Detroit Institute of Arts Update

The Art Newspaper is reporting the Detroit Institute of Arts (DIA) is close to fulfilling its $100 million goal/obligation agreed to under the Detroit bankruptcy Grand Bargain.  In early Nov, a banruptcy judge approved the Grand Bargain of contribution of $816 million to support Detroit's pension obligations. Within that $816 million was a $100 million contribution from the DIA.

The Art Newspaper is now reporting the DIA is at 90% of its goal with pledges of $87 million. It is nice to see this sad chapter finally coming to an end, but it has certainly been an interesting topic, and I believe we as appraisers have learned much from the process.

The Art Newspaper reports
Less than two weeks after a federal judge approved Detroit’s historic bankruptcy plan, the Detroit Institute of Arts (DIA) has raised nearly 90% of its $100m goal to support the city’s regeneration. The museum has secured $87m in pledges toward the so-called Grand Bargain, an $816m scheme to support Detroit’s pensions and permanently transfer ownership of the DIA’s city-owned art to the museum.

The day before the judge’s verdict on 7 November, the DIA announced that 21 Japanese businesses with branches in Detroit, including Mitsubishi and Panasonic, had pledged $2.2m. Three-quarters of the money will go toward DIA’s commitment to the Grand Bargain, while the remaining 25% will help fund a long-planned but previously stalled reinstallation of the museum’s Japanese collection in a new gallery.

The majority of the museum’s grand bargain contributions come from the auto industry, which has strong roots in Detroit, and other local businesses. The Chrysler Group, Ford and General Motors pledged a combined $26m; the auto racing champion Roger Penske and his transportation services company, the Penske Corporation, promised $10m; Toyota Motor North America plans to give $1m. Arts organisations including the Andrew Mellon Foundation and the J. Paul Getty Trust also contributed $13m.

The DIA’s $100m pledge represents only a fraction of the Grand Bargain’s $816m total, which also relies on nine-figure donations from the state of Michigan and some of the largest foundations in the US, all due to be doled out over the next 20 years. But the DIA’s contribution was a linchpin of the entire deal. Michigan’s governor Rick Snyder agreed to approve the state’s $350m contribution only if the DIA promised to donate $100m to the cause, according to the Detroit Free Press. “DIA had to save themselves,” Kevyn Orr, the state-appointed emergency manager for the city, told the Wall Street Journal.

Long after the DIA reaches its goal, the museum will retain a permanent reminder of the Grand Bargain in the form of a cardboard doodle. In August 2013, the federally appointed mediator for Detroit’s bankruptcy, Gerald Rosen, was working out how the city could possibly support its pensions and dig itself out of debt without selling the DIA’s collection. He wrote “art” on the back of a legal pad, circled it, and then drew arrows to the words “state” and “pensions”. The diagram, which is now considered the beginnings of the Grand Bargain, will soon be hung in the museum’s offices. 
Source: The Art Newspaper 

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