News Column

Detroit City Council approves transfer of DIA art to charitable trust

June 6, 2014

By Joe Guillen, Detroit Free Press



June 06--The Detroit City Council today unanimously approved a transfer of city-owned art and other assets at the Detroit Institute of Arts to a charitable trust as part of a proposal to protect the art from being sold off in the city's bankruptcy case.

"Protecting the art is huge," Councilman Scott Benson said. "The fact that the city is losing assets doesn't excite me, but we also have to look at the bigger picture with this."

The transfer of DIA art is part of the so-called grand bargain, an $816-million deal that helps reduce pension cuts for Detroit retirees. The grand bargain is the centerpiece of emergency manager Kevyn Orr's plan to restructure Detroit when it exits bankruptcy.

Orr's restructuring plan still is subject to U.S. bankruptcy Judge Steven Rhodes' approval. A trial to confirm the plan is scheduled to start July 24.

The council has not been as receptive to other proposals from Orr to relinquish city assets. The council rejected his proposed 30-year lease of Belle Isle to the state, but a state emergency loan board ultimately approved the lease.

The council voted 8-0 Thursday to approve the DIA asset transfer. Councilwoman Raquel Castaneda-Lopez was absent.

Council President Brenda Jones, who in the past has spoken on the importance of Detroit keeping its assets, did not explain her vote in favor of the transfer during today's session. Jones also declined to comment after the meeting.

City Council members voiced support for the grand bargain in recent weeks as state lawmakers debated legislation to contribute $194.8 million toward the deal. Lawmakers approved the contribution this week, joining charitable foundations and the DIA in helping fund the arrangement.

Councilwoman Saunteel Jenkins said the council's approval was in line with its support of the grand bargain.

"We were all in Lansing advocating for the bills to be passed, so it would be an interesting turn of events for us to come back and vote no," Jenkins said.

The proposal to transfer the art to a charitable trust is an attempt to shield the art -- considered among the city's most significant cultural treasurers -- from creditors. Syncora, a bond insurer, is in the midst of an ongoing campaign in court to force the city to consider selling off the museum's prized artwork to pay down debts.

Butch Hollowell, the city's corporation counsel, said the council vote helps protect the art collection.

"This ensures the art collection...is housed here in the city of Detroit and for the benefit of the people of the city of Detroit and the region and the state," Hollowell said.

With council's approval on Thursday, Orr will now sign an order describing the transfer and file it with the bankruptcy court, Hollowell said.

In other business, the council approved a three-year city budget prepared by Orr's office. The budget, however, will be amended after the city exits bankruptcy.

This current fiscal year's general fund spending came in at $996 million. Over the next three years, Orr's budget calls for $937 million, $922 million and $927 million, respectively, in general fund spending.

Contact Joe Guillen: 313-222-6678 or jguillen@freepress.com.

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(c)2014 the Detroit Free Press

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Source: Detroit Free Press (MI)


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