The DIA Post Detroit Bankruptcy? New provisions for funding the museum and pensions

The DIA Post Detroit Bankruptcy? New provisions for funding the museum and pensions

The city’s new Plan of Adjustment contains some details of private foundation contributions to the $815 million “grand bargain” – the deal that would maintain the Detroit Institute of Arts collections and other assets in charitable trust for the public and protect them from sale to fund pensions.

The yet-to-be-finalized deal also includes Gov. Rick Snyder’s proposed $350 million over 20 years from the state. Under the deal, private foundations would contribute $373.5 million, including $7.5 million they have already committed to the museum (see below for foundations and amounts pledged). The DIA, according to the Plan, would contribute $100 million:

The DIA undertakes to secure commitments for contributions of the $100 million (subject to the Present Value Discount) from the business community (and their related foundations), other foundations and individuals. As of the Closing, The DIA shall be responsible for any portion of the $100 million … for which is has not secured commitment from DIA Funders as of the Closing. However, The DIA shall have the right after the Closing to substitute for its obligation to pay any or all of he DIA Deficiency commitments from new DIA Funders or an increased funding commitment from an existing DIA Funder.

Pensions, under terms of the “grand bargain” would be managed by a new Receivership Transition Review Board that is independent from the city for at least 20 years. The DIA also would establish an “ad-hoc” governance committee with members representing the foundations funding the grand bargain, the city and the state of Michigan.

Meanwhile, bond insurer Syncora, which holds about $620 million of the city’s $18 billion debt, is seeking to subpoena a massive amount of information related to the museum’s assets, finances and management. No protective orders have yet been filed, nor are hearings scheduled about Syncora’s action.

If the “grand bargain” goes through under the proposed and most recent Plan of Adjustment, the museum “will provide an array of art programs at no or discounted costs to the residents of the State.” While the Plan doesn’t mandate what those could be, it does suggest that “such programs could include” exhibitions rotating through other Michigan museums and art centers, professional development programs with the Michigan Museums Association, an expansion of the Inside/Out program to place art reproductions in outstate locations, providing discounted art conservation services for other Michigan museums and developing an educational program based on the DIA’s collection that supports National Common Core Standards.

According to the court documents filed March 31, the “Foundation Funder Intended Funding Amount” plan is:

Community Foundation for Southeast Michigan $10 million
William Davidson Foundation $25 million
The Fred A. and Barbara M. Erb Family Foundation $10 million
Max M. and Marjorie S. Fisher Foundation $2.5 million*
Ford Foundation $125 million
Hudson-Webber Foundation $10 million
The Kresge Foundation $100 million
W. K. Kellogg Foundation $40 million
John S. and James L. Knight Foundation $30 million
McGregor Fund $6 million
Charles Stewart Mott Foundation $10 million
A. Paul and Carol C. Schaap Foundation $5 million*
Total $373.5 million, less credits to DIA Commitments (*$7.5 million)

Net Total $366 million

 

-By WDET’s Sandra Svoboda

@WDETSandra and nextchapter@wdet.org