Detroit — An Illinois finance scholar on Wednesday urged a city pension fund to push Detroit’s emergency manager to solicit competing plans that could preserve the city’s artwork and put its capital to work.
Mark White, a trustee of the Evanston History Center with degrees in finance and economics, told General Retirement System trustees that several plans, including his own, exist for the Detroit Institute of Arts and Orr should evaluate them all as he puts together a plan of adjustment for the bankrupt city.
On Wednesday, White suggested Orr should run a competition among the varying alternatives for using the city’s artworks to raise capital. His own plan, “coaccession,” calls for selling shares in artwork to individual investors, while keeping the pieces on the museum’s walls.
White estimates the collection is worth $15 billion, enough, he claims, to cover the city’s legal obligations and then some.
“These plans are out there, but it’s all untested. Even the idea of having foundations create a fund to rescue the DIA,” said White, in reference to an unprecedented proposal backed by Detroit’s bankruptcy mediators that has multiple foundations chipping in several hundred million for the effort.
“Now is the time to look for the best plan that keeps Detroit’s promise to maintain a public art institute,” he said, during a 15-minute presentation to the board. “Also, (a plan) to raise enough capital so Detroit can keep its promises to its workers, retirees, investors and its residents. The money is there. There’s billions of dollars available to Detroit.”
Bill Nowling, a spokesman for Orr, did not address specifics of White’s plan, but offered a statement via email saying White has “no credibility in the art community, finance community or the public sector.”
Later Wednesday, White said “credibility comes from running the experiment.”
“There’s a lot of things we just don’t know until we try,” he said. “There are billions of dollars riding on this decision. Don’t reject a plan because it doesn’t come from someone who has done it before. Nobody has ever done it before.”
Earlier, White told pension board members he first presented his proposal to former Mayor Dave Bing in 2011. It went to the museum in December and did not gain traction. Museum officials said it would constitute a violation of the public trust, he said. He also provided his plan to Orr’s office.
Christie’s Appraisals has valued 1,741 pieces of city-purchased art at $454 million to $867 million. White said his $15 billion estimation is derived from applying an average to the entire 66,000 piece collection of city-owned artwork.
Of the approximately 65,000 works in the DIA, about 2,700 of them were purchased with city funds. All of the other pieces were either gifts, purchases with donated funds or purchases with endowment funds restricted to the acquisition of art, according DIA Director Graham Beal.
Through the structure of his plan, White said he would act as a guarantor of the performance of his system. He would charge a “small percentage” to ensure compliance on both ends with investors and the city.
White comes to Detroit to renew the push for his plan days after a coalition of national and regional foundations pledged $330 million to bolster underfunded pensions for city retirees and to protect the DIA collection from liquidation.
Michael VanOverbeke, legal counsel for the city’s General Retirement System, said Wednesday’s presentation, requested by White, was strictly informational for the board and another means of leaving “no rock unturned.”
“This is for us to have an understanding,” he said, noting the art has “tremendous value” and monetizing it is an important component of the bankruptcy.