CHICAGO - Any sale of the art in the city-owned Detroit Institute of Arts would devastate the museum, a top museum official and an art finance consultant testified Thursday at a trial on the city's bankruptcy exit plan.
"We would be persona non grata in the museum world," said Annmarie Erickson, chief operating officer of the DIA.
Detroit's prized art collection has played a central role in its high-profile bankruptcy case. The city's plan of debt adjustment depends on a 'grand bargain' that raises a stated $800 million of public and private funds for the city's pensioners, in exchange for shifting the art into an independent trust that the city cannot touch. Some creditors have objected to the bargain, saying it favors pensioners over other creditors and dramatically undervalues the art collection.
But any move to sell the art would not only ruin the DIA's reputation, but it would also mean the end of a crucial tri-county tax millage the facility depends on for the bulk of its budget, Erickson testified at the trial before U.S. Bankruptcy Judge Steven Rhodes.
Officials from both Macomb and Oakland Counties have said they would move to rescind the millage, enacted in 2011, if the museum tried to sell its art.
"The passing of the millage was the first real tangible statement about regionalism," Erickson told Rhodes. "We can and will continue that."
The DIA gets about $22 million of its $32 million annual budget from the millage, she said.
Erickson also said the museum so far has raised $85 million of the $100 million it pledged as part of the grand bargain. "It's not easy but we're doing very well," she said. "I am completely confident that we will do it."
Rhodes asked Erikson about the value of the museum and its programming to the city's children - 60,000 of whom visited the facility last year - as well as its families and adults.
"Why do adults go to the DIA?" the judge asked.
"They go to be educated," Erickson said. "They go to be inspired. They go to see something different. It takes them out of everyday life in a way that is satisfying."
Earlier Thursday, the city called art evaluator Michael Plummer, who also testified that any sale would devastate the museum.
"Attendance would drop significantly. It would more or less fall off the map in terms of international individuals who would come to visit. It would most likely lose its donor base," Plummer said. "Once you sell off art that has been gifted, donors stop giving to museums," he said. "They feel the trust has been broken you end up with a much diminished institution."
Plummer, founder of Artvest, was hired by the city to analyze the collection's value. The report valued the art at between $2.8 billion and $4.6 billion. But Plummer testified that it would be difficult to actually raise that amount of money for various reasons, including the vagaries of the art market and the "taint" of the forced sale to pay debts.
"It would be considered to be a tragic event. It would not be sold in a celebratory fashion. It would not be marketed in a glamorous way. It would have to be sold in a discrete way and it would have an aura that was negative not positive," said Plummer.
The trial will resume Sept. 29. Rhodes granted the delay to give time to bond insurer Financial Guaranty Insurance Co., which is now the last major holdout creditor in the case, to craft its legal strategy after its former fellow holdout, insurer Syncora Guarantee, struck a settlement deal with the city.