Plan to Privatize the DIA Still Alive
Acton Institute Powerblog

Plan to Privatize the DIA Still Alive

DetroitInstituteoftheArts2010AEarlier this year I argued for a plan that would privatize the DIA, allowing for the City of Detroit to cash in on a measure of the collection’s worth to satisfy creditors and simultaneously protect the DIA’s artwork from being parceled out in bankruptcy proceedings. At the time, I had doubts about the practicability of the idea. I figured that even if such a path were to be pursued that the DIA would likely end up torn apart like a chew toy. Once the city’s creditors realize that they might be able to extract something of value from the DIA, they have all the incentive in the world to demand an exorbitant price for privatizing the DIA. Likewise the city officials would have a massive bargaining chip they could use to extract as much as possible from potential donors.

I still have doubts about the privatization plan’s practicability, but the prospects do seem a bit brighter now that Judge Gerald Rosen has determined that the City of Detroit is eligible to file for bankruptcy. This is because Judge Rosen is one of the leading advocates for a privatization plan. Rumors like this have been simmering in the media for weeks, but according to the Detroit Free Press, now “some of the city’s most powerful leaders are working furiously to fashion a grand bargain in which nonprofit foundations would put up $500 million to spin off the Detroit Institute of Arts from the city, and that money would be used to reduce pension cuts and help rebuild city services.” Apparently Judge Rosen is using his influence to encourage “some of the country’s largest charitable foundations and their smaller local cousins to pony up the money.”

Half a billion dollars might sound like a lot, and it is, but it represents only a fraction of what the DIA collection might fetch. Christie’s recently valued the most easily liquidated and lucrative parts of the DIA’s holdings at somewhere between $452-$866 million. But this appraisal “covers only a small part of the collection in terms of numbers — less than 5 percent of the museum’s 66,000 works.” Previous rough estimates of the entire holdings of the museum were as high as $2.5 billion.

One of the complications for any sale is the agreement reached with surrounding counties for a millage supporting the DIA. Selling off the DIA’s assets, even a portion of them, would likely invalidate the millage and dry up another already-established revenue stream for the museum. I have received word, however, unofficially at least that some county officials would not pursue voiding of the millage agreement if the works were to be sold to a non-profit and kept at the DIA. But if the works were to be moved out of Detroit, the surrounding counties would undoubtedly seek to have the agreement nullified.

The negotiations are delicate and complex. They involve hundreds of millions of dollars, nonprofit foundations large and small, elected officials, bureaucrats, commissioners, judges, lawyers, and a wide variety of other interests. But at least the idea is receiving a hearing and is being earnestly pursued. I, for one, hope that Judge Rosen is successful and that the DIA can be successfully severed from the City of Detroit without the destruction of the institution itself.

It’s high time for the separation of city government and art in Detroit.

Jordan J. Ballor

Jordan J. Ballor (Dr. theol., University of Zurich; Ph.D., Calvin Theological Seminary) is a senior research fellow and director of publishing at the Acton Institute for the Study of Religion & Liberty. He is also a postdoctoral researcher in theology and economics at the VU University Amsterdam as part of the "What Good Markets Are Good For" project. He is author of Get Your Hands Dirty: Essays on Christian Social Thought (and Action) (Wipf & Stock, 2013), Covenant, Causality, and Law: A Study in the Theology of Wolfgang Musculus (Vandenhoeck & Ruprecht, 2012) and Ecumenical Babel: Confusing Economic Ideology and the Church's Social Witness (Christian's Library Press, 2010), as well as editor of numerous works, including Abraham Kuyper Collected Works in Public Theology. Jordan is also associate director of the Junius Institute for Digital Reformation Research at Calvin Theological Seminary.