A new assessment of the potential value of the collection of the Detroit Institute of Arts – commissioned by a Detroit creditor that would like to see pieces from the collection sold to settle debts in the city’s federal bankruptcy case – determined that the artworks could be worth as much as $8.5 billion dollars.
The appraisal is one of several that have been made in recent months, with widely disparate estimates, as the collection has found itself in a political tug-of-war over the city’s assets. The new appraisal, conducted by Victor Wiener Associates, a New York firm, was commissioned by the Financial Guaranty Insurance Company, a bond insurer that stands to lose hundred of millions of dollars in the bankruptcy. The insurer has called for the masterpieces from the museum to be sold or monetized in some other way, such as being used as collateral for a loan.
An appraisal released earlier this year by the city and the museum itself found that the works could be worth $2.7 billion to $4.6 billion. But that appraisal, conducted by Artvest Partners, also based in New York, added that such a price tag would never be attained at sale, for reasons including donor lawsuits, weakness in the market for some kinds of paintings, and lower sale prices because of the sheer bulk that would flood into the market at once. The appraiser said that because of these factors and the notoriety of such a forced sale from a venerable public institution, the bulk of the museum’s collection might raise as little as $850 million.
The new appraisal, which was reported by The Detroit Free Press and The Detroit News, was conducted over a two-week period. The dueling appraisals will undoubtedly be fought over fiercely at the city’s bankruptcy trial, which begins next month. A realistic market value for the collection has become significant especially because of a public-private deal that has been worked out that could shield the art from sale if it wins approval in court. Known as the grand bargain, the deal has pooled pledges of more than $800 million thus far from foundations and the state of Michigan to help the city to shore up pension funds in exchange for keeping the collection intact.