Nine foundations have committed more than $300 million to help the bankrupt city of Detroit protect the assets of the Detroit Institute of the Arts’ (DIA) collection and help preserve its two pension systems.
Detroit bankruptcy mediators issued a statement today calling the effort “extraordinary and unprecedented,” to help resolve two issues: The “underfunding of Detroit’s two pension systems and the preservation of the DIA and its iconic art collection.”
More than $330 million has been committed from 130 individual contributors, including an unsolicited $5 million from Dr. Paul Schaap, a former Wayne State University professor, with more announcements to come. A fund has been established with the Community Foundation for Southeast Michigan (CFSE) to capture other private voluntary contributions with a goal of $500 million.
A leadership committee has been formed consisting of the presidents of the Ford Foundation, Kresge Foundation, John S. and James L. Knight Foundation and the Community Foundation for Southeast Michigan. Among the other foundations that comprise the group are the William Davidson Foundation, Fred A. and Barbara M. Erb Family Foundation, Hudson-Webber Foundation, McGregor Fund and Charles Stewart Mott Foundation.
“The foundations’ agreement to participate is specifically conditioned upon all of their funds being committed to the twin goals of helping the city’s recovery from bankruptcy by assisting the funding of the retirees’ pensions and preserving the DIA’s art collection as part of an overall balanced settlement of disputes in the bankruptcy,” according to a statement released today by the U.S. District Court for the Eastern District of Michigan. “All recognize that if these two goals can be accomplished, a third absolutely critical goal of facilitating the revitalization of the city in the aftermath of the bankruptcy will also be greatly advanced.”
DIA’s collection includes works by Van Gogh, Matisse and Rembrandt. According to reports, Detroit Emergency Manager Kevin Orr had nearly 2,800 pieces of art held by the city-owned museum were appraised last month at between $450 million to $870 million. The approximately 2,500 works in the DIA’s collection have a fair-market value of as much as $8 billion, according to a report last month in the Detroit Free Press, with almost 500 of the most valuable pieces valued at less than $2 billion. The city faces debts of some $18 billion, including more than $3 billion to its employee pension systems.
“As philanthropies with ties to Detroit and southeastern Michigan, we share a strong commitment to the revitalization of the region. Many of us have worked for years to help rebuild the city and ensure its prosperous and sustainable future,” according to a statement from the Kresge Foundation. “For these reasons, when Chief Judge Gerald Rosen and his mediation team facilitated an opportunity for us to work together for Detroit’s future, we readily agreed.”
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