In Detroit bankruptcy, what will happen to DIA?

Good afternoon. Long time lurker, first time poster here.

I've been reading a bit about the budget woes and staff cuts the Detroit Institute of Arts has been dealing with lately. There's a question that's really bothering me. I understand the museum is owned by the City of Detroit. I think it's wonderful that the people of Detroit own such a jewel. However, if Detroit files bankruptcy, as it appears it will sooner or later, what will happen to the DIA? I have nightmares of them auctioning off the Rembrandts and Van Goghs to pay Detroit's bills. The DIA is an absolutely irreplaceable resource.

Does anyone know how a Detroit bankruptcy would affect the DIA?

I get dibs on the Mackintosh Argyle chair!

Welcome, Rosa. I'm sure the DIA is funded through other sources. Otherwise, it would have closed or liquidated a long time ago.

I'm sure you're right, LodgeDodger. However, I'm thinking of how personal bankruptcies are usually carried out. For instance, if I file Chapter 7, I have to provide the court with a list of all my assets. Any assets in excess of the state exemptions are eligible to be seized by my creditors. If Detroit filed BK, would the DIA artworks be assets that could be sold off or seized, or are city bankruptcies handled differently?

And I'll have that nice medieval chapel with the gorgeous stained glass that's near the Kresge Court. It would make a nice add-on to the homestead here in Hamtown.

There must be some types of protection in place for municipal assets while in receivership. Cleveland didn't lose their art institute or zoo when they entered receivership.

I predict that 20 years from now, DetroitYESers will be debating whether the long-abandoned DIA should be turned back into an art museum or converted into a mass transit station or a backdrop for movies and outdoor concerts.

Welcome to the Forum, Rosa. I hope you continue to participate here.

In order to answer the question, I think we would need to know what Detroit "owning" the DIA means, if Detroit owns it at all. Does Detroit own the DIA's building? Does Detroit own any of the works of art? Is the DIA owned technically by an entity that is not the city of Detroit? Those are just some of the questions.

In order to try to find more information about the DIA, I consulted the DIA's 2008 Annual Report. [[The 2009 report has not been posted yet).

In the section of Note A of the financial statements entitled, "Art Objects and Collection," it states:

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In conformity with allowable museum practice, the value of the Art Collection is excluded from Statements of Financial Position. Title to art objects purchased by or donated to the DIA is offered to the City of Detroit Arts Department and title transferred when accession to the permanent collection has been approved by the Board of Directors of the DIA and the Arts Commission of the City of Detroit...Sales of works of art are subject to a policy that requires proceeds from their sales to be used to acquire other items from the collection.

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So the city does hold title to the artwork in the museum.

Note C, "Relationship with the City and State of Michigan" provides a clearer answer to the ownership question:

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Effective February 1, 1998, the DIA entered into an operating agreement with the City to administer, manage, and fundraise for the museum with the mission to promote and maintain the excellence of the museum. The City continues to own the museum's permanent art collection, including works of art acquired prior to or subsequent to the operating agreement, as well as the building museum and grounds. The operating agreement expires June 30, 2018.

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The note also indicates that the DIA manages the museum without compensation.

So the city does own the DIA and its artwork. I am not sure how that would play out in bankruptcy. The museum does not state the value of its artwork in the financial statements, so I do not know what the estimated value of it is, though I would imagine it is in the hundreds of millions. If I can find any more information about bankruptcy and how it would play out, I will post it here.

As a side note, in the financial information section of the annual report, we can get a window into the sources of the museum's revenues. The information below is for the fiscal year that ended June 30, 2008.

That year, the DIA had just under $45 million in revenues, and $42.2 million in expenses. Of the $45 million in revenues, $23.6 million came from private donations. $7.6 million came from membership and development, and $6.5 million came from programs and operational activities. Just over $1 million came from government appropriatons [[most of which was probably state funding). About $2.9 million came from Board appropriations, but I am not sure where these revenues ultimately originated from. At the least, this shows that the museum relies very little on public funding for its operations, but it relies very heavily on its endowment and donations. That source has undoubtedly taken a big hit since the 2007-2008 fiscal year, especially with the accelerating downturn of many Michigan companies.

While the museum's revenue was greater than its expenditures, the museum nonetheless had a deficit of $1.2 million because of other changes in net assets, such as capital expenditures. The museum's net [[total) deficit was $9.89 million. The DIA did have positive cash flow, however, and at that point, had $8.3 million on hand in cash and short-term investments.

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Originally Posted by Retroit

I predict that 20 years from now, DetroitYESers will be debating whether the long-abandoned DIA should be turned back into an art museum or converted into a mass transit station or a backdrop for movies and outdoor concerts.

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You never know, but the city has just finished spending over $55 million to renovate the DIA, so I do not see the building being abandoned any time soon.

Cman, that's not really an exact picture of the situation. Many of the works in the DIA are on loan or were purchased by non-DIA entities. The City owns the property and some of the collection, but not all.

According to the 2003-2004 Detroit Budget Analysis, quoted in the DIA wikipedia article:

"The Detroit Institute of Arts [[DIA) is the second largest municipally-owned museum in the United States and contains an encyclopedic art collection worth over one billion dollars."

http://www.ci.detroit.mi.us/legislative/CouncilDivisions/FiscalAnalysis/doc/AGDailies/Arts03-04.doc

It's interesting to hear that about Cleveland. Is their museum municipally owned as well?

Lilpup, I did think that many of the works of art are probably donated, and that is a good point. I am not certain how much of the art the city owns, though I will poke around and see if I can find anything. Still, I think the value of whatever the city does own could be in the hundreds of millions.

I think the museum most at risk would be the Wright. It's heavily dependent on the city for operational financing.

I don't know how the Science Center is doing - [[if it's technically city owned? - not sure of that)

Without digging out my notes from class, I believe that if the city goes into bankruptcy, the DIA would not be affected too bad. I remember something about that the city now has oversight on the place, but essentially the DIA runs as a separate entity from the city. I can't remember if it is the DIA, or the DHM that has the city board positions unfilled for sometime now [[at least they were back two years ago).

I also think that the city cannot make the DIA deaccession and sell items from its collection in order to cover city debets. Thanks goodness because, considering the moronic actions of the Detroit government, I'm sure that many items would have been liquidated over the years to pay for MonCon's transportation and lunches. I think that was changed fairly recently. Everyone has to remember that when Engler changed funding for the Arts in Michigan, repositories like the DIA became more stand-alone than before.

I've seen some posters on this site that are affiliated with eh DIA, or at least know a heck of a lot of what's going on in there, so hopefully they will chime in [[or I can get board and dig through my material) and provide more accurate information


PS -- Never go to Wikipedia for any factual information. It's a junk site that is not even a creditable research tool for high school work and is largely considered drek.

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Originally Posted by Baselinepunk

PS -- Never go to Wikipedia for any factual information. It's a junk site that is not even a creditable research tool for high school work and is largely considered drek.

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I appreciate the tip, but I just found the link to the Detroit budget report there. The quote comes from the actual budget report.

Thanks for the info. Given the state the city's been in for years, it seems a minor miracle that the DIA is doing as well as it is.

Rosa, you did the right thing when working with 'pedia. Most people don't bother to look at the links to the citations. And, I should pardon myself a little; I've been beaten over the head recently regarding avocation of the validity of 'pedia [[yes, sadly even from some university professors) that I get a little grumpy when I see it used as a source. I see absolutely no use, other than recreational, for that site. I wish it would slide quietly into the ether.

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Originally Posted by Baselinepunk

Rosa, you did the right thing when working with 'pedia. Most people don't bother to look at the links to the citations. And, I should pardon myself a little; I've been beaten over the head recently regarding avocation of the validity of 'pedia [[yes, sadly even from some university professors) that I get a little grumpy when I see it used as a source. I see absolutely no use, other than recreational, for that site. I wish it would slide quietly into the ether.

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No worries. You're absolutely right about that site. Its only worth is as a quick source of links to other sites about a subject. Your experience with the professors makes me glad it's been a long time since I was in college.

I do hope everyone is right about the DIA being safe. I had scary visions of the Riviera Court being moved to Bill Gates' pad in Patagonia.

Thankfully, the amount of professors I have encountered have bunked that site; however, a recent encounter with a real piece of work has caused me to harden my stance regarding that dump of a site even more. Not for public review, but you would be extremely surprised at what University school they "instruct" at.

I don't there is anything to worry about. Further, in response to the above claim from another poster regarding the amount of money the City of Detroit spent on the recent upgrades at the DIA, I am fairly certain that the money spent on renovations is above the amount stated, and came from the DIA's own Capital Campaign they spent years fund raising for. I believe that a very low amount of city fiduciary resources were used on that project.

I just bid for the museum on E-bay. I can't wait to see my futon and salvation army dinette set up in the rivera court!

The taxes and heating bill are going to bury you!

I believe the Founder's Soicety has control over operations at the musuem, a role they accepted in recent years. I believe the city owns the building and land, and the collections are largely endowments which are not technically owned by the city, since they can't be sold unless voted upon by a majority of the Founder's Society board. At least that's my recollection.

Sigh......... I just measured it... and Frederick Church's massive landscape masterpiece "Cotopaxi" won't fit into my living room! :[[

Lorax, according to the 2008 Annual Report I linked to above, the city definitely owns the building and land. The DIA and city have an agreement by which the city "operates" the museum, and the DIA "manages" it. It could be that the collections have a special status even though the city has title to the art owned by the museum, as you mentioned, but I have not been able to find anything to that effect.

I am still not sure how bankruptcy would affect the whole situation [[and receivership would be far more likely than bankruptcy), but I am hoping to get a chance to do some research this week. If so, I will post any information I learn here.

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Originally Posted by cman710

Lorax, according to the 2008 Annual Report I linked to above, the city definitely owns the building and land. The DIA and city have an agreement by which the city "operates" the museum, and the DIA "manages" it. It could be that the collections have a special status even though the city has title to the art owned by the museum, as you mentioned, but I have not been able to find anything to that effect.

I am still not sure how bankruptcy would affect the whole situation [[and receivership would be far more likely than bankruptcy), but I am hoping to get a chance to do some research this week. If so, I will post any information I learn here.

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Please do.

A three county property tax was proposed to save the DIA, just like the Zoo and the SMART bus system. Do you think this should have passed?

This vote failed but was close and many people would like to see this on the ballot again.

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Originally Posted by Trainman

A three county property tax was proposed to save the DIA, just like the Zoo and the SMART bus system. Do you think this should have passed?

This vote failed but was close and many people would like to see this on the ballot again.

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Really a great idea- it's a good step toward regionalizing the bigger assets of the region. This is the key, I belive in Detroit ever resembling a liveable city again. Here's a list of what needs to be regionalized, blending the governments of the tri-county area into a single entity:

Police
Fire
Libraries
Museums
Parks
Auditoriums
Transportation
Tax collection
Permitting
Development/planning
Hospitals
Schools

Did I leave anything out?

YES! regionalize the DIA. It's the only way to save the Detroit's arts and humanities.

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Originally Posted by Lorax

Did I leave anything out?

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Wealth and intelligence?

Since Detroit owns the art collection at DIA, it's one of the wealthier cities in the USA. All that financial value is off the books -- that's how museums keep their books, with FASB 116 blessing -- but we're not talking the hundreds of millions of dollars cman710 mentioned. The number is way, way up in the billions -- enough to generate cash income on an endowment that would fully fund Detroit's arts and culture budget and essential services to boot. If Detroit mobilizes that value, the structural deficit goes away and there's no need for any bankruptcy.

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Originally Posted by Retroit

Wealth and intelligence?

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Common sense is another.

"The number is way, way up in the billions -- enough to generate cash income on an endowment that would fully fund Detroit's arts and culture budget and essential services to boot. If Detroit mobilizes that value, the structural deficit goes away and there's no need for any bankruptcy."

Huh? Are you trying to say that if the city sold off the art, it could avoid bankruptcy? If the artwork is sold off, what's the point of having the museum or an endowment to fund it?

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Originally Posted by Lorax

Did I leave anything out?

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Water. It's already happening - a consortium of Macomb and Oakland counties took over control of the OMI after it was found to be in *extreme* disrepair [[it had already collapsed at 15 mile)

I think the main arteries and processing plants should be regionally owned and managed, with cities taking care of the "last mile" infrastructure.

Huh? Are you trying to say that if the city sold off the art, it could avoid bankruptcy? If the artwork is sold off, what's the point of having the museum or an endowment to fund it?

Novine, you wouldn't have to sell off the art. There are other ways to mobilize its financial value, and at least one would let Detroit fund an endowment with the artworks' market value without moving exhibits an inch. Like gold in a vault, investors will want their artworks in a museum.

On the other hand, if the City goes bankrupt, who's going to protect the museum and its art?

So, both of your posts so far have to do with selling off or mobilizing it value. Please expound on this.

Islandman, if you knew me, you'd know how dangerous it is to invite me to expound. You should visit my blog -- linked on my profile -- and Google Coaccession. If you still want me to expound after that, well, I might slip my self-restraints.

Having looked at the blog, it's not a bad idea, but with a few flaws. First, insurance for works is problematic. Who pays? Better yet, who provides security? Also, what is the criterion for someone to have a work of art in one's home, office or school? Background checks?

I previously worked at the DIA. The building and some of the collection is owned by the city. The collection is managed by the Founders Society, which also owns some of collection. Many pieces were donated with restrictions as to what can happen to them. The museum does not make a practice of selling pieces in its collection [[with some exceptions), because it is a member of the American Museum Association. If the city were to go into bankruptcy or receivership, I am pretty certain that the museum would be spun off entirely to the founder's soceity and no one else; the founder's soceity is almost entirely funded by sources outside of the city.

Well, it is an interesting idea.... but....

Alex Manoogian is one of the nations top art collectors. As head of the DIA Founders Society, and owner of a large number of important artwork in the DIA, as well as in the Masco Corp. HQ in Taylor, Mr. Manoogian would be an expert on the subject of Capital Appreciation. Wonder what his take on this idea is?

So the concept here involves wealthy people being able to write off the Capital Appreciation on their taxes... of artwork that they don't really own, but have in their temporary possession... not exactly a popular notion in this day and age. Less taxes for the rich... higher federal deficit. Hmmmm....

On a different note, Richard Manoogian back in the 1980s bought George Caleb Bingham's THE JOLLY FLATBOATMEN, an iconic 19th century American painting that one art critic called "one of the dozen most important American paintings of all time". This painting [[on long term loan to the National Gallery in Washington), was sold privately to Manoogian for [[at that time record for a USA painting) $6 million, with the stipulation that it was to remain at the National Gallery for a set number of years. The painting went on tour last year for the bicentennial of Bingham's birth [[1811)... and I see a comment on a website that mentions it's in the Manoogian Collection... Taylor MI.

So has the famous painting finally left the National Gallery and come home to Michigan??

If they put in an EFM, the snyder and his troglodyte minions would clamor for the Great Art Sell-off

1953, DIA's annual report states and cman710 quotes: The City continues to own the museum's permanent art collection, including works of art acquired prior to or subsequent to the operating agreement, as well as the building museum and grounds. Do you know how much of the City's collection is impermanent? Or restricted? Has the City let the Founders Society accept restricted donations on its behalf, or was this all pre-1919? Others have also said that the City doesn't own all the works at the DIA, but the DIA's annual report seems pretty clear about the City owning every object of the 60,000+ in the permanent collection. If the Van Goghs are going to suddenly go in a van, I expect Detroit residents will want to know all about it beforehand. Is the annual report hiding anything else besides the market value of the art collection that belongs to the residents of Detroit?

Write-offs for the rich? Uh, Gistok, you actually pay taxes on realized capital appreciation, at least if you're a private individual. Not, of course, if you're a non-profit museum. Once individuals start realizing capital appreciation on museum artworks, those taxes will go up. That will be offset when museums start getting capital income on investments funded by their artworks instead of individuals getting [[and paying taxes on) those interest and dividends, but then, museums having more money for more hours, more guides, more exhibits, more catalogs, more programs, more curators, more research, more conservators, more outreach, more arts education, etc., etc. is a good thing, right? With artworks and archives and science specimens generously funding the arts and humanities and sciences, governments and foundations and individual donors can turn to other priorities.

townonenorth, you mention some difficult issues I've wrestled with. My various legal, financial and arts advisors agree that my practical solutions resolve them quite well. I'm hoping Detroit will want to apply my tools to maximize both the cultural returns and financial returns that the City's art collections and other collections can sustain, and not just because that will give me some agreeable work to do. It's because I'm pretty sure that the other solutions floating around out there are not nearly as good as mine. I'll have to tell Detroit my specific solutions if the City uses me, but I don't want to share them publicly yet. Thanks, though, for the praise on my basic idea. The realization that traditional collection management practices like the DIA's leave vast resources in capital appreciation completely idle has compelled me, at significant personal sacrifice, to develop these tools as fully as I can without much institutional support. It will be a great reward to see them create significant new value on top of the value that Detroit already gets from its collections.

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Originally Posted by rb336

If they put in an EFM, the snyder and his troglodyte minions would clamor for the Great Art Sell-off

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All the more reason, rb336, to intelligently, even ingeniously, mobilize the DIA's vast financial value before the City runs too low on cash. EFM? Bankruptcy? Detroit? Don't you know Detroit is one of America's richest cities? Why, Detroit supports the arts, humanities and sciences better than anywhere else in the world because they REALLY KNOW what great investments they are!

i hope the DIA gets to stay open, gets more funding [[from whoever), marketed as a regional and state asset, and a destination for outstate/out-of-state visitors..

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Originally Posted by Trainman

A three county property tax was proposed to save the DIA, just like the Zoo and the SMART bus system. Do you think this should have passed?

This vote failed but was close and many people would like to see this on the ballot again.

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Like how they sandwiched SMART in between the zoo and the DIA.

Thr DIA got some money from other private folks! They will stay open for a while. In the meantime the Detroit Science Center will remain closed for a long time.

Well! who needs science when we can see more Andy Warhol to Picasso's crayola pop art.

I cannot give you a number regarding how much of the 60,000 piece collection is owned by the city and how much is controlled differently, but I know that, for some time, the museum has been accessioning works differently than it did in years past - I believe this protects a great deal of the recent acquisitions from receivership, though many of the most storied pieces would not be covered by this. Arguably, the city could balance its books against the value of that museum. However, this would be entirely unprecedented in the nation's history and, perhaps, in the history of art.

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Originally Posted by 1953

I cannot give you a number regarding how much of the 60,000 piece collection is owned by the city and how much is controlled differently, but I know that, for some time, the museum has been accessioning works differently than it did in years past - I believe this protects a great deal of the recent acquisitions from receivership, though many of the most storied pieces would not be covered by this. Arguably, the city could balance its books against the value of that museum. However, this would be entirely unprecedented in the nation's history and, perhaps, in the history of art.

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You're absolutely right. The city of Detroit would become [[even more of) an international pariah.

I had heard on a different DYES thread that the DIA sold off the donated furniture from the Rose Terrace [[Dodge) drawing room [[18th century French)... is that right?

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Originally Posted by 1953

...I know that, for some time, the museum has been accessioning works differently than it did in years past - I believe this protects a great deal of the recent acquisitions from receivership...

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You'd think, 1953, that the DIA's annual report wouldn't still say that accessions belong to the City, then.

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Originally Posted by 1953

Arguably, the city could balance its books against the value of that museum. However, this would be entirely unprecedented in the nation's history and, perhaps, in the history of art.

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Well, not that many cities own art museums, and of those that do, not many are having to juggle payroll with vendors to avoid bouncing checks. Detroit is likely unique in having so much art and so little cash. Of course, other cities subsidize art museums they don't own. If Detroit sets a precedent showing how wealthy art museums can pay their own way and offer tremendous outreach as well -- a couple hours of arts instruction available every day in every one of Detroit's classrooms, for starters, so we don't lose the potential of any budding geniuses -- that might do some real good for the city, the nation and the history of art. As long as the Van Goghs don't go in a van, having your Monet and money too should help cities with art museums.

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Originally Posted by English

You're absolutely right [1953]. The city of Detroit would become [[even more of) an international pariah {[[by) balanc[[ing) its books against the value of that museum}.

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Better Detroit should go bankrupt first, English, and take its chances with its creditors' tender mercies? It can avoid that risk by letting its cultural property do double duty, adding new financial benefits to existing cultural benefits. By using those financial benefits to support the arts, sciences and humanities -- does reopening the Detroit Science Center appeal to you? -- the city would then reinvest in the [[now highly visible) sources of its wealth. Far from being an international pariah, Detroit would be an international hero for setting such a very valuable precedent.

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Originally Posted by truthseeker

The Chinese are waiting in the wings.....

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More than you know, truthseeker, unless you are quite well informed

I believe it would be a misguided decision to leverage [[mobilize is the terminology used by coaccession) the assets of the DIA to address the issues facing the city. There are structural deficits in the delivery of essential city services, departments and government. It is not only a monetary issue. Do we leverage DIA assets to bail out a broken system? If we place the assets of the DIA on the table to resolve our financial issues I believe that the contributions to this great museum will significantly decrease.

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Originally Posted by daisy

I believe it would be a misguided decision to leverage [[mobilize is the terminology used by Coaccession) the assets of the DIA to address the issues facing the city.

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"Mobilize" captures, or at least tries to, Daisy, the idea that while existing policies and practices leave these assets financially idle while culturally active, new policies and practices could make them active both financially and culturally. "Leverage" has a specific technical meaning in finance, and using leverage increases risks, so I naturally shy away from that word in this context. Coaccession, at least, need not imply any leverage, but certainly will mobilize.

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Originally Posted by daisy

There are structural deficits in the delivery of essential city services, departments and government. It is not only a monetary issue. Do we leverage DIA assets to bail out a broken system?

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Detroit's ownership of the DIA art collection gives it, at least when combined with a new management tool like Coaccession, the rare financial privilege of generating at least tens of millions of dollars, more likely hundreds of millions, perhaps even billions of dollars in interest and dividend earnings on money that the City could save in an arts endowment funded by its art collection. Last year the Mei Moses World All Arts Index rose about 10%; without Coaccession or any other new tools, Detroit's art collection generated billions of dollars of capital appreciation that didn't pay any bills for anybody. Do we leave those assets idly generating capital appreciation that neither the DIA nor the City uses to any purpose, or do we actively generate capital income with them, massive capital income that we can partly reinvest in fully funding the arts, sciences and humanities [[which have already generated this vast wealth for Detroit), using the rest to support essential services that let Detroit residents and visitors live, work, play and create safely?

If Detroit didn't have its DIA art collection, or didn't have any way to mobilize its financial value besides losing its cultural value by selling it off, this discussion would not have much point. Since the city has its Monet and can have money too, though, I think folks who'd like the city to invest in arts, sciences, humanities and essential services would probably like a say on whether these assets work for the city financially as well as culturally, or continue to idle financially, leaving culture underfunded. If Detroit uses its existing art collection and new tools to solve its financial problems, that might even fix enough of its other problems that it wouldn't be a broken system anymore.

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Originally Posted by daisy

If we place the assets of the DIA on the table to resolve our financial issues I believe that the contributions to this great museum will significantly decrease.

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We absolutely agree on that one, Daisy. New cash contributions would indeed plummet. Of course, they should if the DIA art collection's financial value from generations of accumulated donations and capital appreciation can already generate far more capital income than the DIA needs to fully fund its existing operations and add massive new arts outreach to the community -- reopening all the closed and closing library branches, for example, and turning them into museum/library branches that complement comprehensive new arts education in the schools with new arts programs in the neighborhoods. New contributions really should go to other museums and other causes that haven't already generated more than enough wealth to take care of themselves in perpetuity while still giving back far more to their communities than they can give today when their operations subsist on meager new cash contributions. That's not to say that collectors wouldn't still want to give their collections to museums to share with the wider community. It just means that cash gifts to most art museums would be superfluous once every artwork donation has the potential to add to the museum's cash endowment as well as its cultural endowment.

You may find this new vision -- of a DIA that's already wealthy enough to need no new cash contributions -- more than a bit disorienting since you've likely never thought of a museum art collection's value in this dual way before. I've had years to get used to it and new vistas still emerge for me with some regularity. It's a pretty attractive vision once you get past any initial disorientation, though. It starts to give the arts, sciences and humanities the financial credit they deserve for the cultural value they add. That, in turn, should lead to many more good things for the arts, sciences, humanities and cultural values. Let that sink in and see if you like it. And if you see any specific problems, I'm more than eager to hear about them. I expect I'll already have answers, and expect to share them with clients promptly and the public as clients implement these new policies and practices. Still, you might just surprise me -- whoo-hoo!

What other repositories are using this concept?

1. The DIA is very aware that is belongs to the city and makes it a point to look like a good city asset, so it doesn't go around distancing itself from Detroit.

2. The more I think about the idea that art would be sold in receivership, the more I am convinced that the state would intervene to prevent this from happening. The state has given the museum many millions of dollars over the years and is as much a stakeholder in this as anyone. If Michigan's trove of great art [[yes, much of it claimed by Detroit) is lost, the state gets a black eye.

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Originally Posted by 1953

1. The DIA is very aware that it belongs to the city and makes it a point to look like a good city asset, so it doesn't go around distancing itself from Detroit.

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Michael O'Hare studies museum asset performance, 1953, and would likely beg to differ on what makes a city asset good:

http://papers.ssrn.com/sol3/papers.c...act_id=1262403

The policy principles are clear despite the way hiding museum assets from the public muddies the discussion. Better policies and practices could provide the funds that make the DIA an even better asset

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Originally Posted by 1953

2. The more I think about the idea that art would be sold in receivership, the more I am convinced that the state would intervene to prevent this from happening. The state has given the museum many millions of dollars over the years and is as much a stakeholder in this as anyone. If Michigan's trove of great art [[yes, much of it claimed by Detroit) is lost, the state gets a black eye.

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Linda Sugin studies art museum ownership by non-museums, and might beg to differ on any state intervention:

http://papers.ssrn.com/sol3/papers.c...act_id=1607133

The legal principles and Detroit's rights are quite clear despite the way hiding museum assets from the public muddies the discussion. Of course, if Detroit even nods in the direction of mobilizing its art assets there's no chance a receiver or emergency financial manager or bankruptcy judge would ever have any say over selling the City's art assets. Standing pat is the only way Detroit gives up control and risks a black eye for Detroiters and other Michiganders, so let's hope Detroit takes action.

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Originally Posted by Baselinepunk

What other repositories are using this concept?

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The store of value concept keeps a lot of gold vaults in business, Baselinepunk. Of course, art in a museum is even better than gold in a vault because art investing is socially-responsible It stimulates artistry rather than holes in the ground [[some where you dig the gold out, others where you lock the gold in).

Simply citing one paper or two on the concept is not a compelling argument. Of course Mr. O'Hare may beg to differ; however, Mr. O'Hare is a professor in public policy. What museum-based education does he have? What other museum collections-based work has he done? What is your association to him and what do you stand to gain if the DIA uses this concept?

Further, I'm very interested to know what professional associations you are member of, in good standing, Coaccession. Also, again what current repositories use this new concept you're advocating?

"The store of value concept keeps a lot of gold vaults in business, Baselinepunk. Of course, art in a museum is even better than gold in a vault because art investing is socially-responsible It stimulates artistry rather than holes in the ground [[some where you dig the gold out, others where you lock the gold in)."

That's what I thought. Gold and art are two completely different "things". Further, you did not name one repository that uses this "concept" you're suggesting. You tried to name a type, and tried to extrapolate concepts and practices between apples and oranges.

Quote:

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Originally Posted by Baselinepunk

Simply citing one paper or two on the concept is not a compelling argument.

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No, but at least it points to one or two... It lets anyone interested know that there's another side to the story.

Quote:

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Originally Posted by Baselinepunk

Of course Mr. O'Hare may beg to differ; however, Mr. O'Hare is a professor in public policy. What museum-based education does he have? What other museum collections-based work has he done?

---

On the other hand, asking if someone has drunk a particular flavor of Kool-Aid is no argument at all. Can you cite anyone poking holes in his argument? What does he write that's wrong?

Quote:

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Originally Posted by Baselinepunk

What is your association to him...?

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Is that supposed to be an argument? Isn't a bit... ad hominem?

I happen to agree with the man that the trillions of dollars in liquid assets wrapped up in museum collections ought to provide far more benefits to the public than they do now... not that they don't provide benefits, but that the scale of the investment argues for far more benefits.

Quote:

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Originally Posted by Baselinepunk

...and what do you stand to gain if the DIA uses this concept?

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As I've written here before, advising Detroit about how best to mobilize the DIA art collection's financial value would provide me with some agreeable work... and [[don't tell anyone) quickly advance the eeeeevillll conspiracy O'Hare and I have to chop up all the world's puppies and kittens in blenders with dull blades!

Quote:

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Originally Posted by Baselinepunk

Further, I'm very interested to know what professional associations you are member of, in good standing, Coaccession. Also, again what current repositories use this new concept you're advocating?

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Not drinking any particular Kool-Aid flavor, and I'm proposing a new idea. If you see anything wrong with it besides it being a new idea advanced by an outsider, please do let us know here. Citations will do just fine, especially if you provide handy links. I'm happy to engage with whatever problems you see with my new concept as long as that doesn't compromise any competitive advantages I have in financial mobilization... or blenders.

Quote:

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Originally Posted by Baselinepunk

That's what I thought. Gold and art are two completely different "things".

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Is too! Is not!! Is too!!! Is not!!!! OK, I give. Art is not a store of value. But then, I'm easy. Try to convince Sotheby's, Christie's and the art dealers, not to mention the collectors.

Quote:

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Originally Posted by Baselinepunk

Further, you did not name one repository that uses this "concept" you're suggesting.

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It's a new idea. Call the cops.

Quote:

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Originally Posted by Baselinepunk

You tried to name a type, and tried to extrapolate concepts and practices between apples and oranges.

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You know, there are two kinds of people in this world... the kind of people who think there are two kinds of people in this world, and the kind who don't. And the kind that think about museums without getting a museum education... well, those are the worst kind of all.

Hey! Where's your blog?

"No, but at least it points to one or two... It lets anyone interested know that there's another side to the story."

False dichotomy. There are many sides to a position. You've used two flimsy citations as support and you do not present a convincing/compelling argument.

"On the other hand, asking if someone has drunk a particular flavor of Kool-Aid is no argument at all. Can you cite anyone poking holes in his argument? What does he write that's wrong?"

Red Herring. My question was clearly asking what credibility this person has, and why we should take his voice on this matter seriously.

"Is that supposed to be an argument? Isn't a bit... ad hominem?"

Negative; it's clearly, simply asking what your association to him is as a means to evaluate your [and your sources] creditability. Put simply, why should we even take you and this concept seriously? If it's such a good concept surely you can present some hard evidence of it's success.

"I happen to agree with the man that the trillions of dollars in liquid assets wrapped up in museum collections ought to provide far more benefits to the public than they do now... not that they don't provide benefits, but that the scale of the investment argues for far more benefits."

Agree away; that doesn't make it a fact. edit::: The collections the DIA is responsible for are not considered liquid. There are a very large amount of objects that have conditional/restrictions on them regarding their DEaccession, "coaccession".

"As I've written here before, advising Detroit about how best to mobilize the DIA art collection's financial value would provide me with some agreeable work... and [[don't tell anyone) quickly advance the eeeeevillll conspiracy O'Hare and I have to chop up all the world's puppies and kittens in blenders with dull blades!"

Isn't the last bit ad reducto absurdum? So, finally we are able to see what your motivation is; you're looking for a paycheck and "coaccession" is your vehicle.

"Not drinking any particular Kool-Aid flavor, and I'm proposing a new idea. If you see anything wrong with it besides it being a new idea advanced by an outsider, please do let us know here. Citations will do just fine, especially if you provide handy links. I'm happy to engage with whatever problems you see with my new concept as long as that doesn't compromise any competitive advantages I have in financial mobilization... or blenders."

Spoken like a true Blogger. lol. Perhaps instead of side-stepping my questions, you could actually answer my questions. Further, I don't research for free. You want information from me, you can PM me and you better have PayPal, pal.

"Is too! Is not!! Is too!!! Is not!!!! OK, I give. Art is not a store of value. But then, I'm easy. Try to convince Sotheby's, Christie's and the art dealers, not to mention the collectors."

Why would I have to? Those places do not function like an ethical collections department such as the DIA.

"It's a new idea. Call the cops."

Seriously? Lame. It's not new. Capitalist Pig Dogs having been doing this for yearsssss.

"You know, there are two kinds of people in this world... the kind of people who think there are two kinds of people in this world, and the kind who don't. And the kind that think about museums without getting a museum education... well, those are the worst kind of all."

lol. False Dichotomy. Ooopps. My bad. You actually listed three types of people when you were trying to make a point about only two types of people.

Perhaps False Trihotomy? lol.

"Hey! Where's your blog?"

Why in Hell would I need a blog? Blogs are soooooo 20th Century. Are you looking for me to add you to my Live Journal, too?

By the way, folks may wonder about the astonishing numbers I cite for the value of Detroit's art collection and the capital income it could produce. Well, the Toledo Museum of Art's director Brian Kennedy calls the value of his museum's collection astonishing at 47:44 in this recording of his panel with the DIA's Graham Beal and the Cleveland Museum of Art's David Franklin, moderated by Judith Dobrzynski:

http://www.youtube.com/watch?v=8DFkmhNqRnM

Kennedy says [[you can follow along at 47:44 if you don't trust me): "…for example, insurance bills like we have, they reflect an asset base that's absolutely astonishing, so it raises the reasonable question, "So, what are you doing to account for your assets?"

It's not easy getting good market value estimates for museum collections. For example, the new Clyfford Still Museum in Denver recently sold four Still paintings to create the operating endowment they couldn't raise otherwise. The four Stills went for $114 million at Sotheby's. The 825 Stills the museum still has [[not to mention 1500 works on paper, etc.)? Director Dean Sobel estimates the museum collection's value at roughly $1 billion, even as he claims a woman stumbling into a painting at a reception damaged one worth about $30 million. Either the average value of the collection's other paintings is down around $1 million, or Sobel is lowballing the market value of the collection, perhaps by a factor around 25.

The DIA says Detroit's art collection is worth "more than $1 billion." Lowball? One of the few museum art collections that has had many published estimates of its market value was that of the Barnes Foundation [[its contested move from suburban Merion to central Philadelphia prompted a lot of discussion). These estimates ranged from $5 billion to $50 billion for its 2500+ objects, with most citations falling around $25 billion or $30 billion. The DIA has 60,000+ objects. If their market value compares to those of the Barnes on average, the math says a range of $120 billion to $1.2 trillion, with most citations falling around $600 billion to $720 billion. That's a range from $200k per object to $2 million, with values like $1 million to $1.2 most cited, and the DIA saying their average object is worth more than $17k. True, Albert Barnes was a spectacular collector, but the DIA has had some good ones too. Maybe Graham Beal will tell us what insurance coverages the Founders Society carries for Detroit's art collection.

Even if the low end of the Barnes estimates per object is substantially above the DIA's true market value per object -- and estimates are notoriously poor predictors of auction performance -- there's plenty of room for Detroit's art collection to be worth many, many billions and its capital income to provide hundreds of millions of dollars per year in new revenues to Detroit. Hundreds of millions in annual revenue. Even coming from an outsider with a new unproven idea, the suggestion that Detroit ought to discuss how to manage these assets for the public's highest and best uses seems pretty reasonable. I'm pretty confident that my tools will give Detroit the best results, even if I don't belong to the all the right professional associations. At this point, if you ask those associations what Detroit ought to do to complement cultural benefits with financial benefits, they'll tell you to forget about financial benefits. Do you think Detroit should forget about getting financial benefits from the many, many billions of liquid assets that the City owns? No, I didn't think so. And the beauty of Coaccession is you get the financial benefits without giving up the cultural benefits... your Monet, and money too!

Wherever you are, Rosa, you ought to take great satisfaction about asking the question about bankruptcy and the DIA. It turns out there's a very important, and very under-appreciated, connection.

Reminds me of the people pushing this....http://www.interstatetraveler.us/

This conversation is too rich for my blood. I'll just say that I think we'd be in pretty rough shape as a city and state the day we ever let master works by Van Gogh, Picasso, etc. leave our coffers.

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If their market value compares to those of the Barnes on average.

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They don't. I wouldn't hazard a guess as to the actual amount, but the Barnes is a relatively small collection of high-quality objects, many of which are in categories which are in favor now, while the DIA is a large collection of a broad variety of objects, many of which aren't particularly valuable. I'm not saying the collection isn't tremendously valuable, but you can't value it on the basis of the Barnes.

Please keep this discussion about the DIA and avoid personal exchanges. [As I put away the mop]

Quote:

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Originally Posted by mwilbert

{DIA market value don't compares to those of the Barnes on average. I wouldn't hazard a guess as to the actual amount, but the Barnes is a relatively small collection of high-quality objects, many of which are in categories which are in favor now, while the DIA is a large collection of a broad variety of objects, many of which aren't particularly valuable. I'm not saying the collection isn't tremendously valuable, but you can't value it on the basis of the Barnes.

---

OK, don't hazard a guess on any exact amount, but do you think the DIA's current market value is more likely to fall in a range of $1billion to $10billion, $10billion to $100billion, or $100 billion to $1trillion?

Quote:

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Originally Posted by Coaccession

OK, don't hazard a guess on any exact amount, but do you think the DIA's current market value is more likely to fall in a range of $1billion to $10billion, $10billion to $100billion, or $100 billion to $1trillion?

---

Interesting question... just for the sake of arguing lets assume that the "average" value of each DIA item were $100K. Then $100,000 x 60,000 = $6,000,000,000

But since we don't know the average value... this becomes a guessing game.

Quote:

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Originally Posted by lilpup

There must be some types of protection in place for municipal assets while in receivership. Cleveland didn't lose their art institute or zoo when they entered receivership.

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Cleveland's zoo belongs to Cleveland Metroparks, a political subdivision of the state, so the city's receivership didn't matter there. Finding that was easy. CMA is another matter. Their website is very upfront about the land they're on, which belongs to the city. However, the Art Institute of Chicago is in Grant Park and Chicago doesn't own that institution.

I'll quote a comment from blog.cleveland.com:

"The Museum is funded by the Public and has received numerous State and Federal Grants along with a Tax for the Arts instituted by the City of Cleveland a few years ago.
The Museum requires Climate Control for temperature,humidity etc for a considerable amount of the Publicly Owned collection.
So why do they not have back-up generators ?
Or am I living in the Jurassic Period ?"

Maybe MrSluggo has the goods on the public's ownership of that collection. The DIA is upfront now about city ownership, but when I first checked their fast facts, it had nothing about that [[if memory serves from last year). DetroitYes, on the other hand, is the best source I've found so far, especially since lilpup, Lorax and 1953 explain the caveats here [[or try to):

Quote:

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Originally Posted by lilpup

Cman, that's not really an exact picture of the situation. Many of the works in the DIA are on loan or were purchased by non-DIA entities. The City owns the property and some of the collection, but not all.

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Quote:

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Originally Posted by Lorax

I believe the Founder's Society has control over operations at the museum, a role they accepted in recent years. I believe the city owns the building and land, and the collections are largely endowments which are not technically owned by the city, since they can't be sold unless voted upon by a majority of the Founder's Society board. At least that's my recollection.

---

Quote:

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Originally Posted by 1953

I previously worked at the DIA. The building and some of the collection is owned by the city. The collection is managed by the Founders Society, which also owns some of collection. Many pieces were donated with restrictions as to what can happen to them. The museum does not make a practice of selling pieces in its collection [[with some exceptions), because it is a member of the American Museum Association. If the city were to go into bankruptcy or receivership, I am pretty certain that the museum would be spun off entirely to the founder's soceity and no one else; the founder's soceity is almost entirely funded by sources outside of the city.

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As lilpup told cman710, you can't exactly believe everything you read in the DIA's annual report.

cman710 did say he'd try to find out how much art the city owns:

Quote:

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Originally Posted by cman710

Lilpup, I did think that many of the works of art are probably donated, and that is a good point. I am not certain how much of the art the city owns, though I will poke around and see if I can find anything. Still, I think the value of whatever the city does own could be in the hundreds of millions.

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Well, DetroitYes is good, but we haven't gotten to the bottom of city ownership yet. I suspect, however, that some of the collection is at risk in a bankruptcy -- unions are pushovers compared to bondholders! The receiver or bankruptcy judge at that point has federal authority, with supremacy over DIA bylaws and Detroit codes and Michigan laws. Federal bankruptcy code takes those into account [[e.g., you can't lose your homestead to bankruptcy in Florida), but they don't trump it in court.

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Originally Posted by Novine

Reminds me of the people pushing this....http://www.interstatetraveler.us/

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Funny, Novine, your remark reminds me, for some odd reason, of those ethical collections departments where artworks can't store value. If I could only find a link...

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Originally Posted by 1953

This conversation is too rich for my blood. I'll just say that I think we'd be in pretty rough shape as a city and state the day we ever let master works by Van Gogh, Picasso, etc. leave our coffers.

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Well, 1953, it makes my blood run a bit cold to think that Detroit would choose Van Goghs and Picassos over police, firefighters, paramedics, utility workers, library branches, meals on wheels, cancer meds... oh, wait a second... Detroit already made choices like that. I wonder if it has any better options? Did someone say Coaccession?? Have your Monet and money, too? You don't have to choose between the money and the Monet? What a concept!

Quote:

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Originally Posted by Gistok

Interesting question... just for the sake of arguing lets assume that the "average" value of each DIA item were $100K. Then $100,000 x 60,000 = $6,000,000,000

But since we don't know the average value... this becomes a guessing game.

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Skate’s Top 5000 peer group of the world’s most valuable artworks at auction prices has a current threshold price of $2.136 million, Gistok, and a combined value [[market cap) of $30.5 billion. That threshold alone is above the high-range Barnes average [[$2 million), and the Skate's Top 5000 average, at $6.1 million, is way, way above. Still, you'd think with 60,000+ artworks, the DIA could easily match the Skate's 5000 market cap of $30 billion -- that's only $500k per artwork on average.

If Detroit has its Monet and money too, well, that kind of cash endowment would mean considerable new revenues for the city.

"If Detroit has its Monet and money too, well, that kind of cash endowment would mean considerable new revenues for the city."

I know you think that tag line is clever but it's getting old.

So, the City of Detroit is tasked with supporting institutions and facilities used by the entire region but people only speak up when these things might be closed or sold off.

Meanwhile, how many denied regional arts millages have we seen in the past decade? Three?

Quote:

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Originally Posted by Novine

I know you think that tag line {If Detroit has its Monet and money too} is clever but it's getting old.

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Well, my favorite so far is Coaccession... because art cannot live by appreciation alone, but it's pretty ethereal and Detroit seems more visceral so I've been going with money. I'm quite open, though, to suggestions -- well, let's be specific: tag-line suggestions -- if you think you can do better.

By the way, let me guess, Novine... you're not facing a layoff notice from the city. Otherwise, more money for Detroit would never get old.

Quote:

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Originally Posted by Novine

"If Detroit has its Monet and money too, well, that kind of cash endowment would mean considerable new revenues for the city."

I know you think that tag line is clever but it's getting old.

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Novine... Google "Coaccession" and check out the art news items and the youtube sites...

That catch phrase is a slogan for the process....

What I can tell is that this idea was patented about 4 years ago... but has not been implemented anywhere...

With the dire straits that Detroit finances are in... if this idea is EVER implemented... Detroit would be a likely candidate. But that's a big IF... :confused:

Still not even close to being sold on the concept, nor the "supporting evidence" presented.

What opinion does the AAM have on this "concept"?

This "coaccession" guy doesn't happen to be the one who patented this idea, are they?

Quote:

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Originally Posted by Baselinepunk

This "coaccession" guy doesn't happen to be the one who patented this idea, are they?

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BINGO!!!
http://www.youtube.com/watch?v=KTJjbCAKXeM
http://www.youtube.com/watch?v=J0hoU...eature=related

Quote:

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Originally Posted by Baselinepunk

What opinion does the AAM have on this "concept"?

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Baselinepunk, the AAM thinks it's eeeeevilllllll.

What does that matter, though, if the artworks belong to Detroit and not to a museum? For that matter, what would it matter if the National League of Cities had an opinion? Detroit's ownership means the artworks' disposition is up to Detroit, not anyone else -- unless Detroit stands pat and turns the decision over to an EFM or... a bankruptcy judge. And in the latter case, the important question will be how much money can Detroit get to its bondholders by selling the Monet.

Quote:

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Originally Posted by Coaccession

Baselinepunk, the AAM thinks it's eeeeevilllllll.

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In other words, it's a pointless discussion. They will always listen to the AAM over a random poster on DYes.

Quote:

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Originally Posted by noise

In other words, it's a pointless discussion. They will always listen to the AAM over a random poster on DYes.

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They, noise? If you're talking about the Founders Society, a contractor who runs the DIA for Detroit [[until 2018), yes, they will always listen to the AAM over a random DYeser. They've drunk the museum school Kool-Aid and will always try to one-up the next museum on the holier-than-thou scale. If you're talking about the City of Detroit, though, you'll likely see them choosing the best practical advice, rather than choosing the holiest source.

For example, if a museum fails, the AAM says it should give its collection to a healthy museum. It doesn't say sell the collection, it says make a gift of it. If Detroit goes bankrupt so a bankruptcy judge decides what to do with the collection, do you think the bondholders and union members and residents won't argue that the AAM is wrong, and the financial value of Detroit's DIA collection should benefit the people who loaned to and worked for and lived in Detroit. A judge will break up the collection. The AAM is idealistic. The world is practical.

Another example: if a museum is in financial trouble, the AAM says beg harder for money. It says using your collection's financial value to head off financial problems is eeeeevillll! If begging harder doesn't work, it's OK. Just gift your collection to healthy museum. I'm sure Bloomfield Hills or Gross Pointe would be happy to set up a healthy museum to receive the DIA's collection. If Detroit is out billions and billions of dollars in financial value, the AAM says, that's OK. The important thing is not taking care of Detroit's residents, the important thing is safekeeping for the collection.

Let's just head off the bankruptcy, OK. Detroit's illiquid, but it's not insolvent. It's got billions and billions of dollars in the DIA, and could generate hundreds of millions of dollars in new revenues with that value, if not billions in new revenues.

I didn't invent Coaccession to get rich. I invented Coaccession to get archaeologists and collectors to quit fighting and start working together to preserve archaeological sites and antiquities. By sharing ownership, archaeologists get what they want -- research, exhibits, conservation -- and collectors get what they want -- the joy of possessing antiquites and a shot at capital appreciation. Heck, you can even keep the antiquities at the museum, and investors will pay for a shot at capital appreciation. Most of the financial value is in what collectors and investors want, most of the cultural value is in what archaeologists want. Thus, museums can have what they want, and collectors finance the digs and the museums. The AAM may think that's eeeevilll, but I think it's quite practical. As I lived with the concept, many other applications occurred to me, and I've come to think of shared ownership as very practical for all kinds of collections and all kinds of communities -- artworks supporting the arts, antiquities supporting archaeology, specimens supporting the sciences, rare books supporting libraries, archives supporting history, etc., etc. It's certainly practical for Detroit, which could use the support for its arts, sciences and humanities, and could also support essential services since the DIA's collection is so hugely valuable, financially as well as culturally.

Consider the concept, not the source. Study nature, not books. Otherwise, we'll just be trapped in a maze of scholasticism and our practical understanding of the world won't progress.

"What does that matter, though, if the artworks belong to Detroit and not to a museum?"

This statement, alone, is very illustrative of just how flawed this concept is at its foundation.

My honest hope is that this guy doesn't get a hold of some smaller museum that's hard up for money and has an important piece or two. May the Gods have pity on them if they ever shack up to this concept.

Quote:

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Originally Posted by Coaccession

Baselinepunk, the AAM thinks it's eeeeevilllllll.

What does that matter, though, if the artworks belong to Detroit and not to a museum? For that matter, what would it matter if the National League of Cities had an opinion? Detroit's ownership means the artworks' disposition is up to Detroit, not anyone else -- unless Detroit stands pat and turns the decision over to an EFM or... a bankruptcy judge. And in the latter case, the important question will be how much money can Detroit get to its bondholders by selling the Monet.

---

Start selling her assets and see how fast bondholders move to force bankruptcy ,they are worth more unsold then sold.

Quote:

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Originally Posted by Coaccession

They, noise? If you're talking about the Founders Society, a contractor who runs the DIA for Detroit [[until 2018), yes, they will always listen to the AAM over a random DYeser. They've drunk the museum school Kool-Aid and will always try to one-up the next museum on the holier-than-thou scale. If you're talking about the City of Detroit, though, you'll likely see them choosing the best practical advice, rather than choosing the holiest source.

For example, if a museum fails, the AAM says it should give its collection to a healthy museum. It doesn't say sell the collection, it says make a gift of it. If Detroit goes bankrupt so a bankruptcy judge decides what to do with the collection, do you think the bondholders and union members and residents won't argue that the AAM is wrong, and the financial value of Detroit's DIA collection should benefit the people who loaned to and worked for and lived in Detroit. A judge will break up the collection. The AAM is idealistic. The world is practical.

Another example: if a museum is in financial trouble, the AAM says beg harder for money. It says using your collection's financial value to head off financial problems is eeeeevillll! If begging harder doesn't work, it's OK. Just gift your collection to healthy museum. I'm sure Bloomfield Hills or Gross Pointe would be happy to set up a healthy museum to receive the DIA's collection. If Detroit is out billions and billions of dollars in financial value, the AAM says, that's OK. The important thing is not taking care of Detroit's residents, the important thing is safekeeping for the collection.

Let's just head off the bankruptcy, OK. Detroit's illiquid, but it's not insolvent. It's got billions and billions of dollars in the DIA, and could generate hundreds of millions of dollars in new revenues with that value, if not billions in new revenues.

I didn't invent Coaccession to get rich. I invented Coaccession to get archaeologists and collectors to quit fighting and start working together to preserve archaeological sites and antiquities. By sharing ownership, archaeologists get what they want -- research, exhibits, conservation -- and collectors get what they want -- the joy of possessing antiquites and a shot at capital appreciation. Heck, you can even keep the antiquities at the museum, and investors will pay for a shot at capital appreciation. Most of the financial value is in what collectors and investors want, most of the cultural value is in what archaeologists want. Thus, museums can have what they want, and collectors finance the digs and the museums. The AAM may think that's eeeevilll, but I think it's quite practical. As I lived with the concept, many other applications occurred to me, and I've come to think of shared ownership as very practical for all kinds of collections and all kinds of communities -- artworks supporting the arts, antiquities supporting archaeology, specimens supporting the sciences, rare books supporting libraries, archives supporting history, etc., etc. It's certainly practical for Detroit, which could use the support for its arts, sciences and humanities, and could also support essential services since the DIA's collection is so hugely valuable, financially as well as culturally.

Consider the concept, not the source. Study nature, not books. Otherwise, we'll just be trapped in a maze of scholasticism and our practical understanding of the world won't progress.

---

Well, good luck getting the City of Detroit to ignore their museum experts and start listening to a loner with a website.

Quote:

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Originally Posted by Gistok

With the dire straits that Detroit finances are in... if this idea is EVER implemented... Detroit would be a likely candidate. But that's a big IF...

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Dire straits, indeed, Gistok.

Quote:

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Originally Posted by Baselinepunk

My honest hope is that this guy doesn't get a hold of some smaller museum that's hard up for money and has an important piece or two. May the Gods have pity on them if they ever shack up to this concept.

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You must love Fresno's outcome, Baselinepunk, the way you keep trying to set Detroit up for the same. No, the AAM doesn't like talking about that one, beyond a tut-tut.

Quote:

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Originally Posted by Richard

Start selling her assets and see how fast bondholders move to force bankruptcy, they are worth more unsold then sold.

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Uh, pretty hard for anyone to force bankruptcy on an entity that's got the cash and a willingness to pay its bills, Richard. Just saying. Of course, no one is seriously talking sale here, despite its frequent appearance as a strawman.

Quote:

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Originally Posted by noise

Well, good luck getting the City of Detroit to ignore their museum experts and start listening to a loner with a website.

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The long version was clearly too much, noise, so here's a condensed one: Museum experts tell Detroit to get lost, making the AAM happy, or loner with website* tells Detroit to get whole, making residents, union members, bondholders, museum-goers [[yes), artists, writers, etc., etc., etc. happy. Go ahead, keep backing the loser!


*and finance PhD earned with experimental research supervised by Economics Nobel laureate

Yet here you are, unable to convince anyone your idea is worthwhile. At least you think highly of yourself. Don't let anybody take that away from you.

Quote:

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Originally Posted by noise

Yet here you are, unable to convince anyone your idea is worthwhile.

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It's a tough thread, no doubt. But this thread's not the world. It's not even Detroit. But, it's a nice slice.

Quote:

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Originally Posted by noise

At least you think highly of yourself. Don't let anybody take that away from you.

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Actually, my own shortcomings are legion, starting with my difficulties in convincing people on this thread. What earns my highest admiration is this inspiration that popped into my brain, which is such a neat division of cultural rights and financial returns that it lets museums have major collections without tying up much capital and gives collectors and investors attractive ways to maximize the social responsibility of their savings. When I compare it to alternatives, I always marvel at the value it creates via the value it unleashes.

"Actually, my own shortcomings are legion, starting with my difficulties in convincing people on this thread. What earns my highest admiration is this inspiration that popped into my brain, which is such a neat division of cultural rights and financial returns that it lets museums have major collections without tying up much capital and gives collectors and investors attractive ways to maximize the social responsibility of their savings. When I compare it to alternatives, I always marvel at the value it creates via the value it unleashes."


Holy shit. This is gotta be a line straight out of some B-Rated '80s film.

Don't stop believing, eh?

Quote:

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Originally Posted by Baselinepunk

...

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"If you can't keep up with the conversation, better not join in at all." With HL's advice, Fresno, you avoid removing all doubt.

Maybe it really is a wrap for this 2011-2012 revival of the original 2009 thread, but...

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Originally Posted by Retroit

I predict that 20 years from now, DetroitYESers will be debating whether the long-abandoned DIA should be turned back into an art museum or converted into a mass transit station or a backdrop for movies and outdoor concerts.

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With lilpup and 1953 posting that some of the collection at the DIA already belongs to the Founders Society rather than the Detroit Arts Department, and AAM/AAMD museum ethics guidelines saying Detroit should gift its part of the collection to another museum if it goes bankrupt, perhaps Detroiters will soon have to hike up to the Bloomfield Hills Institute of Arts to see their Monet [[or will it be the Gross Pointe Institute of Arts?), and DetroitYESers will revive this thread again in 2029 to have the debate Retroit predicted. Still, you have to hope that Detroit's municipal code has a stronger say in all this than AAMD's ethical code [[that's the point of the Linda Sugin article I linked earlier). If that's the case, then Detroit would still have its art collection and the DIA would never have been abandoned... at least as long as Detroit does the sensible thing and has its Monet and money too... the money it needs to avoid bankruptcy, that is.

More on why selling the DIA is a nonstarter:

http://www.crainsdetroit.com/article...ve-worth-much#

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Originally Posted by 1953

More on why selling the DIA is a nonstarter:

http://www.crainsdetroit.com/article...ve-worth-much#

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More? More of the same is more like it, 1953... Pam Marcil and Bob Berg trotting out the same old tired arguments that turned up on this DetroitYES thread weeks ago. Although I also oppose any sales of artworks -- why deaccession when you can Coaccession for about the same money??? -- this article makes it quite clear that no current law stands in the way. Otherwise the Founders Society PR people would have given Nancy Kaffer chapter and verse in response to her 1/8/12 Crains Detroit article* that mentions the DIA as a possible source of cash for a Detroit restructuring.

Crain's Nancy Kaffer reports: "With state approval, [Bettie Buss of the Citizens Research Council] said, city-owned land, buildings, equipment, furnishings, and collections would all be eligible for sale, as long as the health and welfare of residents and legal rights of bondholders and other lenders are protected.
...
Wait … what was that about the city's collections?"

Check! Despite some wishful thinking along the way, that's pretty much where this thread was on that issue.

"The DIA is one of the top art museums in the country. A city report from 2004, when the DIA was still a city department [sic - the DIA is still a city department, with Graham Beal as the Arts Department director; the last status change was 1998, when Dennis Archer had the Founders Society take over the rest of DIA's management] valued the museum's collection at more than $1 billion."


Way, way, way more than $1 billion now -- many, many billions more. Then, too. The Founders Society is not going to tell Detroit just how much money Detroit really has tied up in the DIA collection unless Detroit makes it tell. And, you've got to wonder whether the DIA uses FASB 116 correctly to keep the collection's financial value off the books when the collection ultimately belongs to the City of Detroit, not an independent museum. If I had a bond indenture or union contract with Detroit, I'd certainly insist that financial value go on the books, and all the more so when the City is running out of cash!


"And the value of that collection has been popping up more and more in these conversations about the city's cash problem."


Not only was the value of the collection popping up in conversations, it popped up 10% in last year's art markets too. That was, most likely, more than $1 billion in capital appreciation in the last year alone.


"But could the city sell off pieces from the DIA?


Technically, yes."


Technically? Technically?? Let's not mince words. The answer is yes... and it's a bad idea the City ought to avoid. Unfortunately, in a financial emergency or bankruptcy, the City government no longer makes that decision. So, let's mobilize the DIA collection's financial value to head off a financial emergency or bankruptcy! Why take chances?


"When the city transferred governance of the museum to the nonprofit authority [i.e., the Founders Society] that currently runs the joint, Detroit retained ownership of the collection, the building and the grounds, said Pam Marcil, the DIA's director of public relations.

She referred further questions to PR heavy hitter Bob Berg of Berg Muirhead. [[See? I told you we started a panic.)


'The DIA's art collection is held in trust for the benefit of the public,' Berg said. 'Works of art may not be sold except to purchase further art for the DIA's collection.'"


If that were in current federal law, Michigan state law, Detroit municipal code, or the Operating Agreement for the Detroit Institute of Arts [[i.e., the contract between the Founders Society and the City of Detroit, overseen by the Arts Commission), then Marcil and Berg would have pointed it out. If I were a bondholder, union employee or city resident, I'd watch my senators, representatives and aldermen very carefully to make sure none of them introduce any legal changes that would take away Detroit's rights to its art collections and other collections, thereby avoiding any questions about fraudulent conveyance if Detroit does face a bankruptcy.


"In the museum world, selling art for money is a big no-no – as in, if you did it, you'd lose your standing as respected museum, no one would ever again donate any work of art more valuable than a cocktail napkin doodle. And furthermore, wealthy people would stop leaving money to the institution. Basically, it'd be the same as sending in a wrecking crew."


Museums sell art for money day in and day out, but they do it to let today's curators overrule the decisions or deals or promises that yesterday's curators made. And Donn Zaretsky hoists the museum world with this petard of theirs day in and day out at theartlawblog.blogspot.com. My particular favorite Zaretskyism is Schrodinger's Deaccession**, which is both ethical and unethical at the same time -- you don't find out which until you open the box! The Founders Society decided to quit buying art with their art acquisition funds -- taking money that belongs to Detroit's citizens and using it to pay their own salaries*** -- but that wasn't a big no-no because they, in their superior wisdom, just decided it wasn't. And so wealthy people won't stop leaving money to the institution and it's not the same as sending in a wrecking crew. I guess that's why Marcil and Berg didn't call Nancy Kaffer and Sherri Welch to highlight that bit of news.


"Then there's the legal nightmare. Say I'm rich, with great taste in art. Say I'm also a really nice person. So I decide to leave my collection of Albrecht Durer engravings [[hey, a girl can dream) to a museum. And then the museum sells them. Most likely, I or my heirs sue that museum – selling the pieces would clearly not have been what I had in mind when I made the donation."


Yes, ask UM what a nightmare it's been dealing with Frederick Stearns's heirs over the 1970s loss, theft and destruction of hundreds of the historically-important musical instruments that he gave the University over 112 years ago.*** If at least they had sold the instruments to raise an operating endowment for the exhibition, research and care of the remaining instruments, that might have made some sense, but no, the UM found the instruments inconvenient on campus and packed them off to an unheated barn off campus. Stearns was prescient when he wrote: "Under no consideration whatever however would I turn the collection over to the university except with the understanding that it should be immediately housed and installed. I would not consent to it being packed away for some future regent to mount to suit themselves or to neglect entirely." He should have gotten a better lawyer to work on his deed of gift, though, and if anyone wanted to keep the DIA from selling or Coaccessioning their donated artworks, they needed to put that in their deed of gift as well. I'm sure the Detroit won't invite trouble by going against any explicit restrictions.


"It's just a nonstarter."


For selling, that's true, but certainly not for the reasons Kaffer got from Marcil and Berg.


"[[For the record, I'm absolutely opposed to the idea of selling art, even if it were possible. But I've heard the concept mentioned [[in tones of fear and horror, not anticipation) often enough lately that it seemed worthwhile to figure out whether it was an option.)"


Well, for the record I agree, and think it's very important to head off Detroit's financial problems before an emergency financial manager or bankruptcy judge makes the entirely-possible decision to sell some of Detroit's art. As far as figuring out goes, if Nancy's going to go to biased sources -- and that's pretty hard to avoid -- she ought to work hard to find sources with a variety of biases. Or, she could just come to DetroitYES where many points of view are already under discussion.



* http://www.crainsdetroit.com/article...e-lots-of-cash

** http://theartlawblog.blogspot.com/20...accession.html

*** http://www.theartnewspaper.com/artic...-deficit/24228

*** http://www.huffingtonpost.com/2012/0...n_1207543.html

Oooh, sounds like somebody just can't WAIT to get their hands on the city's art collection. Why not call Sherry Washington? Hahahahaha.

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Originally Posted by Detroitnerd

Oooh, sounds like somebody just can't WAIT to get their hands on the city's art collection. Why not call Sherry Washington? Hahahahaha.

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Why call Sherry Washington when Al Taubman's already out of prison?

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Originally Posted by Coaccession

Why call Sherry Washington when Al Taubman's already out of prison?

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Good one.

We certainly need some billionaires to step up and start buying Detroit's assets. Moroun could buy the water department. Maybe Taubman could buy the DIA collection. Then it can be privatized, and people can enjoy paying private lords for the privilege of drinking water or seeing art. After all, what good is all this stuff if you can't make money off it? ;)

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Originally Posted by Detroitnerd

Good one.

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Thanks.

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Originally Posted by Detroitnerd

We certainly need some billionaires to step up and start buying Detroit's assets. Moroun could buy the water department. Maybe Taubman could buy the DIA collection. Then it can be privatized, and people can enjoy paying private lords for the privilege of drinking water or seeing art. After all, what good is all this stuff if you can't make money off it? ;)

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How about you and me buying a few shares in the Monet, Detroitnerd? Detroit's art endowment gets the dividends and interest on our money to make socially-responsible investments in new art commissions, making our share purchases socially-responsible, as well as hiring arts, sciences and humanities teachers, opening museum branches [[jointly with library branches, so the funds bring both art and books to Detroit residents), reopening the Detroit Science Center and rehiring laid-off police officers and fire fighters, and so on. Detroit owns many, many billions in art, and while it's nice to just have the art at DIA, with some on exhibit, it would be even nicer if the art Detroit keeps at the DIA did double duty, acting as a store of value for savings as well as a source of inspiration for culture. Letting Detroit's art collection act as a store of value brings all these other benefits that the Founders Society doesn't offer with the way they run the place now, and would also offer millions of people -- folks like you and me -- a better place to keep some of their savings as part of a balanced portfolio.

Anyway, Taubman doesn't have the kind of money to buy up all the DIA's artworks. If all the Waltons got together, or Bill Gates and Warren Buffett teamed up, the you'd be talking that kind of money. I doubt the whole DIA board of directors together has anything like the money it would take to buy the DIA's collection today.

Speaking of buying up art, it's funny how folks ostensibly on the side of the artist embrace policies that empower the capitalist. Artists ought to retain rights to their creative works, but the common law traditionally treated the sale of an artwork no differently than that of a sack of potatoes. That's changed a bit with continental notions of moral rights and resale royalties working their way into the law via legislation, and individual efforts like the Projansky/Siegelaub contract, but the final sale doctrine pretty much leaves moneyed interests in control, with a crumb or two left for the creatives. Making Coaccession a standard tool for museums and artists would certainly change the balance of power. For better or for worse, it would put Detroit's representatives firmly in control of the DIA because the collection itself would generate the funds to run the place -- artworks funding the arts. The pressure on the DIA's board would be to make the best creative decisions, not to come up with more money every year.

In his brilliant discussion of intellectual property, Adrian Johns fished up a great quote that John Percy had noted: "Capitalists have frequently availed themselves of the brains of poor inventors, without bestowing an adequate reward, if, perchance, they have bestowed any. I have heard one of these gentlemen, himself engaged, as moneyed partner, in large metallurgical operations, cooly declare that brains are more abundant in the world than capital, and ought, therefore, to be had cheap." Substitute talents of artists for brains of inventors and you pretty well describe how the world runs with the traditions that the Founders Society embraces. Perhaps the 99% ought to Occupy DIA and liberate the value of its art for the people.

Does anyone know if Detroit still self-insures its arts collection at the DIA? It covered its art before the Founders Society took over DIA's management with the 1998 operating agreement, and if it still does, the collection is essentially bare. Not only does Detroit have on the order of $20 billion in liabilities, but I'm told the latest CAFR shows negative assets [[!!!) -- at least for what's actually on the books, which the art collection most definitely is not. Best's would not be impressed if the only assets Detroit has to cover its art collection is its art collection.

When Bob Berg of Berg Muirhead says "The DIA's art collection is held in trust for the benefit of the public. Works of art may not be sold except to purchase further art for the DIA's collection," he is repeating the AAM/AAMD line [[that's American Association of Museums/Association of Art Museum Directors). The Founders Society that runs the DIA for Detroit has had it in these associations for a long time, but that's voluntary. DIA is obliged to follow federal law, state law, county code, municipal code and its contract with Detroit, and none of those say DIA may only sell artworks [[i.e., reverse decisions taken by earlier curators, donors, etc.) to buy more artworks [[enshrine decisions by current curators, until someone new comes along). But let's say the Founders Society gets to play by its own museum rules rather than actual laws and contracts. If Detroit goes bankrupt, that may put the DIA collection up in the air. Where would it land under AAM/AAMD rules?

Reporter Amy Rogers Nazarov put together a nice description -- Death With Dignity -- of different fates for various defunct museums:

http://www.aam-us.org/pubs/mn/dwdignity.cfm

Note that the AAM/AAMD doesn't step in to help museums in extremis. If you haven't got the money to keep your museum going, don't come whining to them. No, find yourself a healthy museum and give your collection to them. The 1% get richer, the 99% lose more assets. That's why lawyer Mark Gold questions the ethics of the "No Deaccession" rule [[well, the "No Deaccession Except to Reshape Your Collection" rule):

http://www.aam-us.org/pubs/mn/nothingethicalaboutit.cfm

What museum is healthy enough to support Detroit's DIA art collection? The Cranbrook? Would they get it all, or would Gross Pointe start up a healthy museum so they could split Detroit's collection with Bloomfield Hills? The only thing the AAM/AAMD rule tells us is that whoever gets the collection, they don't have to pay Detroit a penny for it. Bye-bye billions! It was nice having you in the neighborhood for a while.

When the Barnes Foundation moved from suburban Philadelphia to downtown Philadelphia, the Friends of the Barnes called it the Steal of the Century because downtown Philly foundations only put up about $150 million to capture $25 billion in artworks. If the DIA moves from Midtown to Bloomfield Hills or Gross Pointe [[or both), they'll have to call it the Steal of the Millennium -- the Barnes only has 2500+ objects, while the DIA has 60,000+. Meanwhile, Detroit's juggling payroll and vendors and only has to line up 48 unions to keep the DIA away from an EFM or bankruptcy judge.

AAM/AAMD rules? Those are ethical!

Putting the DIA billions to work to fund a Detroit Arts Endowment that makes Detroit even more of an arts destination and keeps Detroit police officers and firefighters and paramedics on the payroll in open police precincts and firehouses while moving the paintings now on the walls in Midtown not a single inch? EEEEVILLLLL!!!!!!

Gotta love those AAM/AAMD rules. They may not save anybody's lives, but they let museum people feel really righteous.

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Originally Posted by 1953

I previously worked at the DIA. The building and some of the collection is owned by the city. The collection is managed by the Founders Society, which also owns some of collection. Many pieces were donated with restrictions as to what can happen to them. The museum does not make a practice of selling pieces in its collection [[with some exceptions), because it is a member of the American Museum Association. If the city were to go into bankruptcy or receivership, I am pretty certain that the museum would be spun off entirely to the founder's soceity and no one else; the founder's society is almost entirely funded by sources outside of the city.

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It's worth emphasizing that AAM/AAMD rules would indeed likely spin off the museum to the Founders Society, as 1953 says, and that Founders Society funding does indeed come almost entirely from Bloomfield Hills and Gross Pointe. Nonetheless, AAM and AAMD are voluntary associations and their rules don't determine what happens to city-owned assets, so the collection won't go to the suburbs. What will likely happen is bankruptcy judge will start selling artworks and will keep selling artworks until all debts and obligations of the City of Detroit are fully paid up. If any of the 48 city unions hold out on Bing's negotiations, you could see the Van Goghs go in a van for delivery to the highest bidder.

Paying off the $20 billion in city debts and obligations -- all accelerated by bankruptcy -- would go through about a third or so of the DIA collection's financial value. That wouldn't be a pretty process, so here's hoping Detroit takes steps to avoid it. It's got the assets -- it just need the character to use them.

Here's one future for the Detroit Science Center:


John Miller, former acting president of the [Detroit] Science Center, said liquidation could begin in 30-45 days.


"Imagine saws and blowtorches coming in there and disassembling exhibits and selling them for nickels on the dollar in order for the bank to recover some of its debt," said Miller, who resigned from his voluntary [Detroit] Science Center post and left the board in early January because of other commitments.*

A better future is possible if Detroit mobilizes the financial value of the assets it owns to supports the arts, sciences and humanities. The value is there -- the 2011 capital appreciation of 10.2% on Detroit's DIA collection was likely well in excess of $1 billion -- and various methods will mobilize that value. A Detroit Arts Endowment could easily fund worthy institutions like the Detroit Science Center with actual capital income -- interest and dividends on investments Detroit could make with the DIA collection's value -- that comes from mobilizing Detroit's unrealized capital appreciation -- the increase in value of Detroit's DIA collection, an increase that doesn't pay any bills for Detroit now. Detroit doesn't have to keep that financial value in its DIA idle. Detroit could put that value to work. If it does, culture will benefit, as well as essential services.


Nah, bring in the saws and blowtorches. The AAM and AAMD say so.



*http://www.freep.com/article/2012012...ut-foreclosure