By Joseph Lichterman
DETROIT Dec 4 The auction house Christie's put
a price tag on one of Detroit's highest-profile assets - the
city's share of the Detroit Institute of Arts collection - but
the masterworks might not be worth enough to help the city out
of its financial crisis.
Christie's said on Wednesday that nearly 3,000 works
controlled by the city are worth between $452 million and $866
million. The appraisal surprised some experts who thought the
works, which include masterpieces by van Gogh and Matisse, might
be worth more.
The finding by Christie's, hired to place a value on art
treasures that have become a point of heated debate over the
past few months in the city and its suburbs, could become a
contested element of the Detroit bankruptcy if the city tries to
"monetize" its masterpieces. The report puts a range of value on
2,781 works owned or partially owned by the city.
Christie's also proposed five alternatives to an outright
sale of the art, including using the collection as collateral
for a loan to the city.
The holdings represent only about 5 percent of the total
number of art pieces in DIA's collection. But Christie's, which
sought to appraise the most valuable pieces in the city-owned
collection, stated that 11 of those pieces account for 75
percent of the total value of all appraised pieces.
With the finding Tuesday that Detroit is bankrupt under
Chapter 9 of the federal bankruptcy code, it is possible the
city may seek to monetize some of the artwork. With debts
totaling $18.5 billion, Detroit may need to sell all or part of
the DIA collection as part of its plan to emerge from
But the relatively low price range Christie's assigned to
the collection could make the art a less vital asset than some
observers had expected, said Michael Bennett, a law professor at
Northeastern University and a bankruptcy expert who has written
about the plight of the DIA.
"If Christie's is saying that we'd be looking at something
less than $1 billion, and perhaps something significantly less
than $1 billion, in proceeds from a sale, clearly that's not
even a drop in the bucket if you bear in mind the magnitude of
the financial deficit of the city," Bennett said.
Christie's report did not specify the works that were
appraised, but some of the most best-known works owned by the
city include an 1887 self-portrait by Vincent van Gogh and Henri
Matisse's "The Window," an oil painting of a turqouise-shaded
Another highlight: a rare 1566 painting, "The Wedding
Dance," by Flemish painter Pieter Bruegel the Elder, that
depicts a joyous wedding party.
In its report to the city, Christie's proposed five
potential approaches to monetize the collection without having
to sell it. Options including use of city-owned works as
collateral; long-term leases; and sales to philanthropists who
might loan pieces back to the city could be used in combination
to raise funds for the cash-strapped city, the auction house
"The current robust global art market coupled with the fact
that the city-owned collection contains some high-quality and
valuable works, suggest this could be an effective financing
arrangement," Christie's America President Doug Woodham said
about the proposed use of the collection as collateral for a
line of credit.
The city could raise money from a traveling exhibition of
select DIA pieces and might create a "masterpiece trust,"
selling shares in city-owned works to other museums, Christie's
The DIA declined to comment on the appraisal but said in a
statement that it "continues to maintain its position that the
museum collection is a cultural resource, not a municipal
asset." The museum also said that if the collection were
threatened, it would be "committed to taking appropriate action
to preserve this cultural birthright for future generations.
Bill Nowling, a spokesman for Emergency Manager Kevyn Orr,
did not immediately respond to a request for comment.
With Wednesday's report, Christie's has completed two of
three phases of appraisal assigned to it when Orr retained the
auction house in August: valuing 319 city-owned works on view in
the museum's galleries, then appraising pieces in storage
estimated to be worth more than $50,000.
The third phase involves lesser works in storage and should
be completed later this month.
Christie's sought to appraise the DIA art at fair market
value, the price at which a piece would be sold in an
The market for fine art has sizzled this year. Francis
Bacon's "Three Studies of Lucian Freud" fetched a
record-breaking $142 million in a Christie's sale last month.
The Nov. 13 auction in New York brought in $691 million, the
highest in art market history, and prompted talk of a bubble.
'DELAYS THE INEVITABLE'
Detroit's options for the DIA could be limited by resistance
from surrounding suburbs. In 2012, voters in Detroit and the
three suburban counties voted to increase property taxes to help
cover the DIA's operating expenses, and suburban officials have
threatened to quit sending tax proceeds, which provide about
two-thirds of the museum's budget of about $35 million, if DIA
art is sold.
But Orr has maintained that the city must value all of the
city's assets, including the art. He also has said the city is
looking at other assets to monetize, including the Detroit Water
and Sewerage Department, Coleman A. Young International Airport
or other city-owned parking lots or land.
U.S. Bankruptcy Judge Steven Rhodes in his ruling Tuesday
warned that asset sales will not provide a solution to Detroit's
long-term financial problems.
"A one-time infusion of cash, whether from an asset sale or
borrowing, delays the inevitable," he said.
A group of the city's largest creditors last month asked
Rhodes to approve an independent valuation of the DIA's
collection. Also last month, a federal judge acting as chief
mediator in the bankruptcy case put forward a proposal that a
group of non-profit foundations could create a fund to protect
the DIA's city-owned art.