Detroit Emergency Manager Kevyn Orr answers questions from Carmen Harlan of WDIV-TV at the Detroit Economic Club Luncheon on Thursday. (John T. Greilick / The Detroit News)
Detroit — Emergency Manager Kevyn Orr challenged trustees of the Detroit Institute of Arts on Thursday to “come up with a proposal” to leverage its collection to help Detroit resolve its debt in the city’s historic Chapter 9 bankruptcy case.
“If they don’t, I have an obligation to find a solution,” Orr told the Detroit Economic Club. Asked whether cash could be raised without selling art, he answered yes, paused, and listed potential options. They include leases, selling “covenants,” or shares, in art and bundling works in traveling exhibits.
But DIA board members — including Chairman Eugene Gargaro — bristled at the suggestion they are in denial about the role the museum’s city-owned art likely could play in speeding the city’s exit from the largest municipal bankruptcy in American history.
“We are not sitting on our hands,” Gargaro said in an interview with Nolan Finley, editorial page editor of The Detroit News. “I'm working on this 24-7. The speculation about monetization, pledging, fundraising — we’re looking at all of that. The last thing we want to do is have some independent third party settle this. We understand the DIA is an integral part of restructuring the city.”
Two DIA board members attending the Economic Club meeting independently backed the contention of Gargaro, who is traveling outside the country. “All of the options are being discussed,” one board member said in an interview. “The board is engaged.”
Apparently not enough for Orr: “We have an obligation to our creditors, who are owed a great deal of money,” he said, adding that he cannot “testify to the bona fides” of the city’s bankruptcy plan without considering DIA art. “I’ve got to balance the situation. There’s no plan to take the bricks out of the Diego Riveras” — a reference to the famous Detroit Industry frescoes.
Orr’s public challenge and unambiguous implication of dawdling by the DIA board underscore the gravity of the situation. They come as leaders in the philanthropic community are planning to meet next week with Orr to potentially mediate the highly public logjam pitting the DIA and its well-connected donors against Orr, the city’s creditors and Orr’s boss, Gov. Rick Snyder.
The bickering signals that Orr and his team have concluded that at least a portion of the DIA’s holdings — or revenue derived from it — would need to be part of the “plan of adjustment” the city would propose for approval by U.S. Bankruptcy Judge Steven Rhodes.
The latest public sparring also effectively ends the truce brokered in late May at the Detroit Regional Chamber’s Mackinac Policy Conference by Gargaro and staffers representing Orr and the governor. They agreed a portion of the DIA’s 65,000-piece collection are city assets; that neither side wanted to sell art; that Orr has a fiduciary responsibility to value all city assets; and that bargaining in public was not helpful.
Four months and lots of well-chronicled controversy later, Gargaro confirmed he still has not met with Orr, adding, “I hope to do that. But representatives of the museum have been meeting with his team since May. We agreed not to play this out in public. I cannot tell you where it will end up. But we are working hard at the museum with Kevyn Orr. Talking in public doesn’t get deals done.”
Maybe not, but public pressure magnified by media reports and hand-wringing in the art world could begin to bring polarized sides together. If they cannot, entrenched positions could make room for interested third parties to engage in their own brand of shuttle diplomacy to avert a more damaging calamity.
“If I were doing it, I would get the most influential people I could get,” said Ken Whipple, former non-executive chairman of Korn/Ferry International and a retired high-ranking executive at Ford Motor Co. “They ought to be talking about it. One way or another, a decision is going to be made.”
Judging by Orr’s remarks Thursday, the emergency manager clearly is trying to roust the DIA board and senior management from an idealized defensive crouch hardened by outrage in the museum world and the political posturing over the tri-county millage. And the effort to prod the DIA into what one member of Orr’s team called “more common sense thinking” is just beginning.
A valuation by Christie’s of the first tier of city-owned art — roughly 400 of the DIA’s most valuable 3,500 works — is due by the end of this month. The “Tier 2” valuation report of the remaining 3,100 pieces is expected by the end of November, meaning talks haven’t even begun over how (and whether) the DIA and the city-owned portion of its collection can help Detroit exit bankruptcy.
Gargaro, for one, says it is not appropriate to discuss the potential solutions sought by the emergency manager until Christie’s completes its valuations and the accompanying recommendations — if any — to “monetize” the holdings short of selling them outright.
“I'm not,” he said, “going to bid against myself.”
Daniel Howes’ column runs Tuesdays, Thursdays and Friday.