The Economist provides some interesting details on the financing for Christo’s massive projects as he is set to open his first project in 10 years and the only one since the death of his wife and collaborator six years ago. Christo’s New York City project, the Gates, is said to have brought $250m to the metropolis in the form of tourism and visitor spending. But Christo sees none of that revenue:
A Harvard Business School report from 2006, looking at the way Christo and Jeanne-Claude fund their work, cited “illiquidity, uncertain valuations and faddishness” as reasons banks often avoid lending for arts. For “The Gates” (2005), which went up in New York’s Central Park, Bank Leu, then a subsidiary of Credit Suisse, provided Christo with a credit facility of $10m, and held $60m-worth of his works as collateral. In return, Christo paid an annual fee of $10,000, 1% of the unused credit, and 1% plus LIBOR (the rate banks charge for lending to other banks) of the credit used. Such a business model is rarely seen in the art world, but its unconventionality was in keeping with the work. And it certainly delivered: the estimated 4m visitors who saw “The Gates” brought in around $250m for New York City. It is a lesson not lost on the Italian government.
Christo in Italy: Walking on water (The Economist)
