In Detroit bankruptcy, what will happen to DIA?

[Coaccession]

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.

"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.

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?

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.

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.

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!

[Baselinepunk]

What other repositories are using this concept?

[1953]

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.

[Coaccession]

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.

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

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.

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.

[Coaccession]

What other repositories are using this concept?

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).

[Baselinepunk]

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?

[Baselinepunk]

"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.

[Coaccession]

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

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

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?

What is your association to him...?

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.

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

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!

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?

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.

[Coaccession]

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

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.

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

It's a new idea. Call the cops.

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

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?

[Baselinepunk]

"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.

[Baselinepunk]

"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?

[Coaccession]

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.

[Novine]

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

[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.

[mwilbert]

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

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.

[Lowell]

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

[Coaccession]

{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?

[Gistok]

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.

[Coaccession]

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.

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):

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.

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.

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.

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:

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.

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.

[Coaccession]

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

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...

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.

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!

[Coaccession]

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.

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.

[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.

[East Detroit]

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?

[Coaccession]

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

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.

[Gistok]

"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.

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...