Groups pledge $330 million to save Detroit museum - The Buffalo News

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Groups pledge $330 million to save Detroit museum

DETROIT – National and local philanthropic foundations have committed $330 million toward a deal that would help preserve the Detroit Institute of Arts’ renowned collection by bolstering the city’s employee pension funds, federal mediators involved in the city’s bankruptcy proceedings announced Monday.

A group including the Ford Foundation, the Kresge Foundation and the John S. and James L. Knight Foundation have pledged to pool the money, which could essentially relieve the city-owned museum of its responsibility – estimated at millions of dollars – to help Detroit pay its debts in its federal bankruptcy case. As part of the plan, which negotiators have been working on quietly for months, the museum might be removed from city ownership and put under the control of the state. But mediators stopped short of saying that an agreement had been reached with state officials or with the office of Kevyn D. Orr, Detroit’s emergency manager, who had said the museum must pay its share to help ease the city’s debt.

In a statement issued by the U.S. District Court for Eastern Michigan, mediators called the foundations’ agreement “an extraordinary and unprecedented effort to help resolve two very challenging sets of issues – the underfunding of Detroit’s two pension systems and the preservation” of the Detroit Institute “and its iconic art collection.”

In December, Christie’s auction house, which was hired by Orr’s office to appraise part of the collection, put price tags on many of the institute’s masterpieces.

The auction house said that selling a group of some of the museum’s most valuable works would generate between $454 million and $867 million.

Orr has told the museum’s officials publicly that they must “save themselves” by finding a way to contribute money, possibly as much as $500 million, toward the city’s debt relief.

Some of Detroit’s largest creditors have contended in court that the museum, which is wholly owned by the city, is not an essential municipal asset and that valuable works of art should be sold to help pay those who are owed.

According to a source with knowledge of the talks, Monday’s announcement comes after “marathon negotiations last week,” when city, pension, retiree and foundation representatives met at a law office in New York City for five days.

“I don’t think anything is settled yet. This is a conceptual deal. Until the deal is closed and until money is transacted, there’s no deal yet,” he said.

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