In advance of its August bankruptcy trial, the City of Detroit commissioned Artvest Partners to appraise the works housed in the Detroit Institute of Arts. The verdict is in. According to Artvest, the collection is worth between $2.7 and $4.6 billion dollars. (PDF)
The city has over 100,000 creditors and collectively owes them more than $18 billion dollars. If the collection reaches its full potential, it could finance nearly one-fourth of the city’s debt. There’s just one problem. That price tag will never be attained at sale.
Why? Several reasons.
First is volume. The collection totals more than 60,000 pieces. Imagine that many works of fine art hitting the market at once. There will be more value at auction than customers who can afford it.
Second is lawsuits. While the collection is owned by the city and considered an asset, many of its works were donated with intent to remain at DIA. Donor lawsuits will delay transactions and increase sales costs.
Finally, we have a fickle market. The collection spans a large period of time with works from many eras. Tastes change and values fluctuate. Some works will inevitably hit the market at inopportune times.
Still, consider small companies like Detroit-based Federal Pipe & Supply. The city owes them $16,000.00 for contract work. Federal Pipe lived up to its end of the bargain. Detroit must find any means necessary to live up to its end. If that means selling its assets, then so be it. They will end up in the hands of those who are better able to manage them.