In Detroit bankruptcy, what will happen to DIA?

[Coaccession]

Is the museum owned by Detroit in the sense that they own the building or do they actually own the institution. Even if they own the institution I am sure the museum is funded through private donations and if that is the case I am not sure if Detroit would have the legal right to sell off the museums contents.

Here's the research, Maria, that brought me to DetroitYes in the first place:

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:

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.

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:

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.

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.

So, Maria, cman710 quotes the DIA's report showing that the museum is owned by Detroit both in the sense that they own the building and that they actually own the institution. Even though the museum is currently funded through private donations, Detroit owns the institution because it has funded it in the past and the Michigan Supreme Court wouldn't let Detroit fund it at all unless Detroit owned it [[Jeffrey Abt wrote the book on this history). I am sure Detroit has the legal right to sell off the museum's contents, which it could call surplus personal property if it wanted to bring in Sotheby's or Christie's on Monday.

If Detroit can sell off the contents with call to an auction house, an Emergency Financial Manager or a bankruptcy judge would have even lower barriers to selling the contents. Given that an EFM appointment triggers a payment designed to trigger bankruptcy, Detroit seems very likely to go into bankruptcy with this latest round of fiscal Russian roulette. That's a real shame since Detroit's DIA collection actually makes the City solvent, if illiquid. Detroit could use its solvency to head off bankruptcy and avoid having its art collection liquidated wholesale to cover financial obligations accelerated by bankruptcy.

There are several ways Detroit could use the financial value in its DIA collection to head off bankruptcy. Some are more sensitive to Detroit's cultural legacy than others, but all of them are an improvement over bankruptcy. The saddest thing to see, even sadder than the Bing administration claiming that it doesn't have the assets to meet its fiscal obligations, is the Founders Society trying to get a regional tax to fund their DIA operations when they're doing nothing to head off a Detroit bankruptcy that will leave the DIA as pretty much an empty shell.