroit's emergency manager, Kevin Orr, actually does put the art on the bargaining table, which is a big leap, but that's what it would take for us to end up here.
UNIDENTIFIED MAN: Forty-four is bid, 45 in the room, 46.
WELLS: This is a swanky auction house like Sotheby's New York. There are men in tuxedos. There are paddles flying. There are bids reaching $120 million. That's how much Edvard Munch's "The Scream" sold for last year. And there are pieces in the DIA that could almost make that look like chump change, which leads us right into DIA rumor number one, public museums, the rumor goes, do not have a chance at this art because private collectors are the only ones with this kind of cash. That rumor is probably true.
ABIGAIL ESMAN: The prices for art are way beyond what museums can afford.
WELLS: This is Abigail Esman. She's written about the art market for Forbes, and she consults for collectors, and she says these days museums are just priced out because art is a really hot investment.
ESMAN: The economic crash in 2008 barely touched the art market, which isn't to say that the market didn't suffer, but it rebounded really fast.
WELLS: So what that means is that now we've got Wall Street and hedge fund guys putting massive amounts of money, sometimes their own money, into art, which brings us to DIA rumor number two: The museum's masterpieces will be lost to the public so some rich guy can hang it in his rec room. Again Abigail Esman.
ESMAN: That's the likelihood, but it's not necessarily their rec room, their living room, their ballroom, their summer home.
WELLS: So that would be the worst-case scenario, right, that some rich guy buys Pieter Bruegel the Elder's "Wedding Dance," and it's for an obscene amount of money, so he stashes it where the public cannot see it. But there is another way that this could go down. It's called the altruistic investor.
MARION MANEKER: The very people who are buying art today, not all of them but many of them, will in future generations be looked upon as, you know, founders of great museum collections.
WELLS: This is Marion Maneker. He is the publisher of Art Market Monitor. And he says something that of course we all know, that art collectors lend their stuff to museums all the time. Heck, sometimes they even build museums just to house their collections.
And then there is a third option, and coincidentally it's also DIA rumor number three: The city, the rumor says, can keep the art and still make money out of it. If you live in Detroit, you've been hearing a little bit about this because in all their press releases about this, Christie's and Detroit's emergency manager Kevin Orr talk about realizing value without relinquishing ownership. Translation: put those Monets up for collateral, baby. Again, Marion Maneker.
MANEKER: The banking world has started to acknowledge or use art as a piece of collateral, and that may be the one sort of missing element we don't understand in what could happen.
WELLS: The Levin Art Group is reportedly valuing the Detroit Institute of Arts' entire collection at $10, maybe even $20 billion. And securing a loan of that size is a long shot, says Abigail Esman.
ESMAN: Twenty billion dollars, no. Two billion dollars, you know, you'd have to talk to probably a couple of banks. And they would have to be willing to lend Detroit the money.
WELLS: And that is a big if. For HERE AND NOW, I'm Kate Wells in Detroit, Michigan. Transcript provided by NPR, Copyright NPR.