DIA Millage Proposal

[Coaccession]

... keep in mind, currently I still have to pay to go to the Detroit Zoo, despite the millage that I pay every year. That's why I'm skeptical.

And Annemarie Erickson says the DIA will make sure Detroit will never sell any art, like the Founders Society is in charge of Detroit's Arts Commission, and the Detroit Arts Commission is in charge of the Mayor, City Council and the Financial Advisory Board. The City Charter gives the Mayor and City Council the power to sell any personal property Detroit owns. There's no clause turning that power over to the Founders Society. That alone makes clear, 48091, that you can't believe everything Art is for Everyone is saying to sell this millage to the counties and the voters.

[Scottathew]

http://www.freep.com/article/2012033...e-in-Wayne-Co-

Beal told Wayne commissioners Thursday that the DIA would propose free admission for residents of counties that passed the millage.

Free admission is NOT a part of the millage. It's something that the DIA would "propose".

So this free-admission thing isn't a for-sure. My gut tells me that free admission would not happen. I still pay for the zoo twice, once in my taxes, and once at the gate.

[BigD]

If that's true, I might feel differently.

However, keep in mind, currently I still have to pay to go to the Detroit Zoo, despite the millage that I pay every year. That's why I'm skeptical.

http://www.freep.com/article/2012041...yssey=nav|head

"Erickson sought to assure commissioners that the art would be protected from sale regardless of Detroit’s situation, said the cost of a millage campaign in a general election would be prohibitive and told commissioners that Macomb County residents would get free admission to the museum if they approve a millage."

Just because the Zoo didn't choose to offer free admission to Macomb residents, doesn't mean the DIA can't do it.

[Scottathew]

http://www.freep.com/article/2012041...yssey=nav|head

"Erickson sought to assure commissioners that the art would be protected from sale regardless of Detroit’s situation, said the cost of a millage campaign in a general election would be prohibitive and told commissioners that Macomb County residents would get free admission to the museum if they approve a millage."

Just because the Zoo didn't choose to offer free admission to Macomb residents, doesn't mean the DIA can't do it.

Thank you for the clarification. The information I had found thus far didn't paint it as a definite, your information does.

Knowing that, I would say I'm on the fence, but still very sympathetic to folks that oppose it.

However, I would say that I support this going to a vote so the voters can decide, and not a commission.

Thanks BigD.

[Coaccession]

Since jiminnm gave his long, detailed post real thought, he deserves a thoughtful reply to each aspect. That adds length to a post that was already long, so those who are already going "auugh" will likely want to simply skip over my response to jiminnm [[always an option with any of my posts!). Here's hoping jiminnm and any other readers are willing to devote real thought to my thoughtful reply and respond in kind in part or in full. Of course, cheap shots are always welcome too, since responding to them in kind in part or in full is just good clean fun.


Here goes jiminnm Response, Part I [[!!!):

Most commodity ETFs, including GLD [[the largest gold ETF), are set up as trusts... Most of the remaining commodity ETFs are partnerships, where the partnership owns the asset and buyers of shares are actually buying limited partnership units... Other ETFs, such as those specializing in indexes, dividends or specific sectors, are funds [[like a mutual fund) that own the underlying investments or other investments that are anticipated to produce a given return.

So, there's no shortage of entities to choose from for art finance innovation.

There would be many issues that needed to be addressed prior to Detroit even considering this scheme, not the least of which is who actually owns the actual piece of art being included [[the city, the donor who claims loan or a violation of a condition of donation, the Founders, or anyone else who claims an interest)...

The DIA's annual report* says: "Title to art objects purchased by or donated to the DIA is offered to the City’s Arts Department and title is 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."


So, if it's in the permanent collection, Detroit has title. Even if it says Founders Society Purchase, Bequest, Gift... whatever... if it has an accession number, the City owns it. Starting with the most financially-valuable paintings and working down, analysts could quickly determine whether the City's title has any restrictions. City of Detroit purchases, like Bruegel's Wedding Dance and Van Gogh's Self Portrait, obviously have no restrictions. Where billions of dollars worth of artworks are involved, the public has a right to know what restrictions exist. Put the art on the City's books with valuations and restrictions.


*http://www.dia.org/assets/pdf/annual-report-2010.pdf

...and whether this is appropriate action for an entity that had been entrusted with the possession and preservation of public art.

Again, Detroit is a city that happens to own a museum and art collection, and it's first responsibility is public safety and health, not the possession and preservation of public art. If it has enough resources -- resources that could include a multi-billion dollar Detroit Arts Endowment generating on the order of one, two or several hundred million dollars a year -- then it should be able to cover priorities all the way down to low ones like the possession and preservation of public art. One fact that could raise the priority for the possession and preservation of public art is the tremendous financial returns Detroit has gotten from that investment... if indeed Detroit can arrange to effectively use those financial returns to complement the cultural returns.

Assume the years of litigation result in a declaration of city ownership...

City ownership is a fact for every artwork with an accession number. Litigation on City of Detroit purchases certainly wouldn't get past the courthouse door, and courts would dismiss lawsuits on Founders Society purchases just about as quickly. With that, you're already up in the billions.

... that the officials that undertake the scheme somehow survive the community outrage and continue ...

Folks want public safety and health, street lighting, public transportation, clean parks and open recreation centers, etc., and this method [[and others) can give Detroit financial resources for those services. What community outrage? With my method, the artworks on display will stay on display, and the artworks in storage will go on display when the Detroit Arts Department chooses. Community gratitude is more like it. A multi-billion dollar endowment has transformative potential. A DIA millage... not so much.

...and that the city can demonstrate it will manage the money from this endeavor much better than it has managed previous finances...

Detroit's never had funds to manage on this scale. If this gets voters' attention -- and we agree it will -- they might surprise you and pick a Mayor and City Council that keeps crooks away from the multiple billions of dollars of investments that managers would make according to an endowment policy. Even if Detroit chooses politicians that don't -- a possibility I must admit given today's headlines -- then Detroit's residents will still have the new Financial Advisory Board and existing federal prosecutors endeavoring to provide them with a reliable backstop.

... {is it} worth it? I expect not.

The status quo certainly isn't working well for Detroit. Is examining alternatives too much to ask?

[Coaccession]

And, here goes jiminnm Response, Part II:

What, exactly, would the city be selling? Coaccession appears to be saying that title for a piece [[or a group of pieces somehow legally joined together) would be sold subject to a cultural easement retained by the city. That's not unprecedented, as property owners can subject their properties to a variety of easement restrictions [[such as conservation easements and air space limiting building heights).

Single pieces would generate more capital for the endowment because art mutual funds could enter the IPO and secondary markets, competitively offering groups of pieces based on their diverse analyses. Investors will value a choice of groups, including assembling single artworks into a group of their own choice, more than they'd value either choosing one single group of pieces or not.

But, as with any other property, the more restrictive the easement the greater the reduction in property value. A typical utility easement allows probably 99%+ of the prior activity to continue, but an easement for a high pressure gas transmission line severely restricts the property use within several hundred feet of the easement. So, where is the cultural easement on the scale of restrictions?

Some collectors would value owning cultural rights highly and discount heavily for a title burdened by a cultural easement. However, other collectors would value museum management of an artwork's cultural rights and pay a premium for that management. Netting these attitudes out in the market, I'd say cultural easements would create value for museums [[and cities that own them) by leaving them with a residual asset even after selling the burdened title for about what a full undivided unburdened title would have brought. Very good question, jiminnm... if more DYessers thought as analytically as you, these discussions would start generating more light than heat.

If rights of possession and display were retained by the Detroit, I see two immediate problems. First, most rights typically transferred with sale would remain with the city, so the value the city received for the interests transferred would be substantially less than 100% [[probably single digits).

Does Detroit need to possess an artwork when it's not exhibiting, researching or conserving it? For a city, is keeping that possession worth what possession could bring in the marketplace? Given a city's priorities -- public safety and health at the top -- the right choice for Detroit clearly is to give up possession and capital appreciation in return for billions of dollars in a Detroit Arts Endowment generating hundreds of millions of dollars in capital income AND continuing rights to exhibit, research and conserve each artwork.

Second, the city then opens itself to damage claims from the new owners [[as Dave points out). The more the city attempts to protect itself, the less it gets. In fact, if I was a purchaser subject to such restrictive terms, I could probably construct a legal argument that it isn't really a sale but is, in fact, a donation. So, we also can't discount the tax implication of this scheme.

But as [[I hope) you can see now, I've never described terms as restrictive as you hypothesized here. Of course, mileage will vary with other art finance innovations [[as would a DIA millage).

Transferring partial possession and display rights to an individual would increase the value of the transfer, and make it look more like a sale, but raise the associated risks of damage or loss, as well as more community outrage at what really starts looking like sale of of publicly owned art.

Again, it may be hard to generate much outrage when the City actually starts attending to a city's higher priorities and still has cultural easements on the artworks it uses to raise the endowment paying for those higher city priorities.

The only way I see this working will be for the city to transfer actual ownership to a separate entity. The terms of that transfer would, of course, be subject to negotiation. However, the more control the city attempts to retain, the less it would receive.

You should see that as a needless complication now as long as you think about the method I actually propose and not your own hypothesis. The City can sell possession directly to collectors and investors, retaining just the cultural control it needs by keeping its cultural easement.

At some point, any transferor will require a provision that all interests of ownership transfer under certain conditions. One might argue that scenario could occur in bankruptcy, and be correct. I would argue that it's possible but highly unlikely due to the ownership issue, the novelty of the action, possibly the public issue and possibly a timing issue resulting from the other issues.

In a bankruptcy liquidation, the collectors and investors would get the bulk of liquidation proceeds from owning possession, while the City's creditors would get the minor financial value of the cultural easement. If collectors and investors can work out a deal to buy an artwork's easement from the creditors, they ought to be able to create and own a full undivided title to that artwork. Collectors and investors would compete with other museums wanting to exhibit, research and conserve that artwork, though, and a bankruptcy court could give an edge to public access by letting a museum win the easement by matching the high bid from private parties, and could do so without harming the City's creditors.

I just don't see how this would be an effective tool for the city, even assuming it can clear all the related hurdles.

Here's hoping your understanding has improved enough to see my method as the effective tool it is. Other art finance innovations give up more cultural control, more proceeds for the endowment, or both, and Detroit's current method gives up all the proceeds for the endowment, earning maximum capital appreciation that it can't use to pay employees, contractors and bills, and zero capital income that it can use [[and it could certainly reinvest some of that capital income in the collection in the form of acquisitions, commissions and prizes -- art has actually been a tremendous investment for Detroit, although the community doesn't yet have the right perspective to reach a consensus on that fact).

{If} the city cannot survive financially without a sale of assets, then there should be community discussion as to whether or not art should be included in that sale.

Even if the community could do just fine, it should still discuss whether taking all its investment returns in capital appreciation on multiple billions of dollars in financial value makes more sense than taking all, most or some of those returns in capital income it can spend on priorities other than the possession and preservation of public art.


One thing I'm absolutely sure of… if Detroit had the financial value of the DIA collection in cash today, and it had to choose between using that multi-billion dollar cash balance to fund the entire range of municipal priorities or putting every last penny into the possession and preservation of public art, it would not put every last penny into the possession and preservation of public art [[which is where it has every last penny today). I would hope it would create an endowment to generate permanent income or pay down debt to eliminate interest expenses, and if that's the right thing to do with the cash, it's still the right thing to do even if the cash is already invested in the possession and preservation of public art [[which it happens to be).


The big advantage Detroit can get today from already possessing and preserving its public art is the fact that it can keep cultural easements on every last piece and still raise all that cash to endow its full range of priorities. It doesn't have to keep all its cash tied up in its art collection to enjoy all its art collection. If I'm right that the financial value of a cultural easement and a burdened titles exceeds the value of a full undivided title by the value of the cultural easement, it doesn't have to keep any of its cash tied up in its art collection to enjoy all its art collection... though it may want to keep some there, because art has been a great investment for Detroit, financially as well as culturally.


Thanks, jiminnm, for introducing more analytical rigor into the discussion. As you can see, I'm willing to wade through a lot of baseless posts to get to someone who actually gives these issues real thought. We may not agree even after this clarification of our differences, but at least you're defending a position rather than reacting purely defensively.

[Coaccession]

The Free Press says Detroit has: "Way too many derelict buildings, nowhere near enough cash to raze them*"

My comment practically writes itself: "Detroit owns the DIA art collection, so the City does have billions of dollars in highly-marketable assets. Dozens of paintings there are worth more than the cost of demolishing Detroit's most dangerous abandoned buildings, so selling any one of those could fix the problem. It's a matter of priorities. The Founders Society -- the city contractor that got control of the DIA from Dennis Archer by promising to fund DIA operations -- says that owning every last one of those paintings is more important than protecting the lives, safety and health of Detroit's schoolchildren. The Founders Society is now proposing a new Tri-County millage, not to demolish dangerous buildings as you might hope, but to fund DIA operations. Art finance innovations could let Detroit exhibit every single painting it has and still use their financial value to raise funds for demolition, but the Founders Society has its traditions placing the DIA art collection above Detroit's public safety and health, so they're not interested. The question is, does Detroit agree with the Founders Society's priorities?"


*http://www.freep.com/article/2012041...cash-raze-them

[Baselinepunk]

The Free Press says Detroit has: "Way too many derelict buildings, nowhere near enough cash to raze them*"

My comment practically writes itself: "Detroit owns the DIA art collection, so the City does have billions of dollars in highly-marketable assets. Dozens of paintings there are worth more than the cost of demolishing Detroit's most dangerous abandoned buildings, so selling any one of those could fix the problem. It's a matter of priorities. The Founders Society -- the city contractor that got control of the DIA from Dennis Archer by promising to fund DIA operations -- says that owning every last one of those paintings is more important than protecting the lives, safety and health of Detroit's schoolchildren. The Founders Society is now proposing a new Tri-County millage, not to demolish dangerous buildings as you might hope, but to fund DIA operations. Art finance innovations could let Detroit exhibit every single painting it has and still use their financial value to raise funds for demolition, but the Founders Society has its traditions placing the DIA art collection above Detroit's public safety and health, so they're not interested. The question is, does Detroit agree with the Founders Society's priorities?"


*http://www.freep.com/article/2012041...cash-raze-them

Rest well, Conaccession. The City of Detroit will get through this without having to drink your snake oil.

Cheers!

[Mikeg]

Here's the rub:
"A lot of people I know who work in the factories would not have an interest in this," said Roland Fraschetti, a Republican from St. Clair Shores."

First of all, that's a pretty broad generalization. My parents were as working class as they come and we weren't just knuckle-dragging mouth-breathers who threw rocks at each other for fun. Sure I remember some pretty shabby "art" hanging on the walls of our house but we went to the DIA too. And the Science Center.

Secondly, way to think long-term. This isn't 1985. Metro Detroit isn't just autoworkers and the occasional plumber anymore. If we want to attract/retain people who aren't factory workers [[not exactly a growth industry there) then we need to invest in our cultural institutions at least on this minimal level. Those factory worker buddies of yours aren't going to be around forever.

Even at the local level the Republicans are the biggest bunch of dumbfucks......

DIA tax may go on ballot
By Chad Selweski
Macomb Daily
April 21, 2012

Faced with a crowd of local Detroit Institute of Arts supporters, Macomb County commissioners on Friday reversed a previous vote and agreed to place a DIA tax on the August primary ballot.

After two hours of public comments dominated by supporters of the ballot proposal, the Board of Commissioners’ Planning and Economic Development Committee supported the tax plan. Democratic Commissioner Bob Smith of Clinton Township determined the outcome, switching his vote to “yes".........

The final approval of the DIA ballot proposal will take place at 6 p.m. on Tuesday at a special meeting of the full Board of Commissioners......

So the obstacle to getting this out of committee for a vote by the full Board and onto the August Primary ballot turns out to be one of those "knuckle-dragging mouth-breather" Democrats on the Board of Commissioners!

Why don't you all save your Macomb County and Republican bashing on this issue until after the August Primary Election?

[Gistok]

So the obstacle to getting this out of committee for a vote by the full Board and onto the August Primary ballot turns out to be one of those "knuckle-dragging mouth-breather" Democrats on the Board of Commissioners!

Why don't you all save your Macomb County and Republican bashing on this issue until after the August Primary Election?

Well I guess that means he's no longer a "knuckle dragger"...

But speaking of 'knuckle-draggers"....
http://rcnmc.com/2012/04/tax-alert-d...commissioners/

[poobert]

Well I guess that means he's no longer a "knuckle dragger"...

But speaking of 'knuckle-draggers"....
http://rcnmc.com/2012/04/tax-alert-d...commissioners/

Yuck. What a vile platform. I stand by all my Republican-bashing. Give them some credit; they've earned it.

[Pam]

Yuck. What a vile platform. I stand by all my Republican-bashing. Give them some credit; they've earned it.

They still get credit for the boneheaded "factory workers aren't interested" comment.

[poobert]

They still get credit for the boneheaded "factory workers aren't interested" comment.

For a good reminder of local Republicans' saintly motives, also please see the "
Gary Peters vs Hansen Clarke vs Brenda Lawrence vs Mary Waters"

thread, which showcases their selfless work creating a district that lumps Southwest Detroit, Grosse Pointe, Sylvan Lake, Hamtramck, Farmington Hills, and Pontiac in the same district.