Local and national foundations have committed more than $330 million to help the City of Detroit preserve the collection of the Detroit Institute of Arts and protect the underfunded pensions of city workers, Crain's Detroit Business reports.
Late last year, a coalition of foundations that includes the Community Foundation for Southeast Michigan (CFSEM) and the Kresge, Ford, and Knight foundations responded to a suggestion from Chief U.S. District Judge Gerald Rosen to create a fund that would help the city — which is in the midst of the largest municipal bankruptcy filing in U.S. history — honor its pension commitments and prevent the DIA collection from being liquidated. Details of the offer have not been revealed, but the foundation commitments and other contributions to a fund at CFSEM would go directly to DIA and pensioners and not fund a permanent endowment at the foundation, CFSEM president Mariam Noland told Crain's.
According to the Detroit News, private contributions to save the collection from liquidation could be used to present creditors with an alternative to a bankruptcy bidding war — though one person involved in negotiations with the city cautioned that the announcement does not resolve an estimated $3.5 billion in pension claims and $5.7 billion owed to city retirees for healthcare costs. In December, Christie's Appraisals estimated the fair-market value of the DIA collection at between $454 million and $867 million.
"While we approach this matter from different perspectives, we are united in the view that the plan offers an important opportunity to help Detroit find much-needed solutions to its unique challenges," said the foundations in a joint statement. "Helping to protect the hard-earned pensions of city workers while also preserving the DIA's collection for all the people of southeastern Michigan are worthy components of a balanced overall settlement that will help ignite Detroit's renewal."