(WXYZ) – Emergency Manager Kevyn Orr is getting appraisals on 60,000 works of art at the Detroit Institute of Arts and other Detroit City assets as he is about to move into negotiations with creditors.
His own financial report shows Detroit has $15 billion in long term debt. The value of the assets could also be in the billions.
The President and CEO of the DIA, Graham Beal tells 7 Action News “We will do what’s necessary to protect them whatever that is.”
The DIA has already hired a New York Bankruptcy attorney, but Graham says a Chapter 9 process is an unknown especially on this scale for the City of Detroit and the DIA.
“This has never happened before, ” Beal says.
It is already getting attention around the world, not just the art world. A Detroit bankruptcy would be the largest in U.S. history.
A spokesman for the Emergency Manager said in a statement there are no plans to sell any assets now.
“The emergency manager has alerted certain assets, including the DIA, that they might face exposure to creditors should the city be forced to seek Chapter 9 bankruptcy protection.”
What those other assets are is not clear, but could be Detroit libraries, Belle Isle, the water department and The Manoogian Mansion, home of the Detroit Mayor.
Emergency Manager asks, how much is Detroit’s art at the DIA worth?
Detroit (WXYZ) - How much is the Detroit owned art at the Detroit Institute of Arts worth? It is a loaded question. The reason? It is being asked by Detroit’s Emergency Manager Kevyn Orr.
Many in the metro-Detroit and the art world are afraid of the appraisal he has called for. They do not want the collection sold to cover the city’s $15 billion debt.
Right now no one knows exactly how much the collection is worth. A rough estimate is approximately $3 billion. It is somewhat taboo to appraise publicly owned art, as there is the belief it should not be put on the market.
Orr has said he does not want to sell the collection. He is asking for the appraisal because he wants to defend it and know what the city is working with. Whether you like it or not, the art is an asset of the city. The city may be facing a bankruptcy filing. Creditors may call on the city to sell its assets.
Many works of art at the DIA were donated by collectors. They may have restrictions that prevent a sale. That information is important for the city to have in hand.
The DIA meantime isn’t just sitting by while these questions are asked. It has hired a bankruptcy lawyer to advise it on how to protect the collection.
A statement released by the emergency manager’s spokesperson, Bill Nowling said, “While there is no plan to sell any assets, it is possible that the city’s creditors could demand the city use its assets to settle its debts. The emergency manager has alerted certain assets, including the DIA, that they might face exposure to creditors should the city be forced to seek Chapter 9 bankruptcy protection. This is a precautionary measure.”
DIA’s art collection at risk amid Detroit’s financial woes
DETROIT (WJBK) – Officials say the Detroit Institute of Arts’ collection could be sold to help satisfy creditors if the financially troubled city of Detroit seeks bankruptcy protection.
Bill Nowling, a spokesman for state-appointed emergency manager says Kevyn Orr, says Orr is considering whether the collection should be considered city assets that could be sold to cover Detroit’s long-term debt. The debt is estimated at more than $14 billion.
“As Kevyn Orr has said many times, he is considering many different options to help rectify Detroit’s fiscal crisis,” said Nowling. “What I can say is that there is no formal plan on the table to sell any Detroit asset, the DIA or otherwise.
The museum says it’s hired a bankruptcy attorney to suggest ways to protect the collection from possible losses. In a statement, the DIA says it “and the city hold the museum’s art collection in trust for the public” and that “the city cannot sell art to generate funds for any purpose other than to enhance the collection.”
So how much is the museum’s collection worth? According to a report from Crain’s Detroit Business, a city report from 2004, when the DIA was still a city department, valued the collection at more than $1 billion.
The city owns the Detroit Institute of Arts’ building and collection, while daily operations are overseen by a nonprofit. The scope of Orr’s power as an emergency manager to sell the collection or any other major assets, such as the city’s water department, likely would be tested in court.
“I am not shocked by anything that occurs in this city lately,” said Annmarie Erickson, Executive Vice President at the DIA. “I think all of us are a little battle worn over what has been happening in the city of Detroit.”
Republican Gov. Rick Snyder in March appointed Orr as emergency manager, giving Orr the final say on Detroit’s fiscal matters. The city’s budget deficit could reach $380 million by July 1, it could run out of cash before the end of the year, and bankruptcy hasn’t been ruled out.
Under a Chapter 9 bankruptcy filing, neither a judge nor creditors can force the city to liquidate its assets, but bankruptcy experts tell the Free Press that a judge and creditors could push for a sale. Some creditors have already asked Orr whether the DIA collection is “on the table,” Nowling said.
Billionaire developer A. Alfred Taubman, a patron of the museum, said that “it would be a crime” to sell any of the DIA’s collection to satisfy city creditors.
“I’m sure Mr. Orr, once he thinks about it, will certainly not choose that as one of the assets,” Taubman said. “It’s not just an asset of Detroit. It’s an asset of the country.”
New York developers have eye to buy Belle Isle
Sale is question mark, but real estate market is hot
DETROIT – Detroit’s Belle Isle is not for sale, but New York developers are considering a plan to make a major investment in the island park if they could buy it.
Hot on the heels of reports that the art collection at the Detroit Institute of Arts might be targeted for sale if the financially-strapped city is forced into bankruptcy, sources are reporting that developers are working to put together a plan for condos and hotels on Belle Isle, if the city would sell it.
Real estate expert Jeff Hillman said a sale might be possible, because prices remain low while interest in Detroit as an investment is high. “There’s an unprecedented amount of development going on, new development,” Hillman said.
Sources indicate the New York developers considering Belle Isle have already made investments in real estate in downtown Detroit.
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