Who Is Behind the Billion-Dollar Bids for Detroit’s Art?

Detail of Vincent van Gogh Self Portrait at DIA

The Detroit Free Press and Wall Street Journal both have greater detail from the court documents and their own reporting on what the various expressions of interest are concerning the Detroit Institute of Arts collection. The effort is being driven by a bond insurer that stands to lose a great deal of money in the bankruptcy. To stave off their loss, the FGIC has solicited interest from a range of financial entities. One is a collector offering to buy the whole collection or nothing at all. Another offer comes from Poly Auction just to acquire the Chinese works which raises an interesting cultural question about where those works “belong.”

In documents filed in court, FGIC said its financial adviser, Houlihan Lokey, had “conducted an exhaustive examination” of the value of the DIA by examining works in person, reviewing publicly available DIA records, reading books about the museum and discussing the situation with experts.

The insurer compiled the information into a 259-page document sent to 19 prospective investors after initially contacting 38 parties about potential bids. The insurer listed four indications of interest with prospective bids:

Catalyst Acquisitions and Bell Capital Partners: Offered $1.75 billion for “all assets held in the DIA” to be funded by the two companies and “a syndicate of leading global investors.”

Art Capital Group: Offered a $2 billion loan with the DIA’s entire collection used as collateral. The loan would carry a minimum interest rate of 6% to 9%. A person close to the bid solicitation said the city would likely have to sell some art to pay off the loan.

But some of the proceeds could be used to invest in city services and pay off creditors.

“Art Capital Group is providing financing that enables the people and community of Detroit to keep its treasured art assets,” said Montieth M. Illingworth, spokesman for Art Capital Group, in an email. “Our solution does not require the sale of this art collection. It is one of the country’s most important collections and it should stay in and with the people of Detroit. We also believe that our proposal addresses the requirements of creditors and is superior to the alternatives that have been made available today.”

Yuan Capital: The Asia-based investor offered $895 million to $1.473 billion for 116 specific works, including most of the museum’s most valuable pieces, with funding led by a “consortium” of investors.

Poly International Auction: The Beijing-based auction house offered up to $1 billion for the Chinese art collection, although the bid would be conditioned on a review of the specific pieces owned by the museum.

“Ignoring the proposals, or failing to cooperate with the interested parties to advance the process, would be another egregious example of the City placing politics over the financial and legal realities of the situation – this would almost certainly result in drawn-out litigation, which no one wants,” Spencer said.

Separately, bond insurer Syncora and the city’s retiree committee recently delivered subpoenas to the DIA seeking a massive list of documents detailing the DIA’s collection and finances.

The Wall Street Journal adds:

Marc Bell, a Boca Raton, Fla., investor said his namesake firm Marc Bell Capital Partners and a subsidiary of his firm, Catalyst Acquisition Group in New Jersey, have offered to buy the museum’s entire 66,000-piece collection for $1.75 billion. Such a deal would probably not close for six months, documents show.

Mr. Bell’s firm is known for focusing on mortgage-backed securities, but he also helped produce several award-winning Broadway musicals and plays, including “Jersey Boys” and “August: Osage County.” Mr. Bell, in an interview, said he started collecting contemporary art 15 years ago and owns pieces by 1980s art stars like Keith Haring and Kenny Scharf as well as Dutch graphic artist M.C. Escher.

He said he hasn’t yet decided what do with his art trove should the city approve his offer, but he said it could involve a combination of auction and private sales of some pieces, and loans or sales to museums where possible.

“I love art, but it’s also an investment,” he said. “And I don’t think it’s right that 30,000 people in Detroit should get shorted their pensions because the city can’t figure out what to do with its art. Somebody has got to step in, and we’re offering cash in the bank.”

He added that his offer price could change based on future valuations of the museum collection, but he said he wants to buy the entire collection, not just the masterpieces. “Our offer is all or nothing.”

The other groups offered either a loan based on the value of the art or a sale of part of the collection. Poly International Auction, which offered to spend up to $1 billion for the DIA’s Chinese art collection, is a Beijing-based auction house. Over the past decade, Poly has risen to become an unlikely power broker in the international art world. Controlled by Chinese state-owned China Poly Group, which began as a unit of the People’s Liberation Army, Poly is now the largest auctioneer in Asia and ranks only behind Sotheby’s and Christie’s in terms of total art sales.

Less is known about another interested Hong Konk-based entity, Yuan Management, which offered to buy 116 works in the collection, including some not valued by Christie’s last year.

Insurer solicits offers for DIA artwork; several billion-dollar bids received (Detroit Free Press)

Detroit Art Draws Potential Buyers, Says Bond Insurer  (WSJ.com)

Broad Art Museum Buys a Tourist Attraction

yayoi-kusama infinity room

The great Jori Finkel informs us that the Broad Museum has bought traffic in the form of Yayoi Kusama’s Infinity Room:

Yayoi Kusama’s “Infinity Mirrored Room,” the LED-studded walk-in installation that inspired eight-hour lines and countless selfies when shown at the David Zwirner Gallery in Manhattan last fall, is now heading to Los Angeles. The collectors Eli and Edythe Broad have bought the room-size installation for the Broad, their new art museum, for an undisclosed price.

Their collection, strong on artists such as Jeff Koons and Cindy Sherman, is not known for its light-based art or immersive artworks. But the Broads are making an effort to buy more large-scale, visitor-friendly art installations in the run-up to opening the museum’s new Diller Scofidio + Renfro building, currently scheduled for 2015.

Other recent acquisitions in this spirit include Ragnar Kjartansson’s “The Visitors” from 2012, a nine-screen experimental music video, bought from Luhring Augustine, and William Kentridge’s five-channel-video plus sculpture installation, “The Refusal of Time,” purchased from Marian Goodman. (Another example of this Kentridge installation is jointly owned by the Metropolitan Museum of Art and San Francisco Museum of Modern Art.)

Broad Art Museum Acquires Kusama’s ‘Infinity Mirrored Room’ (NYTimes.com)

With Bonds Threatening to Sink Delaware Art Museum, Director Decides to Sell Works to Raise $30m

hopper_summertime_550px

The Association of American Museum Directors isn’t having a ton of luck lately in preventing museums from selling works to pay off debts or for any other reason than to buy more works. If the reaction to the Delaware Art Museum’s particular bind is any indication of what the AAMD does, following Randy Kennedy’s story in the New York Times, then it is no wonder.

The Delaware Art Museum issued a statement today that it would sell up to four works of art to raise $30m and retire debt as well as fund its endowment. The museum’s director made clear that the viability of the institution was at stake.

The museum said that repayment terms for tax-exempt bonds issued in 2003 for an expansion became accelerated for various reasons during the financial crisis, and at the same time the museum experienced a significant decline in its endowment as a result of stock market performance, forcing trustees to conduct layoffs and cut funding for exhibitions.

The AAMD’s response to the crisis seems to have been a combination of begging and, well, begging:

The Association of Art Museum Directors had been in private discussions with the museum for several months, encouraging it to seek other ways to address its debt, such as making a public appeal or asking legislators to help restructure its debt. Timothy Rub, the association’s president, said he believed the museum did not seriously explore options other than selling.

Delaware Art Museum Will Sell Works to Pay Off Debt (NYTimes.com)

Miami Artist Destroys Ai Weiwei Vase at PAMM in Protest Over International Artist Receiving Exhibition

Perez Ai Weiwei Incident

CBS’s local station in Miami reports on the destruction of a vase in the Ai Weiwei exhibition at the Perez Art Museum by Maximo Caminero:

PAMM’s security told Camino [sic], according to the affidavit, to put the vase down—but he didn’t listen. Instead Camino threw and broke the vase—which shattered into pieces.

Camino, whose occupation is listed as an artist on the affidavit, “spontaneously” told an officer that he broke the vase in protest of local artists because the museum only displays international artist’s work.

Museum Visitor Destroys $1 Million Ai Weiwei Vase “In Protest” (CBS Miami)

A Few Writers Owe Peter Schjeldahl an Apology

Peter Schjeldahl

Last July, New Yorker art critic Peter Schjeldahl had the temerity to take a humanist stand on the issue of Detroit’s art in the context of its bankruptcy. He was excoriated by arts writers for saying the pensioners should be put in a superior position to the city’s holding on to it’s art:

Art will survive. The pensioner will not. I do not view the impending decision as a close call.

Of course, Schjeldahl wasn’t saying that the art should be sold or that it would a good thing to sell it. What he said was that the commitment to the pensioners super-ceded the city’s pride in owning cultural treasures. A bankruptcy is all about creating a hierarchy among the creditors.

For all the dudgeon expressed by those on the “side of the art,” their hysterics did nothing to advance the negotiations. Luckily, two Federal judges acted to guide the negotiating process in a manner that has achieved the best possible outcome.

Pensions for the city workers have been put at the top of the list of priorities. The art has been made a close second and now we see that financial creditors are being made to wait last in line (as it should be.) Dealbook explains this morning:

Detroit is preparing to resolve its bankruptcy case by splitting its unsecured creditors into two groups and treating them differently, according to people briefed on the city’s plan.
One group, composed of retired city workers, would get cash for their claims, while others, holders and insurers of certain city debts, would get a series of notes of uncertain but lesser value. One person, who asked not to be identified because of a confidentiality order, called the plan “massively discriminatory.”

Now that’s the kind of discrimination few but philistines would object to. However, this outcome required a credible threat to monetize the art. That is precisely what Schjeldahl was trying to say before he was shouted down.

Detroit Plan Is Said to Split Creditors Into 2 Groups (Dealbook/NYTimes)

Is This the Final Piece of the Detroit Puzzle?

The Detroit Institute of Arts 

In what may be the keystone to the entire Detroit Institute of Arts bailout, the museum itself announced its own contribution to the fund-raising plan which would transfer ownership of the museum out of the City’s hands:

DIA leaders said today that its board of directors approved a $100 million fund-raising campaign over 20 years and would look to corporate and individual donors for the money. As part of the deal, the City of Detroit would transfer legal title to the museum building, the art collection and related assets, ending nearly a century of city control and shielding the museum forever from whims of city finances and politics.

The DIA’s $100 million commitment marks a potential turning point in Detroit’s historic Chapter 9 bankruptcy, helping clear a path to a less painful and faster resolution to the bankruptcy.

DIA pledges to raise $100 million for art, Detroit pension rescue fund (Detroit Free Press)

Don’t Blame the Market, Good Museums Built the Public’s Taste for Contemporary Art

Top Ten Art Museum Attendance 2013

Last month, The Economist ran the above chart and commented, “The rise of contemporary art is closely related to the growth in the art market.” The statement could be true. It could also be that the rise of art market in the past decade and a half tracks the growth of Contemporary art institutions. The Frieze Art Fair started in 2003 a few years after the opening of the Tate Modern in 2000.

Art Basel Miami Beach chose Miami for the number of private collectors with large, almost institutional collections. And later many of those collectors opened their own museums which have the freedom to take risks that larger institutions cannot.

Contemporary art seems to be what the public wants—and artists, their dealers and museums are happy to supply it. […]  “The interest in contemporary art is much broader, much richer and much deeper than it was when I started out 30 years ago,” says Paul Schimmel, a Los Angeles curator-turned-dealer.

Among museums, grand institutions like the Museum of Modern Art in New York are seen as stuffier than the Kunsthallen, the not-for-profit municipal art galleries found in many German cities. Earlier this year the Ludwig Museum in Cologne opened a retrospective by Andrea Fraser with a video of the artist having sex with one of her collectors. Los Angeles-based Ms Fraser is well represented in public collections in Britain, France and Germany, but considered too daring for an American retrospective.

Contemporary art: On a wing and a prayer (The Economist)

Denver vs. Dallas: Measuring the Art Museums

Denver Museum
Denver Museum

It’s a regional thing here in the US but Colorado and Texas have a lot of animosity towards each other. Denver recently received a $100m gift of 22 landscapes, including works by Claude Monet, Pierre-Auguste Renoir, Camille Pissarro, Eugène Boudin and Edouard Manet. That might stir things up a little but as the Dallas News’s art critic explains, it turns out they have somewhat similar histories when it comes to establishing art museums:

Dallas and Denver aren’t known primarily for their cultural tourism. Tourists to Denver generally head to the mountains. Visitors to Dallas tend to be conventioneers, sports fans or shoppers.

Both cities were founded at roughly the same time, in the mid-19th century, but Denver was wealthier in the 19th century, while Dallas surpassed it in both wealth and population in the second half of the 20th century. The cities founded their downtown art museums 10 years apart — in 1893 for Denver and 1903 for Dallas — but Denver’s grew more quickly and now has a collection of about 70,000 artworks, compared to the DMA’s roughly 25,000.

The Denver Art Museum has harnessed attention-getting architecture. The campus boasts two buildings by major figures: the only building in the U.S. from midcentury-modern Italian master Gio Ponti, which opened in 1971, and a boastful geometric explosion of metal-clad forms by New York-based Daniel Libeskind, which opened in 2006.

By contrast, the DMA’s discreet limestone boxes by Edward Larrabee Barnes seem almost unassuming.

How does Denver’s art scene compare to Dallas’? (Dallas Morning News)

Denver Art Museum to acquire its first van Gogh, Cézanne, four by Monet (The Denver Post)