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Thu September 19, 2013
When it comes to DIA rumors, here's what's really true
Editor's Note: Corrected Abigail Esman's name from "Eisman" to the proper spelling, Esman. The proper pronunciation rhymes with "says man", not "ice man."
Right now, appraisers from New York Auction House Christie’s are sifting through some 3,500 pieces at the Detroit Institute of Arts.
As part of the city’s bankruptcy case, the Emergency Manager is paying them to put a price on part of the collection.
Of course, that’s fueling even more fast-flying rumors about losing great works to private collectors, or getting massive loans for the city using Monets as collateral.
So here’s a quick field guide to what’s true, and what’s just talk.
Let’s assume Emergency Manager Kevyn Orr puts the art on the bargaining table.
DIA Apocalyptic Rumor #1: If the EM does put art on the bargaining table, and it does go on sale, public museums don't have a chance at this art, because private collectors are the only ones with this kind of cash.
"The prices for art are way beyond what museums can afford anymore," says Abigail Esman.
She’s written about the art market for Forbes and ArtInfo.com, and she consults for collectors.
These days, she says, museums are priced out, because art is a really hot investment.
"The economic crash in 2008 barely touched the art market,” says Esman. “Which isn't to say it didn't suffer. But it rebounded really fast."
So now Wall Street and hedge fund guys are putting massive amounts of money in art.
Which brings us to…
DIA Apocalyptic Rumor #2: The museum's masterpieces will be lost to the public so some rich guy can hang it in his rec room.
“That’s the likelihood,” says Esman.
“Not necessarily their rec room,” she says, laughing. “But their living room, their ballroom, their summer home. Yeah. Or their storage facility, which is unfortunately where a lot of this stuff ends up."
So that would be the worst case scenario: an investor buys, say, Peter Bruegel the Elder's "Wedding Dance" for an obscene amount of money, and stashes it where the public can't see it.
But there's another way this could go down: the altruistic investor.
"The very people who are buying art today, not all of them, but many of them, will in future generations be looked upon as founders of great museum collections," says Marion Maneker, the publisher of Art Market Monitor.
Art collectors lend their stuff to museums all the time – heck, sometimes they even build museums just for their collections.
Just look at East Lansing's Eli and Edythe Broad Museum.
Then, there’s a third option – and coincidentally, it’s also…
DIA Apocalyptic Rumor #3: The city can keep the art within DIA walls and still make money off it.
Christie's and Detroit EM Kevyn Orr talk about “realizing value without relinquishing ownership."
Translation: put those Monets up for collateral, baby.
"The banking world has started to acknowledge or use art as a piece of collateral,” says Maneker. “And that may be the one sort of missing element we don't understand in what could happen."
But hold up: the Levin Art Group is reportedly valuing the DIA’s entire collection at $10, maybe even $20 billion.
And securing a loan that size is a long shot, says consultant Abigal Esman.
"$20 billion dollars [in loans]? No. $2 billion dollars? You know, you'd probably have to talk to a couple of banks. And they'd have to be willing to lend Detroit the money."
And that's a big if.
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