DETROIT — Art museums treat estimated values of their art like state secrets. In fact, major museums such as the Detroit Institute of Arts don’t even know precisely what all of their multimillion-dollar treasures are worth.
That is about to change in Detroit.
When officials from the New York-based Christie’s auction house finish formally appraising city-owned works at the DIA this fall, the results will open an unprecedented public window into the market value of thousands of artworks at a top American museum. The enormity of the final tally, which is expected to be in the billions, promises to add urgency to the debate over whether the city should sell art to help pay its bills in municipal bankruptcy.
The Detroit Free Press has learned previously undisclosed details of Christie’s contract with the city, including that up to 3,500 works could be appraised. Among those are 300 on view as part of the permanent display, including iconic works by van Gogh, Matisse, Rembrandt, Bruegel and others.
Christie’s will only appraise works bought directly by the city that are unencumbered by donated funds or other covenants that cloud clear legal title, said Bill Nowling, spokesman for Detroit emergency manager Kevyn Orr. The appraisal will unfold in phases. Officials will start with the art on view before evaluating art in storage with an estimated market value of $50,000 or more and, finally, art in storage presumed to be worth less than $50,000.
Christie’s final report will include itemized appraisals for art worth at least $50,000; an aggregate value will be given for work worth less. Nowling said the contract does not give preferential consideration to Christie’s to handle a sale of art down the road. “That’s a different discussion — if we even get there,” he said.
A typical formal appraisal considers detailed research into a work’s quality, historical importance, condition, provenance, comparable sales at public auction and typically hush-hush private transactions between dealers and collectors. A spokesman for Christie’s, one of the world’s two leading fine-art auction houses along with Sotheby’s, said that the precise number of works appraised will be decided with input from the DIA. An initial meeting between officials at the DIA and Christie’s isn’t expected until after Labor Day. Final results are due in October or November. The city is paying Christie’s a $200,000 fee.
Some museum supporters are concerned that the details of the appraisal, which will be made public as part of court filings, could increase public pressure to sell works to help satisfy the city’s creditors. The list of DIA works and their eye-popping values is certain to make headlines far beyond the art world.
“This is like the weighing of souls,” said Maxwell Anderson, director of the Dallas Museum of Art. “This is biblical stuff, not the approximations that insurance companies look for. It’s extremely problematic for all museums, because it alters the public’s perception of artworks from being ciphers of public heritage of transcendent value, to objects for sale to pay other people’s debts.”
Orr hired Christie’s to evaluate DIA art as part of the city’s responsibility in federal court to provide a detailed accounting of all city assets. The possible sale of art has been one of the most controversial aspects of Detroit’s financial crisis.
The big mystery of the unfolding saga is just how much the art is worth. The Free Press consulted art dealers and auction records to estimate the market value of 38 key works at about $2.5 billion, with individual pieces such as Matisse’s “The Window” at $150 million and van Gogh’s “Self Portrait” at $60 million.
However, Todd Levin, a Detroit-born art adviser and director of the Levin Art Group in New York, said the value of the museum’s entire 60,000-piece collection would have to be significantly higher — “at least in the low to mid-11 figures,” he said.
That would mean a value of at least $10 billion to $20 billion.
Most of the works Christie’s will appraise were bought between 1920 and 1930, after the DIA became a city department in 1919. Flush with cash, a booming Detroit went on a buying spree, landing European masterpieces by the score. The party ended with the Great Depression, and city-funded acquisitions stopped completely in 1955.
Orr estimates that the city owes $18 billion in debt and long-term liabilities to bondholders, pensioners and others. Creditors are pushing for a sale of art in the hopes of realizing more than the 10-20 cents on the dollar Orr is offering. Orr has said there is no plan to sell art, and Michigan’s attorney general has issued an opinion stating the art can’t be sold because it is held in the public trust.
However, legal protection for the art remains unclear. The judge in the case cannot compel the sale of assets, but pressure can be brought by the judge or creditors in ways that could still result in a sale. The DIA has vowed to fight any move against the art in court.
Museums don’t do formal appraisals because they’re irrelevant to nonprofit, education-based institutions. Federal accounting rules exempt them from listing art on their balance sheets as assets. Museums do sell art, but only under specific conditions allowed by professional standards: inferior quality, duplication within the collection, major shifts in mission. Proceeds can be used only to buy other art.
A museum’s informal insurance evaluations are not reliable guides to market worth. The DIA, for example, roughly estimates a relative handful of works in its most valuable galleries for guidance in making insurance decisions, said Vice President and Chief Financial Officer Rob Bowen. The DIA carries a blanket policy of $250 million maximum per occurrence at the museum. Coverage also includes up to $75 million for art in transit, such as when it’s lent to other museums.
DIA curators and registrars do create estimates for works being loaned. Executive Vice President Annmarie Erickson declined to release details about estimates of specific DIA works.
The DIA does not insure individual works, though some museums do carry such coverage in addition to a blanket policy. No museum could afford to insure its entire collection. Bowen said the DIA’s insurance broker has told him that the DIA’s protection is consistent with that of other museums of its stature, though some carry considerably more insurance and others less. The DIA pays $112,500 annually in art insurance premiums, less than 1 percent of its annual budget.
DIA officials are uncomfortable but resigned to the fact that the monetary values of so many of its finest works will be so nakedly revealed. “Our primary job is to protect and steward the collection,” said Erickson. “We don’t put monetary values on the art because that isn’t what museums do.”
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