Before I went on vacation two weeks ago, I thought I could no longer be shocked by anything that might happen in Detroit.
Earlier this spring, the state took over the control of the city, after decades of decline, neglect, crime and financial mismanagement. Nevertheless, I was stunned to come home to the news that Emergency Manager Kevyn Orr might consider selling off the priceless collections of the Detroit Institute of Arts to pay down the city’s massive long-term unfunded liabilities.
Many people didn’t realize the city owned the museum and its collection, which has been run and financed by the private Founders’ Society for years. But technically the city does.
Yet selling any paintings would make about as much sense as a poor nineteenth century farmer making a sandwich out of the last seeds he had carefully saved in order to plant his next year’s crop.
The DIA is one of the greatest art museums in the nation, and one of the best things Detroit has going for it.
A Detroit without cultural assets would resemble a refugee camp more than anything else and have no chance of ever being a great city again. Over the last few days, all sorts of media loudly and correctly denounced the idea of selling off the DIA’s art.
But I have a suspicion that this isn’t really what is going on here. Yes, Kevyn Orr indicated he needed to put a value on the collection. But that may be no more than a wake-up call to everyone.
This may also be a part of the due diligence necessary as the Emergency Manager and his team put together a comprehensive catalog of the city’s assets and liabilities. It is still more likely than not that Detroit will eventually file for bankruptcy. The city is carrying on its books a figure usually given as $15 billion in debt, mainly in unfunded pension liabilities. Actually, it isn’t quite as bad.
Maybe a third of that is Water and Sewerage Department debt, and they have assets -- water sales -- to cover it. So the total amount is something like $10 billion, mainly in pension obligations.
Within five years, close to $2 billion of that will come due. The only way I see that the city can avoid bankruptcy is if Orr can get the creditors to agree to restructure the debt. That will also probably involve significant concessions by those expecting benefits.
Selling off the DIA collections would be extremely difficult, and be seen as a betrayal by all the individuals and groups who have donated art and money. Lawsuits and court battles would be certain.
And selling off the art would mean nobody would ever donate to the museum again. Including the suburbanites who nine months ago voted to tax themselves to help keep the DIA afloat.
But while selling the art collection makes no sense, this experience may have a silver lining. Detroit is in a financial condition akin to life-threatening cancer. Whatever is done to save the city is going to be drastic and difficult. There aren’t any easy choices.
If everyone accepts that, we may have a chance of working with the pain that gives Detroit the best long-term chance at renewal.
Jack Lessenberry is Michigan Radio's political analyst. Views expressed in the essays by Jack Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, the University of Michigan.
