After a pension committee last week demanded a more thorough review of the value of the Detroit Institute of Arts (DIA) collection, one of the city’s largest creditors has now lined up four investor groups willing to pay up to $2 billion for part of that collection.
The Wall Street Journal has the story, which explains that the bid process is being led by Financial Guaranty Insurance Co. (FGIC), a bond insurer that’s “estimated to be Detroit’s single largest unsecured creditor, back[ing] about $1.5 billion in city debt.” Steve Spencer, a financial adviser to FGIC, told the Journal, “We have received indications of interest in acquiring or monetizing all or a portion of the DIA collection from four credible third parties.” Those third parties are Catalyst Acquisition Group/Marc Bell Capital Partners, Art Capital Group, Yuan Management Hong Kong, and Poly International Auction.
FGIC’s argument is that because Christie’s evaluation of the DIA art only covered a small portion of the collection — artworks purchased in whole or in part with city funds, which constitute less than 5% of the museum’s holdings — the resulting sum (~$454–867 million) was deceptively low. Creditors and pensioners contend that the collection is worth much more, as seemingly evidenced by the $1–2 billion FGIC now claims it could secure. But artworks often come into museums with conditions and strings attached, and the groups hounding the DIA seem to be turning a blind eye toward the legal processes that would inevitably hold up any attempted sale. (Brandeis University’s 2009 attempt to close the Rose Art Museum and sell off its collection resulted in multiple lawsuits.)
The “grand bargain” organized and proposed by federal judge Gerald Rosen to protect the DIA artworks from sale and raise money for Detroit’s pensioners and creditors currently stands to offer the city $816 million. Detroit Emergency Manager Kevyn Orr, seemingly changing his tone from earlier discussions, told the Journal, “If anyone wants to force a sale, we’re going to lose that money.”
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