The NY Times is reporting that Christi's has put a value of $452-$866 million on portions of the Detroit Institute of Arts collections. The appraisal seems low as there was earlier talk of a $2.5 billion value on only 38 important works.
So why the difference, the article states Christie's appraisal scope was limited to works purchased only by the city and not donated works, as it would be easier to sell. The appraisal covers only 5% of the collection, by 75% of the appraised value is based on only 11 pieces. Some of the creditors of the city are not pleased with the valuation. It will be interesting to see more information and the actual report. Past reports have stated since the DIA is publicly owned, the appraisal can be released.
The NY Times reports
Source: The NY TimesThe heart of the world-class collection of the Detroit Institute of Arts would raise somewhere between $452 million and $866 million if sold to help the City of Detroit dig its way out of bankruptcy, Christie’s said Wednesday, announcing the results of a highly anticipated appraisal.
Experts from the auction house have scoured a significant portion of the collection for months now at the behest of Detroit’s emergency manager, Kevyn D. Orr, who is pushing the museum to help the city contend with more than $18 billion in debt. Some of Detroit’s largest creditors have contended in court that the museum’s collection is not an essential city asset and should be sold to help pay those who are owed money.
Creditors will undoubtedly see the estimate as low; art experts enlisted by The Detroit Free Press this year to conduct a quick, unofficial appraisal had said that 38 of the museum’s masterpieces alone would be worth at least $2.5 billion in the current art market.
Christie’s examination was limited to works that were bought entirely or in part with city funds, because those works could be sold more easily than donated works, for example, whose sale could generate legal challenges. So the appraisal covers only a small part of the collection in terms of numbers — less than 5 percent of the museum’s 66,000 works — but many of the works are among the most important in the collection, by artists like Bruegel, Matisse and van Gogh.
The auction house determined the fair market value of the works, comparing them to similar ones that have sold recently. But Christie’s emphasized that auction estimates for the Detroit works — which auction houses use “to attract maximum bidding interest” — could be far different; such estimates would most likely be higher.
While Christie’s did not release estimates for individual works, it did note that 11 works — which it did not name — accounted for 75 percent of the total estimate in its report.
The appraisal has been a highly contentious process as Detroit’s bankruptcy case has unfolded. No other American museum the size of the institute has ever faced such a threat to the integrity of its collection. Institute officials have complained not only about the intrusion of appraisers but have said that putting price tags on works in a public collection is deeply troubling and makes selling art seem more palatable in a distressed, financially struggling city.
The museum’s director, Graham W. J. Beal, has said that any sale of art will most likely lead to the museum’s dissolution; donors would stop giving, and the museum will lose a crucial tax stream established last year by surrounding counties to provide the museum with badly needed operating revenue.
In its report, Christie’s suggests ways the museum might be able to use its collection to raise money without having to sell works. Among them were proposals to enter into a partnership with another museum, which would lease Detroit works on a long-term basis; to create a trust and sell shares in works to several partners, who could borrow works for periods of time; and to sell works on the condition that they be lent permanently to the museum.
On Tuesday, after Judge Steven W. Rhodes ruled that Detroit was eligible for federal bankruptcy protection, Mr. Orr said that the Christie’s estimate would probably be lower than many people expected, but he defended the findings. “The creditors are welcome to take whatever position they want,” he told The Free Press’s editorial board, adding: “We think the estimates are pretty good. We think they’re accurate. These are people who are in this business. They understand it intimately.”
On Wednesday, the museum declined to comment specifically on the appraisal but said in a statement, “If the collection is jeopardized, the D.I.A. remains committed to taking appropriate action to preserve this cultural birthright for future generations.”
A spokesman for the Financial Guaranty Insurance Company, one of Detroit’s largest creditors, said the appraisal process was flawed. “Rather than rely on a sole opinion and closed-door process,” the company said in a statement, it urged the creation of “a committee made up of the city and all major creditor constituencies, using a fair and transparent process that considers a wide range of potential options” for valuing the art.