Thursday, January 30, 2014

The Perils of the Detroit Institute of Arts and a Little Bit of History

You would have to have lived in a cave if you weren't aware, at least to some degree, of the perils of the Detroit Institute of Arts (DIA) .To briefly summarize, the City of Detroit, in debt to the tune of $18 billion, last December formally declared bankruptcy. Not long thereafter, reports emerged that  the city's creditors, the largest of which are those who are owed pensions, were looking to sale of the DIA art collection to help relieve the debt. William Schambra in The Chronicle of Philanthropy writes that the collection is "the most valuable remaining disposable asset" of the city.

Christie's, the prominent art auction house, was commissioned by the city's Emergency Manager to appraise the fair market value of the collection, particularly  the works purchased by the City of Detroit. The response was a range from $452 million to $866 million. Some then weighed in that was too conservative.

Then the cavalry - in the form of 10 major foundations (Kresge, Ford, W.K. Kellogg, etc.) - rode in, apparently, to the rescue. They have pledged $370  million, with the major beneficiaries being the City, retirees and employees  and the DIA. But there are conditions. The State of Michigan has to match it. The Governor recently pledged $350 million, pending legislative approval. The DIA has to itself provide $100 million for the City pension fund - each  over a period of years.  Another condition is that the DIA become a nonprofit organization and not an agency of city government. The matching conditions especially represent a high hurdle. Presumably all this, assuming it can come to fruition, would protect the DIA collections from the auction block.

Certainly the prospect of a selling off the art is a very distressing one. Major works would be removed from public view, as most museums cannot compete in the hot auction market. The Institute would be gutted, representing, as some have said, an attack on the soul of the city itself. Ironically,  if it weren't for the emotional public response to the possibility of losing the DIA collections, the foundations might  have lost one rationale for their unprecedented use of private funds to help bail out a city. These  foundations do however have longstanding relationships with Detroit.

Why has this situation come to pass, aside from the economic reasons for the bankruptcy? One could understand how the creditors would be attracted to the DIA collection, with the frequent reports of astronomical  prices for art being fetched at auction. The other reason is more basic - the DIA is owned by the city, thus vulnerable, and here is where the history lesson come in.

When the American Museum of Natural History and the Metropolitan Museum of Art were founded, before any hole was dug or even much material collected, an agreement was reached with the City of New York whereby the trustees would own and acquire the collections, and the City be responsible for the real estate and its maintenance. The years were 1869 and 1870 respectively, and the author of this arrangement was one of the museums' founders, the lawyer, and later Ambassador to Great Britain, Joseph H. Choate,  a great grandfather of mine. I have been researching his life and career. 

In a 1917 memorial to Choate, the Natural History Museum's president Henry Fairfield Osborn described a "wise union of public and private endeavors…Choate worked an  entirely new conception, namely, provision for the  independent and untrammeled  management of the museum by the most intelligent men of the City combined with its establishment as a public institution, to be  built and partly maintained by public taxation, and to be endowed and enriched with specimens brought together through private gifts and donations.” 

The DIA was established in 1885. It is of course a pity its founders didn't follow the New York City model. If it had, its collections would not be at risk today. Let us hope the complex arrangements to satisfy Detroit's creditors will work out. The goal is to keep the art in Detroit, but more broadly to lessen the possibility that city-owned museums' collections elsewhere will be similarly exposed, should their owners face bankruptcy.  Perhaps the stewards of such collections should take heed and build their firewalls now. Forewarned is forearmed.