The city of Detroit moved to finalize its end of the “grand bargain” Thursday, as the Detroit City Council voted to transfer the Detroit Institute of Arts’ assets to a public trust.
This week, Lansing lawmakers approved $195 million toward the $816 million grand bargain – a linchpin of Detroit’s bankruptcy restructuring plan.
The general idea is that the money will minimize cuts to city pensions, while legally safeguarding the DIA’s collection.
The Council’s vote was largely a formality; emergency manager Kevyn Orr could have simply issued an order, though he decided to seek Council approval anyway.
Still, by agreeing to move the museum’s assets into a charitable public trust, another piece of the grand bargain has fallen into place.
Detroit corporation counsel Melvin “Butch” Hollowell said the DIA was founded in 1885 as a “public trust” –and this just makes that legally binding.
“The language says ‘in perpetuity,’” Hollowell said. “(It) will ensure the art is housed here in the city of Detroit, and for the benefit of the people of the city of Detroit, the region and the state.”
Hollowell said everyone wants to see pensioners made “as whole as possible,” but art is also an important asset for Detroit – it’s even mentioned in the preamble to the city’s charter.
“It says how important art is to the quality of life of the people of this city,” Hollowell said. “This is a big step in that direction.”
The deal would need to be finalized by lawyers for the city, the state, the DIA, and contributing foundations before the end of the year. The hope is that Detroit can emerge from bankruptcy in the fall.
But as part of the city’s plan of adjustment, the grand bargain still faces legal battles from other city creditors, who argue the city should sell DIA assets to pay them off.
It also needs approval from city retirees, and ultimately from Judge Steven Rhodes.
