Orr laying the groundwork for sale of DIA art

[Honky Tonk]

I don't expect and individual "stake" but if you take 10 multiplied by the number of households in each county, city, etc. it becomes a relevant figure.

Let me ask you this, who asked me if I would like to spend a good part of my tax dollars co-funding Ilitch's new stadium? What do I get for the money that went toward's that? A free hockey game? A slice of Pizza-Pizza? Zippo, nada, nic. And yet I'd love to know what percentage went to fund this clown's empire. But I never will be able to find out, will I? But that's Ok, it's hockey!

[sumas]

A couple of points:

Under no circumstances can a judge order the sale of assets in a Chapter 9. He can grant relief under the plan of adjustment, or deny relief if such relief is inequitable. Unless Orr proposes selling art, it can't be sold. Neither creditors nor the federal judge can order it.

Why, then, is Orr appraising the art? My guess is that he will be heading off the argument that the city is sitting on billions of dollars of assets without paying creditors. I would imagine the art would have to be appraised subject to any restrictions that exist--an owner can sell no more than it has. So if the piece of art is "on loan" or has a restricted use, then the valuation would be $0. Bankruptcy courts like having an expert provide them with indicators of value, not the parties.

I too thank you for valuable insight. Frankly I am not particularly concerned about the bankruptcy. We even have an area contingency plan if garbage doesn't get picked up. Police and EMS continue to be fine for serious issues. My concerns are and continue to be our recreation and cultural access especially for our kids.

[bailey]

Pay attention to what Gene Gargaro, Chairman of the Board of Directors for the Detroit Institute of Arts has to say and read between the lines a bit. This is a wild conjecture, but based on what he has said, I get the feeling he is lining up his ducks for a purchase of the building and the collection by the Founder's Society or some other such Detroit-based charitable entity to own and operate the DIA.

Which is what should have happened decades ago.... and something I think Orr was telegraphing needs to happen when this kerfuffle began. I assume the appraisal needs to happen to get a dollar number on the collection so that it doesn't look like the city gave an asset away. This can't be one of those situations where the city deeds it away for a $1.

The issue that stands out to me isn't the ownership of the collection of donated art, but status of the significant pieces that were purchased with actual City of Detroit dollars. THAT, to the city's creditors, seems an awful like the someone pleading poverty with the paid for Ferrarri sitting in the driveway.

[Zug]

Being a regular member, and since it passed, I've seen people in there that I've never seen, nor would they have an incling to visit. And you know what? I've yet to hear anyone say "this sucks!" Take advantage of that budget breaking $12 you've spent, and come down and see for yourself. Come visit for 10 minutes or so......

I work in Midtown, and I can honestly say that before the millage I had not thought about going to the DIA in years. Since it's been free, I've gone 3-4 times a month during lunch breaks. I know I'm fortunate enough to work near it...but it really is a bargain. It also makes going there more casual...as before when I would go, I almost felt obligated to make it an hours-long visit. Now I can see what I can in an hour, knowing I could always go back the next day if I really wanted without paying again.

I know not everyone finds value in going to an art museum...and don't appreciate being forced to support a museum. But I do think that this is a millage where anyone paying for it can easily get more in return than what they put in.

[George Cassidy]

They could sell everything out to the walls and it wouldn't make a dent in the financial shortfall. What is the point, some kind of grand gesture?

[EASTSIDE CAT 67-83]

She's also bringing back swim-mobiles and book-mobiles to address the real problems of Detroit.

Honky Tonk
What a great memory you brought back to me...the Swim Mobiles, I remember back in the early 70's there was one hooked up to the fire hydrant on the corner of Manistique and Essex just across the street from the corner market. There were good times had by all swimming in all that pee and Baby Ruth filled water.....tee hee hee, actually I added the Baby Ruth thing with artistic license.

[Honky Tonk]

Honky Tonk
What a great memory you brought back to me...the Swim Mobiles, I remember back in the early 70's there was one hooked up to the fire hydrant on the corner of Manistique and Essex just across the street from the corner market. There were good times had by all swimming in all that pee and Baby Ruth filled water.....tee hee hee, actually I added the Baby Ruth thing with artistic license.

Another Caddy Shack fan.....

[TexasT]

I work in Midtown, and I can honestly say that before the millage I had not thought about going to the DIA in years. Since it's been free, I've gone 3-4 times a month during lunch breaks. I know I'm fortunate enough to work near it...but it really is a bargain. It also makes going there more casual...as before when I would go, I almost felt obligated to make it an hours-long visit. Now I can see what I can in an hour, knowing I could always go back the next day if I really wanted without paying again.

I know not everyone finds value in going to an art museum...and don't appreciate being forced to support a museum. But I do think that this is a millage where anyone paying for it can easily get more in return than what they put in.

Same here.

I've also noticed a lot of families, which is good to see.

[Hypestyles]

why are Patterson and Hackel carping already about withholding tax revenues from DIA depending on how the bankruptcy goes? that's not nice at all.

[mwilbert]

why are Patterson and Hackel carping already about withholding tax revenues from DIA depending on how the bankruptcy goes? that's not nice at all.

Well, if one wanted to be positive about it, perhaps they were trying to indicate the greater regional interest in maintaining the collection. More likely they were just being their usual grandstanding selves.

[BankruptcyGuy]

Based on his name, it just may be Kevin Orr

Laughed out loud and almost woke the kids. Thanks--happy to clear up misunderstandings. What is disappointing is that Detroiters are smarter and tougher than their politicians and news media would lead you to believe. We can unwind difficult concepts and handle tough decisions. We just need the truth.

[Gistok]

Eveyone I know in Los Angeles already believes the collection is on its way to the Getty.

The Getty Trust [[owner of the Getty Museum) is likely worth over $6 billion... making the Getty the richest museum in the world.

[GPCharles]

Per their 2011 Form 990, the J. Paul Getty Trust has assets of $8,913,772,900.

[Baselinepunk]

"What is disappointing is that Detroiters are smarter and tougher than their politicians and news media would lead you to believe. We can unwind difficult concepts and handle tough decisions. We just need the truth."

+1 ! !

For the most part the media in this town, save a couple of outlets / reporters, blows massive chunks and are basically just a bunch of ass-kissers.

It's ....... absolutely ..... friggin' ........ disgusting ....

"Per their 2011 Form 990, the J. Paul Getty Trust has assets of $8,913,772,900"

I could be wrong but I think that value of the trust, and what is available to spend from the trust, are going to be two different things.


Question for the group [[perhaps this needs it's own thread) --

I hear a lot of talk about the DIA and its assets, and how every city asset must be accounted for. Perhaps I'm not paying close enough attention but I haven't heard a thing about appraisers going into the Charles Wright for a look.

Does anyone have a link to the stink about that by chance?

[professorscott]

I hear a lot of talk about the DIA and its assets, and how every city asset must be accounted for. Perhaps I'm not paying close enough attention but I haven't heard a thing about appraisers going into the Charles Wright for a look.

Difference in scale. There are hundreds of City owned facilities that won't be appraised because it won't make much of a difference in the overall asset value of Detroit. The DIA's collection is likely to be worth anywhere from hundreds of millions to a couple billion dollars; nothing else the City has is going to come anywhere close to that kind of amount.

[BankruptcyGuy]

Difference in scale. There are hundreds of City owned facilities that won't be appraised because it won't make much of a difference in the overall asset value of Detroit. The DIA's collection is likely to be worth anywhere from hundreds of millions to a couple billion dollars; nothing else the City has is going to come anywhere close to that kind of amount.

The City will likely be required, as a part of its plan, to value its assets. The creditors have an opportunity to challenge the valuation. It's unlikely that creditors will object to values of assets of city buildings, etc. Artwork? They may. Belle Isle? Maybe. Don't be surprised if that is appraised as well. This is all groundwork for a complicated plan negotiation process.

[Wesley Mouch]

Difference in scale. There are hundreds of City owned facilities that won't be appraised because it won't make much of a difference in the overall asset value of Detroit. The DIA's collection is likely to be worth anywhere from hundreds of millions to a couple billion dollars; nothing else the City has is going to come anywhere close to that kind of amount.

Scale is of course the big factor -- but the other factor is knowledge required to value an asset. If the city has good records on Wright, and the valuations aren't as specialized they may go with what the city books already show.

Businesses know what their assets are worth. Depreciation deductions are based on asset value. I'd think that municipalities also know their assets. But the DIA is huge and not a typical asset.

[mwilbert]

Businesses know what their assets are worth. Depreciation deductions are based on asset value.

No they aren't. Depreciation is based on cost. Do you really think GM knows what the Poletown plant is worth? Or Ford knows what the Rouge complex is worth? They should know what the book value is [[probably not much, as one would expect that they have been pretty fully depreciated by now) but that isn't a usable value for any other purpose.

[Wesley Mouch]

No they aren't. Depreciation is based on cost. Do you really think GM knows what the Poletown plant is worth? Or Ford knows what the Rouge complex is worth? They should know what the book value is [[probably not much, as one would expect that they have been pretty fully depreciated by now) but that isn't a usable value for any other purpose.

Sure you're right there -- although I think some assets are revalued or written down -- but I'm no expert. My point was that the city should already know what they own, and at least have a book value to start from. Most assets are more predictable -- some like the DIA are not. But good point.

[professorscott]

No they aren't. Depreciation is based on cost. Do you really think GM knows what the Poletown plant is worth? Or Ford knows what the Rouge complex is worth? They should know what the book value is [[probably not much, as one would expect that they have been pretty fully depreciated by now) but that isn't a usable value for any other purpose.

Further complicating things, the value of assets the City will need to estimate is the value to be realized in a sale. Some assets are de facto safe and won't be included; Mr. Orr will not suggest that the City sell off its fire trucks and Hon. Mr. Rhodes would not expect him to. Other assets are going to be difficult to evaluate because it's hard to imagine anyone buying, for instance, the Gilbert bus terminal or a long-shuttered library building in a city where real estate has almost no inherent value outside of a few areas. Other types of valuation, such as the depreciation one uses for tax purposes, just don't matter in this case.

So what I suspect is going to happen is that Mr. Orr's team will focus on assets with two particular characteristics: they are relatively liquid and can be sold without affecting the core, required functions of municipal government, and they might generate enough money in a sale to make a dent in what is owed to creditors.

With respect to the DIA collection, I think it is likely that the team from Christie's will find that Detroit's ownership of many pieces is restricted such that they cannot be sold at all, but other pieces are not restricted in this way. Then Mr. Orr, to salve the wounded creditors, may propose selling off some of the pieces that are not commonly displayed [[the DIA owns a great deal more than the public can see at any one time).

Whether Mr. Patterson and Mr. Hackel choose to keep blathering about the heartbreak their poor constituents must endure in such a situation is anyone's guess.

All of this, naturally, is supposition, but seems to me a plausible scenario given circumstances.

[Novine]

"With respect to the DIA collection, I think it is likely that the team from Christie's will find that Detroit's ownership of many pieces is restricted such that they cannot be sold at all, but other pieces are not restricted in this way."

How is this supposed to happen? Are the appraisers being given to the pieces not on display? Or the paper trail for all of these works showing how each piece was acquired? Sounds unlikely to me.

[Gistok]

They need to send Pieter Bruegel the Elder's Wedding Dance to Europe for a 5 year loan....

It's probably their most valuable painting [[he was the greatest painter of the 16th Century Netherlands)... of the 45 Bruegels known worldwide... only 4 are in the USA [[one in NYC MMOA, one in NYC Frick, one in San Diego, one in Detroit).

And the Detroit Bruegel is one of his best works.

... oh... and it's a 1930 "City of Detroit" purchase...

[Brock7]

Wasn't there a DaVinci, once upon a time? What happened to it? Scrappers? Or is memory just playing tricks on me?

[Gistok]

Wasn't there a DaVinci, once upon a time? What happened to it? Scrappers? Or is memory just playing tricks on me?

No Da Vinci [[except maybe engravings) was ever in the DIA collection.

[softailrider]

[QUOTE=Gistok;398074]They need to send Pieter Bruegel the Elder's Wedding Dance to Europe for a 5 year loan....

It's probably their most valuable painting [[he was the greatest painter of the 16th Century Netherlands)... of the 45 Bruegels known worldwide... only 4 are in the USA [[one in NYC MMOA, one in NYC Frick, one in San Diego, one in Detroit).

And the Detroit Bruegel is one of his best works.

... oh... and it's a 1930 "City of Detroit" purchase... [/QUOTE