Self-Portrait by Vincent van Gogh at the the Detroit Institute of Arts. (Daniel Mears / The Detroit News)
The Detroit Institute of Arts is angling to contribute to an estimated $700 million fund to protect its collection from creditors and bolster underfunded city pensions.
The question, people close to the process say, is not whether the museum will commit to raising cash over and above its roughly $12 million in annual fundraising and continuing endowment drive. It’s how much is needed to close the deal, to get the attention of creditors and to cement a state contribution that would require approval of the Legislature.
DIA Chairman Gene Gargaro discussed the issue Friday with Gov. Rick Snyder in Washington, where the governor accepted a public leadership award from Americans for the Arts. Snyder, who is spearheading a state effort to pay $350 million over 20 years, urged the DIA to participate in a fund that would be a linchpin of any Detroit bankruptcy settlement.
And museum officials were set to meet Monday afternoon with the Troy-based Kresge Foundation, one of two major foundations leading the $330 million contribution by nine foundations to a fund that essentially would buy the DIA’s freedom from the vagaries of city ownership and supplement pensions for city retirees.
“Negotiations are continuing,” the DIA’s chief operating officer, Annmarie Erickson, said in an interview. “Things are progressing very well and we hope to have a resolution as soon as possible.”
When is unclear, say people close to the process. The accelerating campaign, powered by a foundation-led effort that last week was joined by the state, is running ahead of the DIA’s ability to keep up. Organizers say the museum should be expected to commit to raise $100 million, but Gargaro and other museum officials say that would be “not doable” by the DIA.
What would be doable is unclear, too. An effort that falls short of initial public expectations risks undermining political support in Lansing for the state-funded piece of the package; a pledge that satisfies the superficial optics of politics but over-commits the DIA and its donor base carries a risk all its own with potentially long-term implications.
The DIA’s leaders “absolutely” intend to raise money and contribute to the fund, say several sources close to the process. But they’ve concluded they cannot do so at the expense of existing fundraising efforts or an endowment campaign that would be critical to sustained funding should the tricounty millage expire, as scheduled, in less than nine years.
Bottom line: The DIA is struggling to find the right balance between shifting politics, pressing talks with creditors it cannot control and its longer-term strategic goals laid out long before Detroit became the largest city in American history to file Chapter 9 bankruptcy.
The DIA is working with the New York strategic communications firm, BerlinRosen, to help shape its message and its reverberation in the hyper-critical art world. Additionally, museum leaders are working their contacts among key regional and national foundations, even as they prepare to open talks for potential support with corporate foundations tied to Detroit automakers and other major downtown employers.
It’ll be a tricky ask, but one that comes at a time of comparative prosperity for Detroit’s major corporate players. Quarterbacked by Chief U.S. District Judge Gerald Rosen, the fund push is an audacious attempt to raise cash to settle what essentially is a cash-less municipal bankruptcy — a sprawling, complicated and contentious workout rife with competing interests grasping for whatever financial morsels they can get.
Amid that comparative financial desert stands the DIA, a repository of art and culture that Rosen and Snyder, the legislature and nine foundations, the DIA and its leadership are trying to insulate from the predations of creditors, including city retirees and pension funds.
“We’re in the middle of a negotiation,” said one person close to the process. The DIA is “certainly part of it. It’s fair to say the DIA is going to come up with something. It’s fair to say they’re struggling. This is one of those deals that’s not done until it’s done.”
But it needs to come soon, thanks to an unforgiving bankruptcy timeline driven by Emergency Manager Kevyn Orr, U.S. Bankruptcy Judge Steven Rhodes and his March 1 deadline for a “Plan of Adjustment” to be filed by the city’s bankruptcy lawyers. The goal is that any plan to rescue the DIA and bolster city pensions would be incorporated into what insiders call “the POA.”
They need a deal first, this unprecedented financial coalition to protect the DIA’s treasures, do right — or at least better — by the city’s pensioners and ensure a cultural cornerstone of the next Detroit.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays.