Detroit Institute of Arts' Legal Brief

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION
In re:
CITY OF DETROIT, MICHIGAN,
Debtor.
Chapter 9
Case No. 13-53846
Hon. Steven W. Rhodes
RESPONSE OF THE DETROIT INSTITUTE OF ARTS TO
OBJECTIONS TO THE CITYS AMENDED PLAN OF CONFIRMATION
13-53846-swr Doc 5054 Filed 05/27/14 Entered 05/27/14 15:32:06 Page 1 of 30
TABLE OF CONTENTS
I. INTRODUCTION...............................................................................................................1
II. BACKGROUND.................................................................................................................3
A. The Museum Was Established For The Sole Charitable Purpose Of
Making Art Available To The Public. .....................................................................3
1. The Museum Begins With The Incorporation Of The DIA Corp.
As A Public Art Institute............................................................................. 3
2. The Museum Is Continued With The Formation Of The Arts
Commission Of The City Of Detroit With The City Acting As Co-
Trustee With The DIA Corp. ...................................................................... 4
3. The Museum Continues Under The 1997 Operating Agreement
With The DIA Corp. Assuming All Responsibilities For Operating
The Museum For The Benefit Of The Public. ............................................ 8
B. The Museum Is The Product Of More Than A Century Of Public And
Private Charitable Acts. ...........................................................................................9
C. A Century Of Public-Private Contributions Has Resulted In A Museum
That Benefits The People Of Detroit And The State Of Michigan........................10
III. ARGUMENT.....................................................................................................................11
A. The Museum Art Collection Is Not A City Asset That May Be Liquidated
To Satisfy The Citys Obligations. ........................................................................12
1. The Museum Art Collection Is Held In Charitable Trust. ........................ 12
2. The Museum Art Collection Is Protected By An Implied Trust. .............. 18
3. The Museum Art Collection Is Protected By The Public-Trust
Doctrine..................................................................................................... 19
4. The City is Bound by Promises, Representations and Restrictions
relating to Gifts to the Museum and the Museum Art Collection............. 19
B. Any Attempted Sale Of The Museum Art Collection By The City Would
Result In Protracted, Expensive Litigation. ...........................................................21
C. The DIA Settlement As Part Of The Plan Is In The Best Interests Of The
City And The Creditors..........................................................................................22
1. The Plans Treatment Of The Museum Art Collection Is Better
Than The Alternatives............................................................................... 22
2. The DIA Settlement Promotes Plan Feasibility. ....................................... 24
IV. CONCLUSION..................................................................................................................26
The Detroit Institute of Arts, a Michigan non-profit corporation founded in 1885 (DIA
Corp.), has served continuously for over 125 years as the steward of the museum now known as
the Detroit Institute of Arts (Museum) and as a trustee of a charitable trust protecting the
Museum. It currently manages the Museum under a 1997 Operating Agreement with the City of
Detroit (City). The DIA Corp. is a party to a proposed settlement (Grand Bargain or DIA
Settlement), which has been made part of the Citys Fourth Amended Plan of Adjustment
[Docket No. 4392] (Plan). The DIA Corp. submits this Response in support of the Plan and in
response to the objections filed by certain bondholders, creditors, and the insurers of City
obligations (Financial Creditors).
I. INTRODUCTION
For more than 125 years, the people of the City of Detroit and the State of Michigan (the
Public) have contributed their funds, family treasures, time, and goodwill to the Museum.
These contributions were given in charitable trust, by the people, for the people. As a result, the
Public has access to one of the worlds most important encyclopedic public collections of
artwork (the Museum Art Collection) housed in a building (the Museum Building)
specifically dedicated to the Knowledge and Enjoyment of Art.
As the Citys chapter 9 case and creditor demands posed an existential threat to the
Museum and the Museum Art Collection, the Court-appointed mediators broached the possibility
of a Grand Bargainunprecedented in its scope and ambition, benefiting the City, the Public,
creditors, and other interested parties in the bankruptcy case. After months of negotiations, the
parties agreed to a proposed DIA Settlement that would make $466 million available to satisfy
City obligations to certain creditors, preserve approximately $250 million of county millage
2
support, and safeguard the Museum Art Collection, and also serves as a condition of the State
contribution at a discounted present value of $195 million. The City included the terms of the
DIA Settlement in its Plan.
The Financial Creditors have filed Plan objections (Objections) arguing that the City
must instead sell, transfer, or convey some or all the Museum Art Collection. The Objections
contend the Museum Art Collection is a non-core asset whose value can be used to satisfy City
obligations and the Plan is not in the best interests of creditors because the DIA Settlement does
not derive sufficient value from the Museum Art Collection.
The Financial Creditors are mistaken. In determining whether to approve the DIA
Settlement, the Court normally considers the likelihood that the Museum or the Museum Art
Collection can be sold to satisfy the Citys obligations; the potential amount at stake in litigating
any such claim; the inherent difficulty in realizing value from a sale; and the best interest of the
City and its creditors. Each of these factors points to approval of the DIA Settlement as part of
the Plan. The law of trusts, contract, and equity, backed by over a century of history, belie any
suggestion that the City may sell or pledge the Museum Art Collection to satisfy City
obligations. Any such attempt would be fraught with litigation, delay, and legal and market risk,
jeopardizing the Citys ability to receive sale proceeds based on the aggregate estimated values
of individual objects. The DIA Settlement is in the best interest of the City and its creditors, as it
will preserve one of the Citys most important cultural institutions, an anchor of the Midtown
community, and an essential component of the Citys revitalization.
For these reasons, the Court should approve the DIA Settlement as part of the Plan.
3
II. BACKGROUND
A. THE MUSEUM WAS ESTABLISHED FOR THE SOLE CHARITABLE PURPOSE OF
MAKING ART AVAILABLE TO THE PUBLIC.
1. THE MUSEUM BEGINS WITH THE INCORPORATION OF THE DIA CORP.
AS APUBLIC ART INSTITUTE.
The DIA Corp. was organized in 1885 as the Detroit Museum of Art (the DMA)
through the efforts of public-spirited Detroit residents who donated funds, land and artwork and
who erected the Museums first building on Jefferson Avenue. The DMA was founded as a
public art institute pursuant to Public Act 3 of 1885 (the 1885 Act), which obligated the
DMA to faithfully use its property for art purposes and prohibited the DMA from selling,
encumbering, or disposing of its general art collection:
Section 15. All gifts, devises, or bequests made to any such
corporation, and all of its income, shall be faithfully used for the
purposes for which such corporation was organized; and no
dividend in money or property shall ever be made by such
corporation among its members.
Section 16. The character and purposes of such corporation shall
not be changed, nor its general art collection be sold, incumbered,
or disposed of, unless authorized by the legislature of this state . . .
.
(Exhibit 1 (P.A. 3 (1885)); see also MICH. COMP. LAWS 10759-10776 (1915); see also MICH.
COMP. LAWS 10777-10787 (1915).
Mirroring this legislative mandate, the DIA Corps initial articles of incorporation (1885
Articles) state that the DIA Corp. was established for the purpose of the:
founding of a public art institute in the City of Detroit, which may
acquire and hold such real estate as may be suitable for the site of
such art buildings as it may erect or maintain thereon; receive and
use such gifts, contributions, devises and bequests, as may be made
it, for art purposes; receive, acquire, collect and own paintings,
sculpture, engraving, drawings, pictures, coins and other works of
art, and may institute, maintain or assist schools for the teaching of
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art, and may do all other things authorized by [the 1885 Act], and
have and enjoy all the privileges and franchises given thereby.
(Exhibit 2 (1885 Articles)). The DIA Corp. was initially funded with, among other things, cash
gifts totaling $40,000 from 40 private individuals. (Id.).
In the ensuing years, it became clear that a combination of public and private support
would better serve the Publics interests. In 1899, legislation was passed to allow the City to
make appropriations to support the Museum. P.A. 429 (1899) (as further amended by P.A. 489
(1903)). Thereafter, the City supported the Museum, which helped ensure the art collection
would be freely available to the Public.
After several years of private/public cooperation, the Michigan Supreme Court held the
DIA Corp. was not a municipal agency and, thus, the City could not constitutionally commit its
credit to the private corporation even though it served a public purpose and provided a public
benefit. Detroit Museum of Art v. Engel, 153 N.W. 700, 703 (Mich. 1915).
2. THE MUSEUM IS CONTINUED WITH THE FORMATION OF THE ARTS
COMMISSION OF THE CITY OF DETROIT WITH THE CITY ACTING AS
CO-TRUSTEE WITH THE DIACORP.
To resolve the constitutional problem Engel created, the DIA Corp. agreed to place title
to some (but not all) of its assets in the City, including the existing Museum building, lands, and
Museum Art Collection, with the understanding that the City would assume the responsibility to
properly care for, maintain, and exhibit the Museum Art Collection for the Publics benefit. But
the DIA Corp. did not have the authority to transfer its assets. Under the DIA Corp.s enabling
legislation and Articles, the Museums assets could be used only for art purposes and could
only be disposed of in a way that best promoted and perpetuated the purposes for which such
corporation was originally organized. P.A. 3, 3, 15, 16 (1885). The Legislature enacted
Public Act 67 in 1919 (1919 Act) to allow the DIA Corp. to convey its property, including real
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estate and the art collection, to the City, subject to the express limitation that said property so
conveyed shall in the hands of said city be faithfully used for the purposes for which [the DIA
Corp.] was organized. (Exhibit 3 (P.A. 67 20 (1919)).
1
Although the Legislature had previously authorized cities to receive gifts of real and
personal property for public purposes, P.A. 380, 1 (1913) (the 1913 Act), the City lacked the
mechanism to undertake responsibility for the Museum. To permit the City to do so, the City
amended its Charter in 1918 (the 1918 Charter) to create a new municipal department, known
as the Arts Commission, to receive the DIA Corp. property, continue the Museums activities,
receive charitable gifts, and establish the Detroit Institute of Arts for the Publics benefit.
The 1918 Charter amendment creating the Arts Commission gave the City the authority
to take and hold charitable gifts for art purposes and the obligations to acquire, collect, own
and exhibit Museum quality objects and works and to build and operate a museum for the
Publics benefit.
2
In June 1919, the DIA Corp. agreed to convey title to land on Woodward
1
The 1919 Act was repealed in 1921 as part of the consolidation of the corporations law but contained a
savings provision that continued the effect of the act on corporations existing at the time. 1921 P.A. 84;
see also MICH. COMP. LAWS 9053 (1921).
2
The 1918 Charter provided in relevant part:
(a) The commission shall hold, in the name of the City, such real estate as may be
necessary for the accomplishment of its objects;
(b) Shall build, operate and maintain suitable buildings to be used for the exhibition
of paintings and works of art and auditorium purposes, to be known as the Detroit
Institute of Arts, and to which, under proper rules and regulations, the public may have
access free of charge . . . .
(c) Shall acquire, collect, own and exhibit, in the name of the City, works of art,
books and other objects such as are usually incorporated in Museums of Art.
* * *
6
Avenue, its art collection, and certain other assets to the City so that both public and private
support could continue to be used to care for, maintain, and grow an art collection for the Public.
(Exhibit 4 (Excerpts of the January 27, 1920 Board Minutes of the Trustees of the Detroit
Museum of Art)).
3
The parties understood that the Museums charitable purpose would continue and that the
City would be bound by the obligations created by law, statute, and agreement. The DIA Corp.s
contemporaneous board minutes reflect that the DIA Corp.s leaders expressly relied on the 1919
Act to prevent the City from utilizing the transferred property for any purpose other than the
public exhibition of the Museum Art Collection for the Publics benefit. (Id.) The DIA Corp.s
president, Ralph H. Booth, noted in the year preceding this transaction that the city in its new
charter has provided for an arts commission, contemplating that you will convey the property
and trusts you hold to the city, as the basis for the Detroit Institute of Arts. (Exhibit 5 (Excerpts
of DMAs 1918 Annual Report at 7)).
4
Similarly, at the time of the conveyance, Mr. Booth
reiterated:
[S]teps have been taken looking to the conveyance of our property
and collections to the City of Detroit with due regard for the trust
we hold and of the obligations attached thereto. . . . Under such
conveyance the property can only be used for such purposes as we
have received it or for some kindred purpose so indicated by the
Circuit Court. . . . If you should convey the real estate and the
collections to the city in conformity with the amended legislation it
(e) May, with the approval of the common council, in the name of the City, take and
hold, by purchase, gift, devise, bequest or otherwise, such real and personal property as
may be proper for carrying out the intents and purposes for which it is established.
(Exhibit 6 (Charter of the City of Detroit, Ch. XIX, Arts Commission 7 (1918))). The 1918 Detroit City
Charter is available online.
3
To avoid filing excessively voluminous exhibits with the Court, certain exhibits have been filed in
excerpted form. Full copies of these exhibits can be provided on request.
4
The DMA Annual Reports and DIA Annual Bulletins are available online.
7
should be noted that the property can be used only for such
purposes as this permits, and further the conveyance would be
made to the Arts Commission, who would hold the property in
behalf of the city for its uses in accord with the provision of the city
charter . . . .
(Exhibit 7 (Excerpts of DMAs 1919 Annual Report at 11-13)) (emphasis added).
With the DIA Corp. and the City acting together on behalf of the Museum, a historic
period of private-public collaboration for the Publics benefit began. As announced in the first
Bulletin of the Detroit Institute of Arts issued in October 1919:
This change marks the beginning of an epoch in the history of
Detroit when it shall become a civic function of the municipality to
foster art, by operating and maintaining a museum for the people
of the city. It is an era when art shall become in its broadest sense
democratic, with the museum and its valuable collections actually
belonging to the people.
(Exhibit 8 (Excerpts of October 1919 Bulletin of the Detroit Institute of Arts at 1)).
The City and the DIA Corp. collaborated on the construction of a new Museum Building
to house the growing Museum Art Collection. Completed in 1927, the buildings charitable
purpose was affixed to its faade: Dedicated by the People of Detroit to the Knowledge and
Enjoyment of Art. At the dedication of the Museum Building, Mr. Booth acknowledged the
charitable objects and purposes implicit in this statement of dedication:
[T]he beauty of art and the spiritual and moral beauties which lie
beyond and above the beauty of art alone, are as essential in the
life of a community as are the material comforts and modern
facilities and improvements which it is the pride of every
prosperous, enlightened community of today to furnish its citizens.
. . . And in this spirit today, in behalf of the people of Detroit, let
us dedicate this building to the lofty purpose for which it was
conceived: The Knowledge and Enjoyment of Art, believing that
we have seen the completion of a building that will stand for
centuries to come, because of the enduring character of art; and
that if we cling to our spiritual ideals we shall best advance the
high destiny of generations to come.
8
Detroit News, Monument to Detroit, Speakers Call New Art Institute, Oct. 8, 1927.
This collaboration continued through the Citys prosperous years. But as the Citys
fortunes declined, the City ceased providing funds for art acquisitions and experienced difficulty
meeting its obligations to care for the Museum Art Collection and Museum Building. As a result,
the DIA Corp. rededicated itself to the continued support of the Museum. This resulted in a new
partnership of the private and public sectors.
3. THE MUSEUM CONTINUES UNDER THE 1997 OPERATING AGREEMENT
WITH THE DIA CORP. ASSUMING ALL RESPONSIBILITIES FOR
OPERATING THE MUSEUMFOR THE BENEFIT OF THE PUBLIC.
After decades of (sometimes tempestuous) joint management and inadequate City
financial support, the City materially decreased its appropriation to Museum operations. Private
and state support helped maintain Museum operations, but as the State began to experience its
own financial difficulties, the State withdrew its support as well.
To address these threats to the Museum, the DIA Corp. and the City changed their roles
once again. The City understood that to obtain private support for the Museum and to build an
endowment, it was crucial that the DIA Corp., a non-profit entity, take over management of the
Museum. To address these and other issues, the City entered into an Operating Agreement with
the DIA Corp. in 1997 (Operating Agreement). Among other things, the Operating Agreement
confirmed that the Museum Art Collection was held in trust and could only be used for art
purposes. The Operating Agreement approved the Museums Collections Management Policy
(Exhibit 9 (Operating Agreement, F2(a))), which states that, in deaccessioning works from the
Museum Art Collection, the Museum must be ever aware of its role as trustee of the collection
for the benefit of the public. (Exhibit 10 (Collections Management Policy, V.A.)). The
Operating Agreement affirms the Collections Management Policy on deaccessioning, which
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prohibits using deaccessioning proceeds as operating funds. (Operating Agreement, F2(b);
Collections Management Policy, V.F.).
B. THE MUSEUM IS THE PRODUCT OF MORE THAN A CENTURY OF PUBLIC AND
PRIVATE CHARITABLE ACTS.
Over the course of more than 125 years, property, funds, and services have been given to
cultivate and preserve the Museum Art Collection, maintain the Museum Building, and keep the
Museum open to the Public for the Publics benefit.
The DIA Corp. has contributed artwork, funds and services to the Museum for the
Publics benefit. Private individuals, institutions and foundations have contributed property for
the Publics benefit, including works of art. Funds have been contributed to care for, maintain
and exhibit the Museum Art Collection, as well as to maintain and expand the Museum Building.
These donors have gone to great lengths to grow an endowment that will help ensure that the
Museum and its collection and services will be available to the Public in perpetuity. In most if
not all cases, donors gave their personal treasures or funds to the DIA Corp. with the express or
implied restriction or understanding that those objects and funds would be used solely to benefit
the Detroit Institute of Arts and the Public the Museum serves.
The State of Michigan has contributed significantly and generously as wellover $180
million just since 1989including an equity grant, purportedly to reimburse Detroit for
services provided to non-Detroit residents, because the City could not fully support Museum
operations. Wayne, Macomb, and Oakland Counties have also contributed. Under the Art
Institute Authorities Act, MICH. COMP. LAWS 123.1201 et seq., the counties electors approved
a millage to support the Museum through Art Institute Services Agreements with the DIA
Corp. They will remit approximately $23 - 25 million in each year over the ten-year period of the
millage to help support the Museum.
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The City also has contributed to the Museum and to its public and charitable purpose. On
and off over the years, as its financial circumstances permitted, it has supported Museum
operations. It helped finance and construct the Museum Building, dedicating it to the
knowledge and enjoyment of art, and later provided funds to help maintain and renovate the
Museum Building. The City also has appropriated specific funds to acquire works of art for the
Museum Art Collection, which (unlike other municipal artwork) were accessioned into the
Museums permanent collection. The City does not treat or account for these objects as assets
that are subject to sale. (Exhibit 11 (Excerpts of the City of Detroit 2012 Comprehensive Audited
Financial Report at 74, 95) (listing $29 million in City-owned works of art)).
C. A CENTURY OF PUBLIC-PRIVATE CONTRIBUTIONS HAS RESULTED IN A
MUSEUM THAT BENEFITS THE PEOPLE OF DETROIT AND THE STATE OF
MICHIGAN.
As a result of this century of public-private collaboration, the Museum has become a
world-class art instituteone of the top six encyclopedic fine arts museums in the United
Statesthat is a source of civic pride and an irreplaceable Public institution. The Museum Art
Collection comprises a multicultural and multinational survey of human creativity from
prehistory through the 21st century. The Museums iconic Detroit Industry murals by Diego
Rivera have been described as one of Americas most significant monuments to itself and a
summons to renewed greatness of the City.
The Museum is a center of arts and culture in Michigan and the anchor of the Citys
Cultural Center Historic District, helping to drive businesses, residents, and talented recruits to
Detroit. The Museum provides the premier venue for arts education in the Detroit area. Visitors
and students of all ages benefit from access to the unique and irreplaceable collection and
services provided by the Museum, including innovative educational and interpretive
11
programming and critical social services. The DIAs education programs reach approximately
150,000 participants annually. The Museum is home to the Mosaic Youth Theater and provides
programming to veterans at the Dingell Veterans Hospital, clients of Mariners Inn, and patients
at Childrens Hospital of Detroit.
The Museum is an economic and social engine in Detroit and southeast Michigan. In the
past year, the Museum drew more than 600,000 visitors, with more than 300,000 residents from
Macomb, Oakland, and Wayne counties taking advantage of the free admission policy adopted
following millage approval. These visitors spend millions of dollars in Detroit each year as a
result of their visits. The Museum has more than 28,000 members, 700 volunteers, and 300
employees, many of whom are City residents who pay property and other taxes in addition to
City income taxes. The DIA Corp. has an operating budget of approximately $32 million with a
large percentage of that total budget spent in the City.
III. ARGUMENT
In determining whether to approve the DIA Settlement as part of the Plan, the Court
normally considers the likelihood of success on the merits of any claim that the Museum or the
Museum Art Collection can be sold to satisfy the Citys obligations; the difficulty inherent in
realizing value from a hypothetical sale; and the best interests of the City and its creditors. See
Protective Comm. For Ind. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414,
424 (1968); 11 U.S.C. 901(a), 943(b)(6), 1129(b); see generally Bauer v. Commerce Union
Bank, 859 F.2d 438, 441 (6th Cir. 1988). As the DIA Corp. is prepared to show at the Plan
confirmation hearing, the City would be unlikely to prevail on any claim that it could sell the
Museum or the Museum Art Collection; the litigation associated with resolving these issues
12
would be complex and expensive and provide only speculative benefits; and the DIA Settlement
is in the best interest of the City and its creditors, because it is better than the alternatives.
A. THE MUSEUM ART COLLECTION IS NOT A CITY ASSET THAT MAY BE
LIQUIDATED TO SATISFY THE CITYS OBLIGATIONS.
1. THE MUSEUMART COLLECTION IS HELD IN CHARITABLE TRUST.
Under the Michigan Estates and Protected Individuals Code, a trust includes, but is not
limited to, an express trust, private or charitable, with additions to the trust, wherever and
however created. MICH. COMP. LAWS 700.1107(n). A charitable trust is defined as a
relationship where the trustee holds property for a charitable purpose. MICH. COMP. LAWS
14.252(b). Michigan law further provides that a charitable trust may be created for the relief
of poverty, the advancement of education or religion, the promotion of health, scientific, literary,
benevolent, governmental, or municipal purposes . . . or other purposes the achievement of
which is beneficial to the community. MICH. COMP. LAWS 700.7405(1). It is the purpose to
which the property is to be devoted which determines whether the trust is charitable and it is
sufficient if [the settlor] shows an intention that the property should be held subject to a legal
obligation to devote it to purposes which are charitable. Knights of Equity Meml Scholarships
Commission v. University of Detroit, 102 N.W.2d 463, 467 (Mich. 1960) (citation omitted).
There is no prescribed form for the declaration of a trust; whatever evinces the
intention of the party that the property of which he is the legal owner shall beneficially be
anothers is sufficient. Faulds v. Dillon, 204 N.W. 733, 735 (Mich. 1925) (citation omitted);
see Frost v Frost, 131 N.W. 60, 61 (Mich. 1911) (The creation of a trust does not depend upon
the use of a particular form of words, but it may be inferred from the facts and circumstances of
the case.). A trust may be established through the formation or organization documents of a
charitable entity:
13
The only document of record which could establish that an express
trust was created is the articles of incorporation of the Americana
Foundation. The articles of incorporation contain no explicit
declaration of a trust. However, the articles of incorporation do
show beyond reasonable doubt that a trust was intended to be
created.
In re Americana Foundation, 378 N.W.2d 586, 588-89 (Mich. Ct. App. 1985).
Charitable gifts and trusts are favorites of the law and of the courts, and the courts will
declare valid, and give effect to, such gifts and trusts where it is possible to do so consistently
with established principles or rules of law. In re Roods Estate, 200 N.W.2d 728, 738 (Mich.
Ct. App. 1972) (quoting 14 C.J.S. Charities 6, p. 427). A determination that a charitable trust
is created needs only a finding that some charitable purpose exists. Id. at 733.
Under these standards, the DIA Corp.s initial Articles of Incorporation established a
charitable trust for the benefit of the Public (the DIA Charitable Trust) with the DIA Corp as
the trustee. Under the 1885 Act and the DIA Corp.s Articles, the DIA Corp. was established as a
public art institute, whose purpose was the founding of a public art institute in the City of
Detroit which may receive and use such gifts, contributions, devises and bequests, as may be
made to it, for art purposes (1885 Articles); whose duty was the public exhibition of [the
corporations] collection of works of art (1885 Act 4); who was required to faithfully use
[a]ll gifts, devises, or bequests . . . for the purposes for which such corporation was organized
(1885 Act 15); and whose character and purposes could not be changed, nor its general art
collection [] sold, incumbered or disposed of . . . . (1885 Act 16) The 1885 Act, which
provided the DMA with special statutory authority to incorporate for the purpose of founding a
public art institute and required that the DMAs trustees publicly exhibit the art and use all of
the DMAs income and resources to advance its charitable purposes, had the effect of
establishing a charitable trust with the DIA Corp. as trustee.
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The transfer of the DIA Corp.s assets to the City, the creation of the Arts Commission,
and the 1918 City charter confirmed and continued the DIA Charitable Trust, and established the
City as a co-trustee. When the City accepted the transfer of the DIA Corp.s land on Woodward
Avenue, its art collection, and certain other assets, it did so subject to the 1919 Acts limitation
that said property so conveyed shall in the hands of said city be faithfully used for the purposes
for which [the DIA Corp.] was organized. P.A. 67 20 (1919). Under the 1913 Act and Chapter
XIX of the 1918 Charter, the Arts Commission had the same charitable duties and obligations of
the DIA Corp., including: the duty to build and operate a building for the exhibition of paintings
and works of art . . . to be known as the Detroit Institute of Arts, and to which, under proper rules
and regulations, the public may have access free of charge; the duty to acquire, collect, own
and exhibit, in the name of the city, works of art, books and other objects such as are usually
incorporated in Museums of Art; and the right with the approval of the common council, in the
name of the city, [to] take and hold, by purchase, gift, devise, bequest or otherwise, such real and
personal property as may be proper for carrying out the intents and purposes for which it is
established. (1918 Charter 7). Like the DIA Corp.s Articles, the Charter did not give the Arts
Commission the power to sell artwork for municipal purposes but, instead, required the Arts
Commission to take and hold such property as may be proper [to] carr[y] out the intents and
purposes for which it [was] established. (Id.).
The Operating Agreement also confirms and continues the DIA Charitable Trust. The
Operating Agreement recognized and affirmed that the Arts Commission and the DIA Corp. had
worked together for the benefit of the Museum and that the Operating Agreement was necessary
for the Museum to continue to advance its charitable purposes, including by increasing the
opportunity to secure federal, state, regional, county, City and other financial support, the
15
gifts of works of art to the [Museum] and the contributions to the [DIA Corp.s] endowment
funds held on behalf of the [Museum]. (Operating Agreement, Recitals, 6). The Operating
Agreement likewise recognized through the Collection Management Policy that the Museum Art
Collection was held in trust, that such artwork could not be encumbered, and that the policy of
the Museum required that any proceeds from deaccessions be used solely to acquire additional
artwork for the Museum Art Collection.
The acts of donors, who made contributions to advance the Museums charitable objects
and purposes, with the expectation that such contributions would be held for charitable purposes,
also confirm the existence of the DIA Charitable Trust. More than 100 years of deeds of gifts,
conveyance documents, and other records establish donors intentions to convey property to the
Museum to advance its charitable object and purpose, not to benefit the municipality generally;
for example, one of the museums largest early benefactors, Ralph H. Booth, required that all of
his gifts be permanently exhibited in the Museum at least eight months of the year. (See, e.g.,
Exhibit 12 (January 17, 1933 Letter from Arts Commission to Mayor Frank Murphy)). When he
served as the DIA Corp.s president, Mr. Booth remarked in the year preceding the 1919
transaction, the city in its new charter has provided for an arts commission, contemplating that
you will convey the property and trusts you hold to the city, as the basis for the Detroit Institute
of Arts. (DMA Annual Report 1918 at 7; see also DMA Annual Report 1919 at 11).
The City cannot now deny the existence of the DIA Charitable Trust. Under the doctrine
of election, a party cannot avail itself of the benefits of a trust relationship and then later reject it.
See Holzbaugh v. Detroit Bank & Trust Co., 124 N.W.2d 267, 268 (Mich. 1963). Likewise,
equitable estoppel applies where: (1) a party by representations, admissions, or silence,
intentionally or negligently induces another party to believe facts; (2) the other party justifiably
16
relies and acts on this belief; and (3) the other party will be prejudiced if the first party is allowed
to deny the existence of the facts. In re Beglinger Trust, 561 N.W.2d 130, 131-32 (Mich. Ct.
App. 1997); see also Wiersma v. Mich. Bell Tel. Co., 401 N.W.2d 265, 269 (Mich. Ct. App.
1986) (state may be estopped by its acts, conduct, silence, and acquiescence).
The City has acknowledged that it holds the Museum Art Collection in trust for the
Publics benefit. (See, e.g., Exhibit 13 (Letter from Mayor David Bing to Macomb, Wayne, and
Oakland Commissioners) (stating that the City hold[s] [the Museum Art Collection] in trust for
the public); Exhibit 14 (Excerpts of City of Detroit Proposed Capital Agenda FY 2013-14
Through FY 2017-18 at 63) (stating that the DIA collects and holds in trust for the people of
Detroit, Michigan, and the world, examples of the highest quality of fine arts from all times and
cultures throughout the world)). It has solicited and accepted funds and property for the
Museum; the DIA Corp., the State, the Counties, the taxpayers, foundations, institutions, and
others gave gifts of art and funds in reliance on the Citys representations and conduct; and the
Public would be harmed if the City were to sell, transfer, or convey any portion of the Museum
Art Collection to satisfy municipal debts and obligations. Indeed, the City has taken affirmative
steps over the years to convince the Public that charitable assets would not be sold because it
wished to ensure continued gifts to the Museum. (Letter from Mayor David Bing to Macomb,
Wayne, and Oakland Commissioners; Excerpts of City of Detroit Proposed Capital Agenda FY
2013-14 Through FY 2017-18 at 63). Whether by election or estoppel, the City cannot deny that
it holds Museum assets solely in trust.
Similarly, the City cannot avoid the effect of its dedication of property to charitable
purposes. [I]f a dedication is made for a specific or defined purpose, neither the legislature, a
municipality or its successor, nor the general public has any power to use the property for any
17
other purpose than the one designated, whether such use be public or private . . . . 2000 Baum
Family Trust v. Babel, 793 N.W.2d 633, 640 (Mich. 2010) (quoting Baldwin Manor, Inc. v. City
of Birmingham, 67 N.W.2d 812, 815 (Mich. 1954)). As the Michigan Supreme Court has stated
when describing the doctrine of dedication:
[I]t would be dishonest, immoral, or indecent, and in some
instances even sacrilegious, to reclaim at pleasure property which
has been solemnly devoted to the use of the public, or in
furtherance of some charitable or pious object. The law therefore
will not permit any one thus to break his own plighted faith; to
disappoint honest expectations thus excited, and upon which
reliance has been placed. The principle is one of sound morals and
of most obvious equity, and is in the strictest sense a part of the
law of the land. It is known in all courts, and may as well be
enforced at law as in equity.
Id. at 641 (quoting Patrick v. Young Mens Christian Assn of Kalamazoo, 79 N.W. 208, 211
(Mich. 1899)).
The City dedicated the Museum to art purposes. Although Michigan courts have not yet
applied this doctrine to personal property, it would be dishonest, immoral, and indecent for the
City to attempt to claim the right to sell any property for its own benefit that the City represented
the Museum would hold for the Publics benefit.
Nor can the City ignore the Michigan Attorney Generals formal Opinion issued on June
13, 2013 (Opinion No. 7272, the AG Opinion):
[T]he art collection of the Detroit Institute of Arts is held by the
City of Detroit in charitable trust for the people of Michigan, and
no piece in the collection may thus be sold, conveyed, or
transferred to satisfy City debts or obligations.
(AG Opinion at 22). Empowered by the Michigan Legislature to enforce charitable trusts under
MICH. COMP. LAWS 14.251, the AG Opinion confirms that the Museum Art Collection cannot
be used by the City to address municipal debts and obligations.
18
More compelling than any formal trust agreement, the Museum itself is the evidence of
the DIA Charitable Trust. It has served for more than a century as a vessel into which thousands
of donors, both public and private, have poured their goods and goodwill to advance the
knowledge and enjoyment of art. To borrow a maxim usually employed in tort law, the thing
speaks for itself.
2. THE MUSEUMART COLLECTION IS PROTECTED BY AN IMPLIED TRUST.
Implied trusts arise by operation of law as contradistinguished from those that arise
from agreements of the parties, and are raised by law for the purpose of carrying out the
presumed intent of the parties, or without regard to such intention for the purpose of asserting
equitable rights or frustrating fraud. Digby v. Thorson, 30 N.W.2d 266, 272 (Mich. 1948)
(citation omitted). A resulting trust is an implied trust that arises from presumed intent, where a
person makes or causes to be made a disposition of property under circumstances which raise an
inference that he does not intend that the person taking or holding the property should have the
beneficial interest therein . . . . Potter v. Lindsay, 60 N.W.2d 133, 135 (Mich. 1953). Moreover,
[a] gift [to a city] shall not be invalid because of an informality in the instrument evidencing the
gift, if the intent can be determined from the instrument . . . . MICH. COMP. LAWS 123.871.
Here, the City and the DIA Corp., acting separately and together from time to time for the
benefit of the Museum, (1) constructed a building dedicated to the knowledge and enjoyment of
art to house the Museum Art Collection; (2) solicited charitable donations for the Museum as a
separate entity for the benefit of the Public; (3) represented that works would be held in the
permanent collection for use and display at the Museum for the Public; (4) adopted policies that
strictly limited deaccessioning; and (5) represented to the Public that the City held the Museum
Art Collection in trust, leading to the conclusion that the donors and the Citys presumed intent
19
was that the City held the Museum Art Collection in trust and does not have a beneficial interest
therein that it may use for its sole benefit.
3. THE MUSEUM ART COLLECTION IS PROTECTED BY THE PUBLIC-TRUST
DOCTRINE.
Under the public-trust doctrine, governmental entities have a duty to preserve and protect
resources held in trust for the public. See Illinois Central R.R. Co. v. Illinois, 146 U.S. 387, 452
(1892) (noting certain navigable waters were not held for sale but in trust for the people of the
State). In declaring that the public trust doctrine is alive and well in Michigan, the Michigan
Supreme Court has stated:
The State may not, by grant, surrender such public rights any more
than it can adjudicate the police power or other essential power of
government. . . . The State of Michigan has an undoubted right to
make use of its proprietary ownership of the [land] in question
[subject only to the paramount right of] the public [to] enjoy the
benefit of the trust.
Glass v. Goeckel, 703 N.W.2d 58, 65 (Mich. 2005) (quoting Nedtweg v. Wallace, 208 N.W. 51,
53 (Mich. 1926)). Although the AG Opinion notes that no Michigan court has addressed whether
the public-trust doctrine applies to cultural property such as art held for public exhibition, strong
consideration should be given to expanding the scope of the doctrine to other public resources.
The City retains legal title to the Museum Art Collection, but consistent with the public-trust
doctrine, the Museum Art Collection is subject to the paramount right of the public to enjoy the
benefit of the trust. Glass, 703 N.W.2d at 65.
4. THE CITY IS BOUND BY PROMISES, REPRESENTATIONS AND
RESTRICTIONS RELATING TO GIFTS TO THE MUSEUM AND THE MUSEUM
ART COLLECTION.
A promise that the promisor should reasonably have expected to induce action of a
definite and substantial character that is relied on is enforceable to prevent injustice. Novak v.
20
Nationwide Mut. Ins. Co., 599 N.W.2d 546, 552 (Mich. Ct. App. 1999). Evidence of such a
promise may be taken from all the facts and circumstances. State Bank of Standish v. Curry, 500
N.W.2d 104, 109 (Mich. 1993). Policies and procedures may form the basis for an enforceable
contract or promise. See Rood v. Gen. Dynamics Corp., 507 N.W.2d 591, 606 (Mich. 1993);
Toussaint v. Blue Cross & Blue Shield of Michigan, 292 N.W.2d 880, 885 (Mich. 1980).
Similarly, under the 1913 Act, which permits cities to receive gifts for public purposes,
conditions, limitations, and requirements imposed on gifts to the City are enforceable, and no
provision in the 1913 Act allows a recipient city to sell or transfer a gift of real or personal
property given for such public purposes. MICH. COMP. LAWS 123.871.
Here, the City has described the Museum as a cultural resource of the State to solicit and
obtain hundreds of millions of dollars in funds and objects. (Exhibit 15 (June 25, 1975 Letter
from Mayor Coleman Young to Frederick Cummings) (stating that the City would seek State
funding in order to [open] the doors of the Detroit Art Institute to the people); Letter from
Mayor David Bing to Macomb, Wayne, and Oakland Commissioners). The City has approved
policies, both formal and informal, that prohibit the sale of objects accessioned into the
permanent collection to fund operations. (See, e.g., Exhibit 16 (Journal of the City Council, City
of Detroit May 22 Dec. 6, 1989 at 2551-52) (unanimously approving the Museums
deaccessioning policy)). The City has kept those objects off the Citys books and declared in its
annual financial reports that those works are held in trust. (See, e.g., Excerpts of the City of
Detroit 2012 Comprehensive Audited Financial Report at 74, 95; Excerpts of City of Detroit
Proposed Capital Agenda FY 2013-14 Through FY 2017-18 at 63). Donors to the Museum,
including the DIA Corp., had a reasonable and legitimate expectation that those policies would
be followed and that the City would not treat the promise contained therein as illusory, and
21
provided gifts to the Museum with express or implied conditions, limitations, and requirements
that objects be displayed at the Museum or be used to support the Museum. In addition, some
important gifts had express detailed restrictions on their use and transferability. (See, e.g.,
January 17, 1933 Letter from Arts Commission to Mayor Frank Murphy). Others that did not
have express restrictions still were made under deeds of gift and other documents to the Detroit
Institute of Arts for inclusion in the permanent collection, subject to policies that prohibit using
deaccession proceeds to pay even the Museums operating expenses or debts (Operating
Agreement, F2; Collections Management Policy, V.F.), or otherwise limited in the use to
which they could be put. These restrictions and conditions, both categorical and on an object-by-
object basis, are binding on the City, both under the common law and the 1913 Act. Any attempt
by the City to sell or transfer the Museum Art Collection or other property to satisfy municipal
debts and obligations would break the Citys promises and commitments or violate gifts
conditions, limitations and requirements.
B. ANY ATTEMPTED SALE OF THE MUSEUM ART COLLECTION BY THE CITY
WOULD RESULT IN PROTRACTED, EXPENSIVE LITIGATION.
Until recently, there has been little reason for the DIA Corp. or the City to define their
ownership interest in the Museum Art Collection or to address transferability restrictions. If the
City attempts to transfer its interest in the Museum Art Collection to satisfy creditors, the DIA
Corp. (and likely the Attorney General) would institute proceedings to prevent the City from
doing so. Based on the fact-intensive nature of the dispute and the need to address more than a
century of information regarding the Museum, the litigation would likely take years to resolve.
Donors and heirs also would challenge any purchasers right to continue to retain transferred
objects. The City would have to spend substantial time and resources in litigation whose likely
outcome is uncertain at best.
22
C. THE DIA SETTLEMENT AS PART OF THE PLAN IS IN THE BEST INTERESTS OF
THE CITY AND THE CREDITORS.
To determine whether a settlement is in the best interest of the City and its creditors, the
bankruptcy court must form an educated estimate of . . . all other factors relevant to a full and
fair assessment of the wisdom of the proposed compromise. Protective Comm., 390 U.S. at 424.
In this case, two factors stand out: The Citys and the creditors alternatives to the Plans
treatment of the Museum Art Collection, and how the Plans treatment of the Museum Art
Collection enhances the Citys ability to rehabilitate itself and perform its obligations under the
Plan. These factors support approval of the DIA Settlement as part of the Plan.
1. THE PLANS TREATMENT OF THE MUSEUM ART COLLECTION IS
BETTER THAN THE ALTERNATIVES.
Outside funders, which have no obligation to the City or its pensioners, will provide at
least $466 million to address the Citys obligations to the pensioners, but only on the condition
that the City transfer any interest it might have in the Museum and the Museum Art Collection to
the DIA Corp., which must keep them in the City in perpetuity. The Financial Creditors argue
that the funders largesse is not better than the creditors alternatives, because the City may and
must sell the non-core Museum and Museum Art Collection to satisfy the Citys obligations.
But Michigan law does not permit a court or creditor to force a sale of municipal assets outside
of bankruptcy. See MICH. COMP. LAWS 600.6021(1) (No execution may issue upon a
judgment against [any city].). Chapter 9s policies as well as state law protecting municipal
assets from levy militate against including a citys property in a chapter 9 case as a source of
repayment. See Newhouse v. Corcoran Irr. Dist., 114 F.2d 690 (9th Cir. 1940) (municipalitys
assets and property cannot be liquidated to pay creditors); cf. Faitoute Iron & Steel Co. v. City of
Asbury Park, 316 U.S. 502 (1942) (city has only its taxing power).
23
These limitations are even more pronounced when the subject property is imbued with a
charitable purpose and with charitable restrictions. See generally MCQUILLIN THE LAW OF
MUNICIPAL CORPORATIONS 47.21 (3rd ed. 2014) (A gift to a municipal corporation for a
charitable purpose cannot, after the municipality accepts it, be renounced or conveyed away so as
to defeat the charity.). Indeed, given the evident restrictions on its interest in the Museum Art
Collection, the City would be confronted outside of chapter 9 with the same inability to derive
value from the Museum Art Collection that it faces in this chapter 9 case. Cf. 11 U.S.C.
541(c)(2) ([A] restriction on the transfer of a beneficial interest of the debtor in a trust that is
enforceable under applicable nonbankruptcy law is applicable in a case under this title); 11
U.S.C. 541(d) (Property in which the debtor holds, as of the commencement of the case, only
legal title and not an equitable interest . . . becomes property of the estate under subsection (a)(1)
or (2) of this section only to the extent of the debtor's legal title to such property, but not to the
extent of any equitable interest in such property that the debtor does not hold.); Butner v. United
States, 440 U.S. 48, 55 (1979) (Property interests are created and defined by state law.). Thus,
the Financial Creditors suggestion that, outside of bankruptcy, the City acting rationally and
with due care likely would seek to monetize the Museum Art Collection or other purportedly
non-core assets and that this would result[] in higher recoveries for unsecured creditors is
incorrect. (Docket No. 4660 at 12).
In addition, any attempt by the City to place any object of the Museum Art Collection in
jeopardy would likely result in complex, lengthy litigation in which the City is unlikely to be
able to show that it can monetize any portion of the Museum Art Collection. Even if a court of
competent jurisdiction did not conclude that the entire Museum and Museum Art Collection
were held in charitable trust, the litigation that would be generated by any attempt to sell works
24
could take years as the donative intent and restrictions associated with each significant object
would be subject to separate examination.
The value the City derives from the DIA Settlement is not unreasonably low compared to
the alternatives; the City is not squandering an asset. (See Docket No. 4643 at 20). The $466
million that would be obtained from the DIA Settlement is well within the range of values that
properly reflect the risk of litigation and difficulty of collection. Moreover, the DIA Settlement is
a condition to the funding of the State Contribution. And the DIA Settlement amount reflects a
material percentage of the nominal value of the entire collection under any estimation.
Finally, the transfer of Museum assets as part of the DIA Settlement does not constitute a
fraudulent transfer. A fraudulent transfer is a transfer of an interest of the debtor in property with
actual intent to hinder, delay or defraud creditors or for less than reasonably equivalent value. 11
U.S.C. 548(a)(1). In this case, the transfer would occur only upon Court approval of the
transfer, after full disclosure of its purpose and effect, as a reasonable settlement of disputed
claims. Such approval would rule out any later attack on the transaction as a fraudulent transfer
by an implicit, if not explicit, determination that the transfer was made in good faith, not for any
fraudulent purpose, and for reasonably equivalent value in settlement of disputed claims. Any
such determination would be binding on the debtor and all creditors. See 11 U.S.C. 944(a).
2. THE DIASETTLEMENT PROMOTES PLAN FEASIBILITY.
The continued operation of a vibrant Museum would maintain a significant positive
economic impact on the fiscal stability and prospects of the City. The Museum generates at least
$32 million a year (its annual budget) of direct economic activity at no cost to the City. Museum
operations pump money directly into Detroits economy and result in indirect economic activity
from tourism and other spending, with a multiplying effect on City economic activity generally.
25
The City directly benefits from property and payroll taxes and the taxes associated with visitor
spending, which would be lost if the Museum were shuttered.
These direct economic and fiscal consequences are obvious but only touch the Museums
true benefit to the City. The Museum is a core feature of the Citys future. It is the cultural
cornerstone of Midtown Detroit, providing a stable anchor for the cultural district and for the
surrounding neighborhoods. The Museum draws economic investment to Midtown Detroit, is a
selling point for businesses attempting to attract and recruit talent to the City, and is an important
factor in decisions by businesses that are seeking to locate in the City. The current City Charter
declares that [t]he people have a right to expect city government to provide for its residents . . .
cultural enrichment, including libraries and art and historical museums . . . . See Charter of the
City of Detroit, Declaration of Rights at 1. With formal art educational programs being cut, the
need for the Museum is even more pronounced. A cultural institution is not a luxury; the
Museum is as important to the Citys future as it has been to its past.
The Financial Creditors consultants have told potential purchasers that the Museum is a
legacy City asset with no direct linkage to the Citys financial recovery and a tenuous cultural
relevance to Detroits current citizens, suggesting they believe that the Museum Art Collection
can be monetized without harming the Citys rehabilitation and viability. (See Corrected Motion
of Creditors for Entry of an Order Pursuant to Section 105(a) of the Bankruptcy Code Directing
the Debtor to Cooperate with Interested Parties Seeking to Conduct Due Diligence on the Art
Collection Housed at the Detroit Institute of Arts [Docket No. 3925] at Exhibit 5B, p.5). But as
the Financial Creditors seem to concede, any sale or transfer of the Museum Art Collection
would devastate the Museum (and result in a loss of the proceeds from the DIA Settlement). The
monetization of artwork to pay the Citys obligations would negatively impact the [Museum]
26
(Id. at Exhibit 5B, p.9), and the Museum likely would lose its accreditation and any reasonable
possibility of receiving funds and artwork from donors who saw prior gifts spent on City
obligations. The counties have said they would cancel the $250 million millage, and they
effectively control the flow of funds. With no other funding prospects, the Museum almost
certainly would close. If the Museum were forced to close, the City would be required to spend
millions of dollars to mothball the Museum Building, protect the sensitive, valuable Museum Art
Collection until it could be properly disposed of, and engage in other liquidation activities. The
Museums closure would have a significant adverse impact on the welfare of the City and its
citizenry, especially on the newly vibrant and growing Midtown area and the arts community
that the Museum anchors, impairing the Citys revitalization and the Plans feasibility.
IV. CONCLUSION
One of the attorneys for the Financial Creditors stated their position succinctly when he
said the Museum Art Collection is a glittering link to the glory days of Detroit that must yield
to grubby creditor losses. (5/15/14 Hr. Tr. at 26-27). He misses the point. The Museum is as
important to Detroits future as it has been to its past. The creditors never had any rights to the
Museum Art Collection or any expectation that such charitable property would be available to
satisfy their debts. This is the grubby reality to which the Financial Creditors must yield.
27
Respectfully submitted,
HONIGMAN MILLER SCHWARTZ AND COHN LLP
By: /s/Arthur T. OReilly
Arthur T. OReilly (P70406)
Scott B. Kitei (P78064)
Daniel N. Adams (P72328)
2290 First National Building
660 Woodward Avenue
Detroit, MI 48226-3506
Telephone: (313) 465-7628
Email: aoreilly@honigman.com
May 27, 2014 and
CRAVATH, SWAINE & MOORE LLP
Richard Levin
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Telephone: (212) 474-1000
Attorneys for The Detroit Institute of Arts
28
CERTIFICATE OF SERVICE
I hereby certify that the foregoing document was electronically filed with the Clerk of the
Court using the ECF system, and will send notification of such filing to all ECF participants
registered in this matter.
HONIGMAN MILLER SCHWARTZ AND COHN LLP
By: /s/Arthur T. OReilly
Arthur T. OReilly (P70406)
Scott B. Kitei (P78064)
Daniel N. Adams (P72328)
2290 First National Building
660 Woodward Avenue
Detroit, MI 48226-3506
Telephone: (313) 465-7628
Facsimile: (313) 465-7629
Email: aoreilly@honigman.com
May 27, 2014 and
CRAVATH, SWAINE & MOORE LLP
Richard Levin
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Telephone: (212) 474-1000
Attorneys for The Detroit Institute of Arts
INDEX OF EXHIBITS
Exhibit Number
Public Act 3 of 1885 1
DIA Corps initial articles of incorporation 2
Public Act 67 of 1919 3
Excerpts of the January 27, 1920 Board Minutes of the Trustees
of the Detroit Museum of Art
4
Excerpts of the DMAs 1918 Annual Report 5
1918 Charter of the City of Detroit 6
Excerpts of the DMAs 1919 Annual Report 7
Excerpts of October 1919 Bulletin of the Detroit Institute of Arts 8
1997 Operating Agreement 9
Museums Collections Management Policy 10
Excerpts of the City of Detroit 2012 Comprehensive Audited
Financial Report
11
January 17, 1933 Letter from Arts Commission to Mayor Frank
Murphy
12
Letter from Mayor David Bing to Macomb, Wayne, and Oakland
Commissioners
13
Excerpts of City of Detroit Proposed Capital Agenda FY 2013-
14 Through FY 2017-18
14
June 25, 1975 Letter from Coleman Young to Frederick
Cummings
15
Journal of the City Council, City of Detroit May 22 Dec. 6,
1989
16
13-53846-swr Doc 5054-1 Filed 05/27/14 Entered 05/27/14 15:32:06 Page 1 of 1
Exhibit 1
Exhibit 2
Exhibit 3
PUBLIC ACTSNo. 67. 125
[No. 67.]
AN ACT to amend act number three of the Public Acts of
eighteen hundred eighty-five, entitled "An act for the for-
mation of corporations for the cultivation of art," being
sections ten thousand seven hundred fifty-nine to ten thou-
sand seven hundred seventy-six, both inclusive, of the
Compiled Laws of nineteen hundred fifteen, by adding
thereto two new sections, to be numbered sections nineteen
and twenty.
The People of the State of Michigan enact:
SECTION 1. Act number three of the Public Acts of eight-
een hundred eighty-five, entitled "An act for the formation of
corporations for the cultivation of art," the same being sec-
tions ten thousand seven hundred fifty-nine to ten thousand
seven hundred seventy-six, both inclusive, of the Compiled
Laws of nineteen hundred fifteen, is hereby amended by
adding thereto two new sections numbered sections nineteen
and twenty, to read as follows:
SEC. 19. Any of the real estate of a corporation organized
under this act may be used for any purpose which the circuit
court in chancery, of the county in which said corporation is
situated determines to be a purpose kindred to that for which
the corporation is organized.
SEC. 20. Any corporation organized under this act situ-
ated in a city empowered to maintain a public art institute
like or similar to that described in this act, may convey all
or any of its property to said city upon such terms, in such
manner and at such time or times as may be agreed upon by
its trustees and the legislative body of said city ; and said
property so conveyed shall in the hands of said city be faith-
fully used for the purposes for which such corporation was
organized: Provided, however, That any real estate so con-
veyed may be used for a kindred purpose as provided in
section nineteen of this act. Said trustees are hereby empow-
ered, in the event of their conveying to the city all of the
property of said corporation, to wind up its affairs by taking
appropriate proceedings in the circuit court in chancery,
above mentioned.
Approved April 15, 1919.
Act amended.
Sections
added.
Use of
real estate.
Transfer of
property
to city.
Proviso.
AP' 13-53846-swr Doc 5054-4 Filed 05/27/14 Entered 05/27/14 15:32:06 Page 2 of 2
Exhibit 4
T
t
l
i
J
f
l
f
l
i
t
t
W
M
1
t
U
J
f
l
@
L
t
W
I
T
1
L
Detroit
Michigan January 27
1920
special
meeting
of the
Trustees of
the Detroit Museum
of
Art
was held at
the
University
Club at
oclock
There
iere
present
Messrs
Ralph
Booth
William
Gray
Horace
Caulkins Henry
Stevens Pope
Ferry Jr
William
13
Stratton
Francis
Paulus
and the
Secretary
communication
from the Arts Commission
was read
assuming
the
operation
and maintenance
of the Museum
beginning
July 1st
1919
as
per
the
request
of the
Trustees
In
behalf of the officers
Mr William
Gray presented
the
following
report
which was ordered
spread
upon
the
records
You will
recall that at
meeting
of the
members
of the
Association
held December
6th 1918
the
Trus
tees
were authorized to
convey
the
property.of
the cor
poration
both its
collection
of art and its
real estate
on Woodward
Avenue
to the
City
of
Detroit
and subse
quently
at
meeting
of the
Trustees on
February 18th
the President and
Treasurer
were authorized to
execute
and deliver to the
City
of
Detroit Deed of
Con.eycnce
of said
real
estate
the Deed to be
in such form and
with
such conditions
as should to
them
appear
sufficient
to
insure the use
of said
property
for
the
purpose
for
which
the Detroit
Mtiseum of Art
was
incorporated
or
for
some
purpose
kindred to
said
purpose
Your President
and
Treasurer
thereupon
conferred
withMr
Spalding
and he
prepared Deed which
contained
provision
for the
reversion of the
title to
the Detroit
Museum of Art
upon
the
happening
of either
of the
following
conditions
If
the
city
should at
any
time
use or
permit
the use of said
premises
or
any
part
thereof
for
any
other
purpose
than
the one
contemplated by
Charter
19
Ti
Title
iv relating
to an Arts
Commission of
the
pesent
charter
of the
City
of
Detroit
If
the
city
should fail within
given
number
of
years
to erect
and
complete
on said
premises
build
ing
costing
lot less than
an
agreed
sum
suitable for
the
housing
and exhibition
of works
of
art
or
DIAINSFO19856
If the
city
should at
any
time fail to
provide
for and continue the
proper care
mainten
ance and exhibition of the art collection then or
theieafter
belonging
to the
City
of Detroit
Your Treasurer had number of interviews
with
Mr William Webber and his
attorney
Janet
Swan
and
finally agreed
with them
upon
the
form
of the Deed
which Mr Weber would be
willing
to
unite in
signing
The matter was then taken
up
with
the Common
Council sitting
as Committee of the
whole
and all of the
councilmen and the
Corporation
Council
were
of the
opinion
that
no Deed would be
accepted except
one without conditions
Accordingly
your
Treasurer
agreed
to recomment the
delivery
of
the Deed with the
foregoing
conditions
eliminated
This situation was
explained
to the members of
the Association at their Annual
Meeting
held last
June
and Resolution was
adotd
authorizing
the
Trustees notwithstanding
this demand of the
city
to execute and deliver
Deed of the real and
person-
al
property
of the
Association
and
subsequently
on
Septomber
12th the Trustees authorized the
President
and Treasurer to make the
conveyance
to the
city
Accordiztgly
in November
your
President and
Treasurer
on behalf of the Detroit Museum
of
Art
executed and delivered
Warranty
Deed of the
real
estate and Bill of Sale of the collection
of
Art
both
running
to the
City
of
Detroit
and
delivered
the same to the
Arts
Commission
which in turn
transmitted the sane for
approval
to the
Common
Council This Deed
was
accepted by
the
Council
to
gether
with Deed from William
Weber and wife
covering
the undivided
half of the
northerlyThlock
the Council at
the same time
directing
the
Comptrol
ler-to
pay
off the
two
mortgages against
the
property
one
held
by
William
Weber and one
by
the Dime Sav
ings Bank
and
also to
pay
$4500
attorneys
bills to
James Swan
and Richard
Lawson attorneys
for Mr Weber
in the
pending litigation
At the
seine
time
the
Com
mon Council
accepted
the Bill of Sale of
the collection
of Art
On account of the
provision
for
the
payment
of
Mr Tlebers
attorney bills
the
Mayor
vetoed
the ac
ceptance
of the documents but the
resolution was
adopted by
-a unanimous
vote over his veto and in Dec
ember the transaction
entirely
closed
-the two mort
gages
paid
off and the Deeds
placed
on record
You will recall that Act
67
of the Public Acts
of the State
of
Michigan approved April 15th 1919
DIAINSFO19857
-------------
-.-----
.----
under which
authority
was
granted
for the
conveyance
by
Art Associations to the
municipality
of their
pro
perty
contained
provision
that the
property
so
conveyed
should in the hands of the
city
be
faithfully
used for the
purpose
for which the
particular
corpor
ation was
organized
In the Deed to the
City
of Detroit
it was
expressly
recited that the
conveyance
was exe
cuted and delivered under and in
pursuance
of said act
This
fact together
with the fact that the Deed was
delivered to the Arts
Commission
seemed to us suffi
ciently
to
give
assurance
that the
property
cannot be
used
excepting
for the same
purposes
as were
provided
for in the
incorporation
of the Detroit MuseS of
Art
or some
kindred
purpose
as
provided
in the Act of the
Legislature
referred to
The
Secretary gave
report
of the audits made
by
the Detroit
Trust
Company covering
the
period
from
July
1918 to Jund
30
1919
MOVED supported
and
carriqd-
that the
expenditure
of $335
in additiBn to the
$500
appropriated
at the
meeting
of
iiay
2nd for the
purchase
of laces be
approved
The
Secretary
was authorized to make such entries on the
books of the
corporation
as a-re
necessary
to make them
comply
with
present
conditions
iv0VED supported
and carried that
the
painting
Child
with
Kitten
by
William
Owen
be
purchased
for the sum of $7500 from the
General
Membership
and Donations Fund
Mr
Ferry
offered the
following
resolution
vihieh was unan
imously
adopted
VUWREAS all of the
property
and collections of
the Detroit Museum of
Art
with the
exceptions
of its
invested
trust
funds
have
been
conveyed
and trans
ferred to the
City
of Detroit to be aaministered
by
the
newly
created Arts Commission of the
City
of
Detroit
and
V1IFEAS it is believed that the
following
enumerated
objects
can
be obtained
by
the continuance of
present
cor
poration
____ __
DIAINSFO19858
cc
To
promote public
interest in and
appreciation
of art in Detroit
To
cooperate
in
every way
with the
Detroit
Institute of
Arts
and to
augment
it
collections from
membership
funds and
contributions
To administer the funds and
endowments now
in the hands of the
corporation
and
to
encourage
and
receive in trust and to administer
future
gifts
end
legacies
Now
therefore be it
.RESOLVED
that this
corporation
vtith its member
ships
end funds be continued and also
be
it
BESDLVED
that committee
of two be
appointed by
the President himself
acting
as exofficio
member
for
recommending
of such
changes
and revisions as will best
carry
out the intentions herewith
expressed
Inaccordacrwith this resolution President Booth
appointed
Mr
Ferry
and
Mr
Gray
as committee for the revision of the
bylaws
The
Secretary
was instructed to call
meeting
of
all mem
bers of the
corporation
for
Friday
February
6th
at IL for
the
purpose
of
taking
such action as is
necessarywith
reference to
the future of the Museum
corporation
Meeting adjourned
Resiectfully
DIAINSFO19859
Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8
Exhibit 9
OPERATING
AGREEMENT
for
THE
DETROIT
INSTITUTE OF
ARTS
Between
THE
CITY OF
DETROIT
and
FOUNDERS
SOCIETY
DETROIT
INSTITUTE
OF ARTS
City
Contract
No 77009
IAI NSP00029O
OPERATING
AGREEMENT
for
THE
DETROIT
INSTITUTE OF ARTS
TABLE
OF CONTENTS
Page
RECITALS
SOCIETYS
REPRESENTATIONS AND
WARRANTIES
Societys
Authority
Society
Has No
Conflicting Contractual
Obligations
Society
Has No
Conflictof
Interest
Society
Has No
Conflictwith Law
DEFINITIONS
444
Agreenient
e3.
Associates
City
City
art collection
City
Charter
City
Council
CIt
je garage
and lots
e3
Clty
intellectual
properti
10
Clam
11 Con7i77ission
Contract
terir
.4
13 DIA
.4
14
DIA
building
.4
15 DIA
records
.4
DIA
properties
.4
17 Effectivedate
Firy
Street
properties
.4
Force
n/eure event
20
Fredericklotgroundlease
.5..
21
Society
22
Societ
art
collection
23
Societyintellectualproperty
...
24
Society
properties
-5-
-5-
DIAINSP00029I
OPERATING AGREEMENT
BETWEEN ThE CITY
OF DETROIT AND
FOUNDERS
SOCIETY DErRorr
INSTITUTE OF ARTS
City Contract No 77009
CITYSREPRESENTATlONSANDwARNTlEs
-6-
Citys
Authority
City
Has No
Conflicting
Contractual
Obligations ....
-6-
CIty
Has No
Conflictof
Interest.....
CityHasNoConflictwithLaw
......... -7-
ENGAGEMENT OF
THE
SOCIETY RELATIONSHIP
BETWEEN THE PARTIES
...
.... -7-
Engagement
..7_
lndependentContractorRelationship
.....
-7-
Scope
of the
Societys
Duties
........
-8-
Final
Accounting
Under 1994
Contract..
-8-
RETENTION OF
ASSETS BY THE
CITY
-8-
CityRetainsTitietoAssets
-8-
Acquisition
of NewAssets
-8-
Licensing
of
Intellectual
Property
8-
AGREEMENTSBYTHESOCIflY
-9-
Compliance
with
Laws
Standards
-9-
Societys Duty
to
Manage
the
City
Art Collection
-10-
Situs of the
Collection Loans of Works of Art
-10-
Societys Duty
to
Inventory
the
City
Art Collection
-11-
Societys Duty
to Maintain
the DIA
Building
and
Parking
Lots
-11-
Additions Improvements and Modifications
to
the
DIA
Building
and
Parking
Lots
11
SocietyHasNoRighttoEncumber
-11-
Societys Duty
to Pursue
Funding -12-
Use of
Revenues
12
10
Societys
Duty
to Provide
Operating Expenses. -12-
11
Societys
Pre-Effective
Date Liabilities
-12-
12
Solicitation of Donations
of Works of
Art Certain Art
Acquisitions
12
13
Societys
Duty
to Establish Disaster
Recovery
Plan
-12-
14
Societys
Duty
to
Establish Risk
Management
Programs
-13-
15
Societys
Duty
to
Place Certain Insurance
Policies
-13-
16
Societys
Duty
to Place
Uquor
Uability
Insurance
-16-
17
Modifications to Terms
or Conditions of Insurance
Policies
RequiredbySubsectionsFl5andFI6
-16-
18
Societys Duty
to
Administer Insurance
Policies Handle Insurance
Claims and
Manage
Insurance
Proceeds
-16-
DIAl NSP000292
OPERATING AGREEMENT
BETWEEN ThE CITY OF
DETROIT AND
FOUNDERS
SOCIETY DETROIT INSTITUTE
OF ARTS
City
Contract
No 77009
19
Societys
Duty
to Reimburse the
City
for
the Placement of
Other
Insurance Policies
17
20
Societys Duty
to
Renegotiate
Insurance
Coverages
-17-
21
Societys
Subcontractors to
Carry
Certain Insurance
Coverages
-17-
22
Societys
Waiver of
Subrogation
-17-
23
Society
to Follow
Generally Accepted
Accounting Principles -17-
24
Compliance
with Executive
Orders
Construction
Contracts
-17-
25
Residency Requirement
18
26
Affirrrtatlve Action
18
27
NonDiscrimination
Policy 19
28
Non-Discrimination Clauses in
Subcontracts
-19-
29
EmployeeSelectionProcedures.........
-20-
30
RecruitmentofVolunteers
-20-
31
Purchase of Utilities
Other than
Electricity
Water and
Sewage
Services and
Regular
Trash Collection
Services
-20-
32 Purchase of
Electricity
Water and
Sewage
Services and
Regular
Trash Collection
Services
20-
33 Use of the
DIA
Building
and
Parking
Lots for
City-Sponsored
Functions
20
34
Continuation and Possible Future
Expansion
of the
DIAs Hours -21-
35
GeneralAdmissiontotheDlABuilding -21-
36
Policy
Amendments
Require
Commission
Approval
-21-
37
Societys
Duty
to Submit
Quarterly
Reports
on
Employment
Iviatters
21
38
Societys
Duty
to Submit Internal
Quarterly
Financial
Statements
22
39
Societys Duty
to Submit Annual
Reports -22-
40
Societys
Duty
to Submit
Audited Financial
Statements
-24-
41
Correction of
Societys Reports
24-
42
Societys Duty
to Provide Other
Information
Requested
by
the
Commission
24
43
Societys Duty
to
Notify
the Commission
Concerning Emergent
lIdlatters
24
44
Societys Duty
to Establish
Document Retention
Policy
-24-
45
SocietysDutytoSubmittoAudit
-24-
46
SocietysDutytoSubmittolnspection
-24-
47
Societys Duty
to
Appear
Before the
Commission
-25-
ROLE OFTHE
COMMISSION
-25-
Arts Commission
Oversight
of
Agreement -25-
Commission
to Prescribe the Form
of
Receive and
Review
Societys Reports
II
DIAl NSP000293
OPERATING AGREEMENT
BETWEEN ThE CITY OF DETROIT
AND
FOUNDERS
SOCIETY DETROIT INSTITUTE
OF ARTS
City
Contract No
77009
Commission
May
Request
Additional Information
-25-
Commissions
Duty
to
Renegotiate
Insurance
Coverages
-25-
Commissions
AuditRights -25-
Inspection
Rights 25
Commission
to Receive Review and
Approve
Certain
Society
PoliciesandAmendmentsmereto
..
-26-
Commissionto
Receive Review and
Approve
Certain
Amendments to
Society
Articles of
Incorporation
and
Bylaws
-26-
Hearings 27
10 Commissionto Review and
Approve
the
Societys
Director and
Deputy
Director of the DIA
27
11
CommissiontoReporttotheMayor -27-
12 Commissionto Evaluate
Societys
Services and
to Provide
Evaluation
to
the
City
Council and to the
Society -27-
AGREEMENTS THE CY
28
Citys
Pre-Effective Date Liabilities
-28-
Citys Duty
to
Operate
and Maintain
Cultural Center
Garage ..
-28-
Feesfor Central
City
Services.....
-28
Annual
Grantbythe City 28
Citys Duty
to Transfer Funds Received
by
the
City
for the Benefit
of the DIA
29
CitySaleofCertainBonds -29-
Citys Duty
to Place Certain Insurance
Policies -30-
Modifications to Terms
or Conditions of Insurance Policies
RequiredbySubsectionH7
-32-
First-Party
Claims in Excess of
Insurance Limits
-32-
10
Citys
Waiver of
Subrogation 32-
11
SocietysPurchaseofUtilities
32
12
Citys Responsibility
for
Property
Taxes
on the D1A
Properties
and
the
City
Art Collection
33
13
City
to Transfer
to the
Society
Certain
Tangible
Personal
Property
AssetsforDlAOperations
-33-
14
Limited Warranties
33
15
Assumption
of Leases and
Service Contracts
-34-
16
Use of DIA Records
34
17
Society
Retains Title to Its
Assets
-34-
ESTABLISHMENT AND GOVERNANCE OF
THE
SOCIETY
ABOLITION OF
..OIIsIT COMMITTEES
34
BoardofDirectors
-34-
Certain Amendments
Require
Commission
Approval
-35-
-iv-
DIAl NSP000294
OPERATING
AGREEMENT
BETWEEN THE CITY OF
DETROIT AND
FOUNDERS
SOCIETY DETROIT
INSTITUTE OF ARTS
City Contract No
77009
Ethical Standards
36
AbolitionofJointCommfttees
36
INDEMNITY
ASSUMPTION
OF RISK..
......
-36-
Indeninification
Obligation
36
Assumption
of
Risk
37
SafeguardingofPersonalProperty
..................
-37-
Indemnification
Not Umited
by
Workers
Compensation
or
Employee
Benefit Acts
37
Duty
to
Notify
38
Duty
to
Cooperate
38
EMPLOYMENT
MA1rERS
38
Employment
of
Non-Unionized
City
Employees .. -38-
Employment
of Unionized
City Employees
Negotiation
with Labor
Organizations
10
LimitedRighttoReturntoCityEmployment
-44-
Financial
Responsibility
for
Pensions Earned
by
Former
City
Employees
47
lRSApprovalofPerisionPlans
-47-
Hiring
of
Personnel
47
Societys Director and
Deputy
Director of the DIA
-47-
CooperationinEmployeeTransitions
-48-
TERM
OFAGREEMENT
TERMINATION
-48-
Initial Term
Extensions of Term
48
Termination
Material Breach
.49.
Cure
49
Resolution of
Disputes
-49-
EffectofTerminatiori
50
ARBITRikTION
Arbitration
51
Covenant Not
to Sue
51
NO
ASSIGNMENT
NO
THIRD-PARTY
BENEFICIARIES
-52-
No
Assignment
52
NoThirdPartyBeneficiaries
52
DIAl NSP000295
OPERATING
AGREEMENT
BETWEEN THE CITY
OF DETROIT
AND
FOUNDERS
SOCIETY DETROIT
INSTITUTE
OF ARTS
City
Contract
No 77009
AMENDMENTS
WAIVERS
FURTHER
ASSURANCES
...........
-52-
Amendments
.....
-52-
Waivers of
Performance
-52-
Further Assurances
APPLICABLE
LAW RULES OF
CONSTRUCTION
-53-
Applicable
Law
-53-
Contra
Proferentum
Not
Applicable
-53-
Headings
-53-
Severability
-53-
NOTICES
Addresses
-53-
Change
of Address
54-
Delivery
Methods
-54.
FORCE
MAJEURE
OTHER
EXCUSED
NON-PERFORMANCE
-54-
Force
Majeure
54
Other Excused
Non-Performance
-55-
INTEGRATION CLAUSE
-55-
Integration Clause
55
SIGNATURES
56-
-vi
DIAl NSP000296
OPERATING
AGREEMENT
BETWEEN THE CITY
OF
DETROIT AND
FOUNDERS
SOCIETY DETROIT
INSTITUTE
OF ARTS
City
Contract
No 77009
Page
of 57
OPERATING
AGREEMENT
for
THE
DETROIT
INSTITUTE OF ARTS
THIS
AGREEMENT made
on the 2th
day
of
December
997 and
effective
as
of the
effective
date which is defined
below is between
the
City
of Detroit
City
municipal corporation
organized
and
existing
under the
laws of the
State
of
Michigan
acting by
and
through
its Arts
Commission
CommIssion
and
Founders
Society Detroit Institute
of Arts
Society
private
nonprofit corporation
organized
and
existing
under
the laws of
the State of
Michigan
RECITALS
The
Detroit
Institute of
Arts
0/A is
unique cultural institution
owned
by
the
City
and
located therein
The 0/A
has
long
and rich
history The
City
and
the
Society desire to
continue to
expand the tradition
of
excellence that
exists at
the 0/A
The 0/A
ranks
among
the
leading museums in the
world
today
because
of its
extensive
art
collections and
community educational
programs
The
0/A
having
building
of
600000
square feet is the fifth
largest
art
museum
in
the
United
States Each
year
the
0/A
hosts
special
exhibitions as
well
as
numerous
community
educational
and
corporate
events
For
many years
the
Commission
has
contracted with the
Society to
provide
services
far the
operation
of
the 0/A
The
Society
also has
provided substantial
financial
support
and
volunteer
services to the
0/A
The
historical
contracting
arrangement
however
has
resulted
in
among
other
things
dual
sets of
employees
and
personnel
procedures as well as dual
administrative
systems
and
procedures
including financial
accounting
and
purchasing procedures and dual
auditors
The
City
desires to retain
the
professional services of the
Society
to
provide
uniform
system
of
management of
and
fundraising for
the
0/A
so as to
continue to
promote
and
maintain the
excellence
of the
0/A The
City
shall
continue
to
own
the
City art
collection
including
works of
art
acquired
prior or
subsequent
to the
effective
date as well as the
0/As
building 0/A
bui/ding
located
at 5200
Woodward
Avenue
Detroit
Michigan 48202
and other
0/A
properties
described
below
The
parties
believe
that this
agreement
for the
operation
of
the 0/A
by
the
Society
will
produce cost
efficiencies
for the
City
improved
business
DIAl NSP000297
OPERATING
AGREEMENT
BETWEEN
THE CITY OF
DETROIT
AND
FOUNDERS
SOCIETY
DETROIT INSTITUTE
OF
ARTS
City
Contract
No
77009
Page of 57
efficiencies
and overall
effectiveness of 0/A
operations
improved
employee
morale
and
long-term career
development
opportunities
for
employees
increased
gifts
of
works of
art to the 0/A
and increased
contributions
to the
Societys
endowment
funds held
on behalf of
the
0/A increased
opportunity
to
secure
federal
state
regional county City
and other
financial
support
an
ability
to
respond more
quickly
to
changing conditions
circumstances
and
priorities continuation
and
possible
future
expansion
of
the 0/A
hours
and
number
of
open galleries
and
an
ability
to
host
additional
special
exhibitions
all of which
are
expected
to
contribute
to the
long-term viability
and
stability
of the 0/A
as
first-class fine
arts museum
The
City
and the
Society are
parties
to
two
existing contracts one with
term
commencing
on
July 994 the
1994
contract and
Deaccession
Form
Contract dated
as
of
November
992
together
with the
1994
contract
the
contracts
This
agreement
between
the
City
and the
Society
will
supplant
the
contracts
between the
City
and the
Society
and the
Society fully
agrees
to
the
abrogation
of
its
contracts with the
City as set forth in
Exhibit
hereto
The
Corporation
Counsel of
the
City
has
rendered
an
opinion to the effect
that
the
applicable
law
does
not
prevent
the
transaction embodied
herein
Among
the
purposes
for
which the
Society
was founded
are
assisting
the
Commission
in the
operation
of the
0/A
performing
such
services
as
may
be
requested by
the
Commission
promoting
the
publics interest in
and
knowledge
of art
matters
by classes
lectures exhibits and
such other
methods
as
may
be
thought
to be
appropriate
to that
end
and
soliciting
receiving
and
administering
money
works of
art and
other
property
The
Society
is
firmly
committed
to the
goal
of
diversity
in all
ranks of its work-
force
11 Section
7-301 of the
City
Charter
establishes an
Arts
Department headed
by
the
Commission which
consists of
seven members
Section
7-301
provides
in
part
that the
arts
department shall
maintain and
operate
the
Detroit Institute
of
Arts The
parties
acknowledge
the
important
role
played by
the
Commission in
overseeing
the
0/A and
agree
that its
oversight
role is not
diminished
by
the
terms of this
agreement
NOW
THEREFORE the
City
and the
Society agree
as follows
-2-
Al NSP000298
13-53846-swr Doc 5054-10 Filed 05/27/14 Entered 05/27/14 15:32:06 Page 10 of
13
OPERATING
AGREEMENr
BETWEEN
ThE CITY OF
DETROIT
AND
FOUNDERS
SOCIETY
DETROIT
INSTITUTE OF
ARTS
City Contract No
77009
Page 10 of 57
Consistent with
the
objective
of
promoting
the
excellence of
the
014
and its
facilities
the
Society
covenants
that it
shall not
undertake to
manage
or
operate any museum or art institution
other
than the 0/A
Societys Duty
to
Manage
the
City
Art
Collection
The
Society
shall be
responsible for
managing
the
City
an
collection In
accordance
with the
0/As
Collections
Management
Policy as in effect
as
of the
execution
date of this
agreement
and
as modified from
time to
time
hereafter in
accordance
with this
agreement
Such
policy
shall be
consistent
with
state-of-the-art
practices that are
generally recognized
accepted
and
followed
by leading
fine
arts museums The
0/As
Collections
Management
Policy
in effect
as of the
execution date
of this
agreement
has been
approved by
the
Commission
and
the
Society
shall
submit
any proposed modification
to the
Commission
for its
approval
of
same The
Society
shall
also submit
any
such
proposed modification to
the
City Council which
shall be
deemed to
have
approved
of such
modification
unless the
City
Council
adopts resolution
rejecting
such
proposed modification
within
forty-five 45
days
after
receipt
of such
proposal
Title
to the
City
an collection
remains with the
City however the
Society
shall have
the
right
to
acquire and
dispose
of
works of
art
in
the
City
an collection
in
accordance with
the 0/A
Collections
Management
Policy
Any
funds
received from
disposition of works of
art in the
City
an collection
shall be
used
solely
to
purchase other works
of art for the
Cityan collection This
Subsection
F2
contains the
Societys
obligations
with
regard
to
collections
management
and
pursuant
to the
Abrogation
Agreement as set forth in
Exhibit
as of the
effective date
will
supersede
the
Deaccession
Form
Contract dated
as of November
1992 between the
City
and the
Society
the
deaccession
policies
and
procedures
of which
have been
incorporated into the
OIA Collections
Management
Policy
Sltus of the
Collection Loans of
Works of An
The
Society
represents
and
warrants that
during
the
contract term the
0/A
building
shall
continue to be the
primary
location for the
exhibition
of and
storage
of
the
City
an collection
This
Subsection
F3 shall
not limit
or diminish the
Societys
ability
to loan
portions
of the
City
an collection in
accordance with
the 0/As
Collections
Management
Policy
-10-
DIAl NSP0003O6
13
OPERATING
AGREEMENT
BETWEEN THE
CITY OF
DETROIT AND
FOUNDERS
SOCIETY DETROIT
INSTITUTE
OF ARTS
City
Contract
No
77009
Page
56
of 57
IN
WITNESS
WHEREOF the
City
and the
Society
by
and
through
their
authorized
officers and
representatives
have
executed
this
agreement as of the date
stated
on the first
page
of this
agreement
iq/
Si
Ee
pt
AZ9d
1/UL
T4
it
CITY OF
DETROIT
ARTS
DEPARTMENT
By
Maurice
Parrish
Title
Interim
Director
THIS
AGREEMENT
IS NOT
VALID OR
AUTHORIZED
UNTIL APPROVED
BY
RESOLUTION
OF THE
DETROIT
CITY
COUNCIL AND
SIGNED
BY THE
PURCHASING
DIRECTOR
WITNESSES
CITY
OF DETROIT
ARTS
COMMISSION
ti2
By
Alfred
Taubman
Title
President
FOUNDERS SOCIETY
DETROIT
INSTITUTE
OF
ARTS
Title
anoogian
-56-
Al NSP000352
13
OPERATING
AGREEMENT BETWEEN
THE CITY OF
DETROIT AND
FOUNDERS SOCIETY
DETROIT
INSTITUTE OF ARTS
City Contract No 77009
Page
57 of 57
THIS
CONTRACT
WAS APPROVED
APPROVED
BY LAW
DEPARTMENT
BY
THE CITY
COUNCIL ON
PURSUANT TO SEC 6-406
OF THE
CHARTER
OF THE CITY
OF DETROIT
Date
November
26
997
By_______________________________
hylli/A
mes
Title
Corporation
Counsel
PURCHASING
DIVISION
FINANCE DEPARTMENT
By
No
7o
Date
Title
Purchasing
LYirector
hereby certify
that
an
appropriation
has
been made
to cover the
expenses
to be
Date
/iL/T
urL
ontract
V/ei 7.
tw
Title Finance
Dir
ctor
DETO7/75000.1
version 11 of
72666.10
-57-
Al NSP000353
13
Exhibit 10
DETROtT
INSTITUTE
OF ARTS
Detroit Institute of Arts
Collections
Management
Policy
accepted
JMCC 03/06/9
revised JMCC 11/06/91
accepted
BOT 09/16/92
accepted
AC 09/30/92
accepted
BOT 04/19/95
accepted
AC 05/24/95
revised CC 09/03/98
accepted
BD 11/18/98
accepted
AC 12/03/98
revised 05/12/05
accepted
CC 09/07/05
accepted
BD 11/16/05
accepted
AC 04/19/06
updated
10/24/2011 and 02/13/12
IAI NSP005276
DETROIT INSTITUTE OF ARTS
COLLECTIONS MANAGEMENT POLICY
TABLE OF CONTENTS
INTRODUCTION
II PURPOSE
III THE COLLECTIONS COMMITTEE
lv
ACQUISITIONS
General Criteria
Acceptance
Considerations
Provenance Review
Presentation
to
the Collections Committee
Collections Committee Recommendation
Urgent
Decisions
Media Announcements of
Important Acquisitions
Registration
of
Approved Acquisitions
Gift and
Bequest
Procedures
Purchase Procedures 10
DE-ACQUISITIONING
11
General Criteria 11
Policy
Overview 11
Recommendation of Curator 11
Compliance
with
Legal Requirements
12
Manner of
Disposition
12
Use of Net Proceeds from
Disposition
13
Records 13
Procedures 13
VL LOANS 14
General Criteria 14
Long-term
Loans to the DIA 15
Outgoing
Loans 15
VII RECEIPT OF OBJECTS PLACED IN THE CUSTODY OF THE MUSEUM 16
Short-Term
Custody
of
Objects
not for Loan or
Acquisition
16
Receipt
of
Objects
for Loan and
Acquisition
17
Unsolicited
Objects
17
VIII PERSONAL COLLECTIONS 17
IX CARE AND CONTROL OF THE COLLECTIONS 18
RECORDS 18
XI ACCESS TO THE COLLECTIONS 19
XII INSURANCE AND RISK MANAGEMENT 20
XIII INVENTORIES 20
XIV DEFINED TERMS 20
Page
IAI NSP005277
The Detroit Institute of Arts
Collections
Management Policy
INTRODUCTION
The Director of the Detroit Institute of Arts
the Museum
is
responsible
to
the
Mayor
and the Arts
Commission for the
pmdent
management
of the Collections of the Detroit Institute of Arts Pmdent
management
dictates the need for written
policies
and
guidelines
This
document
which is in
compliance
with the museums Professional Practices Policy and Guidelines is intended to fulfill that need
Recommendations for
changes
to this
policy
are
encouraged
at
any
time
they
are
needed and
may
be
submitted to the Director
by
any
staff or Board
member
or Commissioner
Significant changes
will be
recommended
by
the Director and reviewed
by
CC
for recommendation of
approval by
the Board of Directors
or
its Executive Committee
which are
referred to
interchangeably as
BD
and the Arts Commission
AC
In unusual
circumstances
waivers of
procedural requirements
herein
may
be
granted by
the Director
or
in the Directors
absence
the Chief
Operating
Officer
COO
Such waivers shall be documented in the files of the
Registrar
and the minutes of the CC
All
museum
collections
management procedure
and
policy
will be based
on
American Association of
Museums
recommendations
from which the museum receives its accreditation
II PURPOSE
The Mission of the Museum
The DJA
creates
experiences
that
help
each visitor find
personal meaning
in
art
DJA
Strategic
Intents
Provide and
promote
an
attractive visitor-friendly experience
Provide
variety
of
engaging experiences
and
learning opportunities
for all
Cultivate and sustain
strong
community partnerships
Promote what the Museum is and what it offers of
collections programs
and exhibitions
Employ
the best class of
technology
Develop
and
empower
the best diverse staff and volunteers
Deliver the
highest
standards for
caring
for and
developing
collections
Create and maintain
superior
Museum
facility
Achieve and maintain
long-term
financial health
10 Allocate
resources
creatively
and
effectively
Statements
defining
the
goals for
and assessments
of specific departmental
collections are to
be
developed by respective
Curators with the
support
of the Directors Office These statements
shall be submitted
by
the curatorial
department
heads to the Chief Curator for submission to the
Director for
approval
These shall be reviewed and
updated
at
least
every
three
years
and be used
for
shaping
the collections of the Museum
Page
IAI NSP005278
III
THE
COLLECTIONS COMMITTEE
General Criteria
The Collections Committee
CC
acts
in
an
advisory capacity
to
the Board of Directors
BD
on
the
acquisition
and
de-acquisition
of art
objects
and
on
collections
management policy
The CC
operates
under
procedures
established
by
the
BD
with the concurrence of the Arts Commission
AC
The CC shall consist of
chairperson
and
not
fewer than
two
other members of the BD
Individuals who
are
members of the
Corporation
but who
are
not Directors
may
also be
appointed
to serve as members of the Committee
At the Annual
Meeting
of the BD
or
at the first
regular meeting
of the BD
thereafter
the
Chairperson
with the
approval
of the
BD
shall determine committee
appointments
If not
serving as an appointed
member of the
CC
the BD
Chairperson
the Director and
such other individuals as shall be
designated by
the
BD
shall each be an ex-officio
member of the CC and shall have all
rights privileges
and
responsibilities
of the office of
committee
member
except
the
right
to vote or to be counted for
quomm
The CCwill meet
approximately
six times
per year preferably preceding
the BD
meetings
All
actions of the CC will be
by majority
vote of members
present
Minority opinions
may
be recorded in the CC minutes and
reported
with its recommendations to the BD All BD
acquisition
and
de-acquisition
resolutions will be
reported
to the AC as informational All
collections
management policy changes
will be
reported
to the
BD
and AC for
approval
The CC will consider matters under its
purview
make recommendations
in
regards
to
specific
actions
to
the
BD
and
act as an
advisory body
to
the Director
on
collections
policy
The
following
will be under the
purview
of the CC
Acquisitions by gift bequest purchase transfer
and
exchange
as
well
as
objects
collected
in the
past
for the Museum and which
were never formally
accessioned
De-acquisitions
IV ACOUISITIONS
General Criteria
Accessioning
is the formal
process
used to
accept
and record
acquisition objects
into the collection
Items accessioned
by
the Museum into the
collections
whether
by gift bequest purchase transfer
or
exchange
are
intended to be retained for the
long
term and
are
reviewed
according
to the
following general
criteria
The
object
is consistent with the
general
collection
goals
of the Museum and the
specific
goals
of the curatorial
departments
The
object
is useful for exhibition
purposes
The
object
possesses
potential
for research and
scholarship
The
object
retains its basic
integrity
and is
in
reasonable state of
preservation
Page
IAI NSP005279
The
provenance
of the
object
has been
thoroughly investigated
Any potential challenges
to
legal
title have been identified and addressed
Acceptance Considerations
In
addition to these
general criteria
the
following
factors shall be considered
Is the
purchase price/donor
stated value fair and reasonable
Is the
object
encumbered
by
conditions
imposed by
donor
By
intellectual
property rights
i.e copyright trademark
etc
Is
appropriate storage space
available
Will
acceptance
of the
object appear
to
give
undue commercial endorsement
Rather than
purchasing
the
object might
it or similar
object
be obtained
by gift
or
bequest
Provenance Review
The curator
recommending
an
acquisition
or
loan must consider the works
provenance
and make
all reasonable
inquiries
to determine
that the
museum can
obtain clear title if
purchase
or
gift
is
contemplated
that
proposed
lender has clear title at the time the loan is made
Provenance Guide for all
Acguisitions
Inquiry
and Research
Museum staff shall
rigorously
research the
provenance
of work of art
prior
to
acquisition
Such research should
include
but is not
necessarily
limited
to
determining
The
ownership history
of the work of art
The countries in which the work of art has been located and when
The exhibition
history
of the work of
art
if
any
The
publication history
of the work of
art
if
any
Whether
any
claims to
ownership
of the work have been made
Whether the work of art
appears
in relevant databases of stolen art
The circumstances under which the work of
art
is
being
offered
to
the
museum
For all
acquisitions
Museum staff should make concerted effort to obtain
accurate written documentation with
respect
to the
history
of the work of
art
including import
and
export
documents For
any
acquisition
of
single
work of
art over
$75000
that is
coming
from
abroad
the Museum shall obtain all recent
import
and
export
documentation
Page
IAI NSP005280
Museum staff shall
request
that
sellers
donors and their
representatives provide
all available information and
documentation
as well as
appropriate
warranties
regarding
the
origins
and
provenance
of work of art offered for
acquisition
Disclosure and Dissemination of Information
For
significant acquisitions
Museum staff shall strive
to
publish promptly
an
image
in
print
or electronic form
or representative images
in the case of
large
groups
of
objects
and relevant
provenance
information
which will thus be
readily
available
to an
international audience
Legal
Considerations
The Museum must
comply
with all
applicable local state
and federal U.S
laws
most
notably
those
governing ownership
and
title import
and other
issues critical to
acquisition decisions including
the Native American Graves
Protection and
Repatriation
Act
NAGPRA
and the Convention on Cultural
Property Implementation
Act
CCPIA
Since the status
of
work
of
art under
foreign
law
may
bear on its
legal
status under US
law
Museum
staff
shall
review
relevant
foreign
laws
before making
an
acquisition
The Museum staff and tmstees
may
need to seek
legal
advice from outside
counsel with
regard
to
specific acquisitions
Nazi/World War II Era
The Museum will be
guided by
the
Report
of the AAMD Task Force
on
the
Spoliation
of
Art
during
the Nazi/World War
II
Era
1933-1945
and the
AAM
Guidelines
Concerning
the Unlawful
Appropriation
of
Obj
ects
During
the Nazi Era In
particular
the Museum
will observe the
following guidelines relating
to the Nazi/World War II Era for
gifts
bequests
and
purchases
Curatorial
departments
should
independently
research and ask donors
or
executors
in
the case of
bequests
and sellers of works of art to
provide
provenance
information for works that
were
likely
to
have been in German
occupied
Europe
between 1933 and 1945
Where information is
incomplete
for
gift bequest
or
purchase
curatorial staff
should undertake additional research
prudent
or
necessary
to resolve the Nazi-
era
provenance
of the work
All
research efforts shall be documented
In
the
absence of evidence of unlawful
appropriation
the
gift
of
purchase may
proceed
Where there is credible evidence of unlawful
appropriation
without
subsequent restitution
the Museum shall
not
acquire
the work until
taking
further action to resolve these issues
If the Museum
subsequently
determines that work in its collection
was
unlawfully appropriated during
the Nazi
era
without
subsequent
restitution
the
Museum should seek to resolve the manner with the claimant
in
an
equitable
appropriate
and
mutually
agree
able
manner
Warranty and Indemnification
Page
IAI NSP00528
When
purchasing
works of
art
the Museum will seek
representations
and warranties
from the seller that the seller has valid title and that the work of art is free from
any
liens
claims and encumbrances The Museum will also seek indemnification for full refund
for the work of art in the event of
any
breach of
warranty
These
requirements apply
to all
purchases
of
$10000
or more and to other
purchases
as
appropriate
in
the
judgment
of
the
curator or
Counsels Office
Acuuisition
of
Archaeological
Materials and Ancient Art
Principles relating
to the
Acquisition
of
Archaeological
Materials and Ancient Art
The Museum is committed to the
responsible acquisition
of
archaeological
materials and ancient art
The Museum believes that the artistic achievements of all civilizations should be
represented
in art
museums
which uniquely
offer the
public
the
opportunity
to
encounter works of art
directly
in the context of their
own
and other
cultures
and where these works
may
educate inspire
and be
enjoyed by
all The interests
of the
public
are served
by
art museums around the world
working
to
preserve
and
interpret
our
shared culture
The Museum
deplores
the illicit and unscientific excavation of
archaeological
materials and ancient art from
archaeological
sites
the destruction
or
defacing
of
ancient monuments and the theft of works of art from
individuals
museums or
other
repositories
The Museum is committed to the
principle
that all
collecting
be done
according
to
the
highest
standards of ethical and
professional practice
The Museum
recognizes
that some works of art for which
provenance
information is
incomplete
or
unobtainable
may
deserve
to
be
publicly displayed
preserved
studied and
published
because of their
rarity importance
and
aesthetic merit The Museum affirms that art museums have an
obligation
with
respect
to
such works of
art
which in the absence of
any
breach of law
or
of
these
Principles
may
in some cases be
acquired
and made accessible not
only
to
the
public
and to scholars but to
potential
claimants as well
The Museum
recognizes
that
acquisition
decisions are
legal
and
ethically
complex
and
require weighing
many
legitimate
interests and
priorities
that
may
at times conflict
IJNESCO Convention
In
recognition
of the November 1970 UNESCO convention on the Means of
Prohibiting
and
Preventing
the Illicit
Import
and
Export
and Transfer of
Ownership
of Cultural
Property
the Museum shall not
acquire any
archaeological
material or work of ancient art known to have been stolen from
museum or
religious
or
secular
public
monument or
similar institution
Article
7b of the
Convention
In
addition
the Museum shall not
acquire
any
archaeological
material or work of ancient art known to have been
par
of an
Page
IAI NSP005282
official
archaeological
excavation and removed in contravention of the laws of
the
country
of
origin
The Museum shall
not
acquire
any
such works of
art as
described in
subparagraph 2a
above that
were
removed after November 1970
regardless
of
any
applicable
statutes of limitation and
notwithstanding
the fact that the
did
not
accede
to
the Convention until 1983
Incomplete
Provenance
Even after
rigorous research
it
may
not be
possible
to obtain sufficient
information
on
the
recent
history proposed acquisition
to
determine
securely
whether the
acquisition
would
comply
with
applicable
law and the Guidelines in
Section VITA above
In
such
cases
the Museum shall use
professional
judgment
in
determining
whether
to
proceed
with the
acquisition recognizing
that the work of
art
the culture it
represents
scholarship
and the
public
may
be
served best
through
the
acquisition
of the work of art
by public
institution
dedicated to the
conservation exhibition
study
and
interpretation
of works of
art This
may
be the case for
example
if
The work of art is in
danger
of destmction or
deterioration
or
The
acquisition
would make the work of
art
publicly accessible
providing singular
and material contribution to
knowledge as
well
as
facilitating
the reconstmction of its
provenance
thereby allowing
possible
claimants
to come
forward
In
considering
such
acquisitions
Museum staff shall also take into account
any
other factors that bear
on
the
appropriateness
of the
acquisition notably
Whether the work of
art
has been outside its
probable country
or
countries of
origin
for
sufficiently long
time that its
acquisition
would not
provide direct
material incentive to
looting
or
illegal
excavation minimumoften
years
The exhibition and
publication history
if
any
of the work of art
Information Obtained
Subsequent
to
Acquisition
If the Museum
gains
information
subsequent
to
acquisition
that establishes another
partys
claim
to work of art
acquired
after June 2004
even though
this claim
may
not be enforceable
under U.S
law
the Museum shall seek an
equitable
resolution with the other
party
The Museum
will consider the
following options
transfer
or
sale of the work of
art to
the
claimant payment
to
the
claimant
loan or
exchange
of the work of
art
or retention of the work of art
Presentation
to
To
present
proposal
for
accessioning
to the
CC
the Curator shall submit the
appropriate
documentation to the
Department
of the
Registrar
which assures that all
required
documentation is
in hand and is
responsible
for
legal compliance
The
Registrar
will
provide
list of
proposed
acquisitions
for Director
approval
and CC recommendation
to
accept
\Vhen
possible
the
object
should be
physically present
at the
meeting
for the CC members to view The CC will consider the
artwork and make its recommendation
at
the
next
regular meeting
unless there is need for
Page
IAI NSP005283
urgency
The Curator
involved or
his/her
representative
must
be
present
at
this
meeting
to
present
the
proposed acquisition
The Curator will secure outside
opinions
if warranted The resolution of
the
BD
will be
reported
to the AC as informational
Collections Committee Recommendation
The CC will
formally
recommend the
acceptance
or
rejection
of
acquisitions
in
the
following
cases
When the
object
or collection has an estimated value of
$25000
or
more
the CC shall vote
individually
on
each of these
objects
The Director has the
authority
to
accept
all works of
art for
acquisition
valued at less than
$25000
providing
all other criteria
are
met Such
objects accepted by
the Director will be
reported
at the next
CC BD
and AC
meetings
for
information
purposes
All
related-party practices
shall be
disclosed
and will
require special
vote
by
the
CC
for
example
when
gift
or
purchase
is offered
by
the artist
or
his/her
family
when
gift
is
offered
by an
art
dealer
when
gift or purchase
is offered
by related-party
i.e
employee
of the
Museum
or
CCBD
or AC member
The artwork offered
represents
new area of
collecting
Urgent
Decisions
If an
urgent
decision
regarding proposed acquisition
cannot wait until the next CC or BD
Meeting
the Director
may
elect to canvass the
Chairpersons
of the CC and the
BD
and two additional CC
and BD members for
vote
Members
polled
and the circumstances will be
reported
at
the
next set
of
meetings
The BD will receive the CCs recommendations The BDs resolutions will be
reported
to the AC as informational
Urgent
BD
decisions
may
also be
polled by obtaining
the
approval
of
the
Chairperson
and two additional members
Media Announcement of
Important Objects
The
acquisition
of
an
important object
will be announced
promptly
to the media The
object
will be
placed
on exhibition as soon as it can be
safely installed
and it will be listed in the normal manner
in the Annual
Report
Important objects
will be illustrated
Registration
of Approved Accessions
Original purchase
documents will be
sent to
the
Registrar
who will establish control file for
monitoring timely accessioning
The
Registrar
will
assign
permanent
accession numbers
immediately following approval by
the BD
Upon receipt
of
permanent
accession
numbers
acquisitions
will transfer from The Detroit Institute of Arts
holdings
to the
City
of Detroit
collection
report
on all final
dispositions
will be
provided
to the next AC
meeting
and to the
City
as
required by
the
Operating Agreement
between the
City
of Detroit and Detroit Institute of Arts
The
Registrar
will maintain collection Files
Gifts and Beguests
The Director has
authority
to
accept
all
year-end gifts
in advance of the next scheduled CC
Meeting Accessioning
will still take
place according
to
procedure
All such actions will be
reported
to
the
following CC BD
and AC
Gifts from
dealers staff
Committee or Board
members
and from the artist of his own
work
or
from the artists
family
will be disclosed
at
the
CC
and will
require special
vote
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IAI NSP005284
21
When
an
extensive collection from
one
donor is offered it will be noted
as
such
to
the CC
The
acceptance
of all
gifts
and
bequests
shall be without restriction No commitment should
be made
as to
exhibition attribution
or
placement
of the
gift
While it is the Museums
intention to accession for
long-term
use
and
preservation
no
guarantee
shall be made that
the
gift
or
bequest
will be retained
by
the Museum
in
perpetuity
There shall be no
exceptions
to
this
policy
unless
any
such restrictions
or
special provisions
are
recommended
by
the CC and
approved by
the BD The
Registrar
must be
notified
and the action of the BD
will be
reported
to
the AC
as
informational
Objects
offered as fractional
gifts
of undivided interest will be noted as such and
require
individual
vote
by
the CC and BD
Bargain
Sales
part gift
part
purchase
will be noted as such and
require signed purchase
agreement
and
an
outside written
appraisal
Use of the Museums Deed of Gift is
mandatory
and shall be
signed by
the
legal owners
or
his/her
duly
authorized
agent
before the
object
can
be accessioned
Any exception
to this
policy requires
CC recommendation and BD
approval
For
bequests
copy
of the
will
all
codicils
and the letters
testamentary
should be obtained and
kept
in
the records of the
Registrars permanent
collection
All
gifts
and
bequests
shall be
officially acknowledged by
the
Director
after
acceptance by
the BD
Tn
case of
gifts
or
bequests
that the museum does not intend to
accession descriptive
inventory
will be
reported
to the CC and BD twice
year by
the
Registrar
after Curators
have reviewed the
objects
All such
gifts
or
bequests
will be
registered
with the
Registrar
Within three months of arrival on
premises
all
gifts
and
bequests
not intended for
accession into the collection will be
acknowledged
as
such
by
letter from the
Curator
with
copies
to be filed with the
Registrar
the
Director Accounting
and the
Development
Departments
The Museum is not
obliged
to
accept gifts
or
bequeathed
items that are not
appropriate
for its collections
10 Under
no
circumstances will Museum staff
give
an
appraisal
of
objects
Donors
seeking
values for their
proposed gifts
will be referred to the Art Dealers Association of America
or
another
appropriate
source for
obtaining
an
appraisal
Donors
may
be advised that IRS
stipulations
may
require
them
to
obtain written
appraisal
when
filing
their income
taxes
and that the Museum is
required by
IRS
regulations
to
sign
the donors IRS 8283 Form
thereby acknowledging receipt
and
acceptance
of the donors
gift
of art
However
the
Museum should
never
interpret
IRS
regulations
but advise donors
to
seek advice from their
tax
preparer
for
current
IRS mles
on
gifts
of works of
art to
non-profit organizations Upon
the Museums
receipt
of IRS Form
8283
for
signature
copy
of the
completed form
including
any
appraisal
furnished
to
the
IRS
will be retained
by
the
Registrar
as
part
of the
object
record The
original
will be
signed by
the Chief Financial Officer/VP of Finance and
Administration
CFO
and returned to the donor in
timely
manner
11 If Conservation
Report
has been written for
proposed gift
it will be
provided
to the CC
andBD
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10
IAI NSP005285
21
Purchases
Funds specifically
allocated to the Museum for the
purchase
of
objects
and other monies
that
may
become available for
purchases
shall be maintained
by
the BD The CFO with
the Chief Curator and/or the VP for Collections and Exhibitions
Strategies
will review and
assign
the use of art
acquisition funds notifying
the
Registrar
who will assure that the
object
is
properly
credited in Museum records
Acquisition
funds must be in
hand
designated
or
promised
in
writing
before CC
approved acquisition
is
presented
to the
BD If it is
necessary
to borrow from other
acquisition
funds
BD will be
apprised
of the
fund from which the
money
is to be borrowed and of the
expected payback period
The
CFO will inform the
Registrar
of
any
such
arrangement
Use of the Museums
purchase
agreement
is
mandatory
and shall be
signed by
the
legal
owners
or
his/her
duly
authorized
agent
before the
object
can
be
presented
to
the BD and
thereby purchased
and accessioned The
language
on the
purchase
agreement
will reflect
any
special
terms
agreed
upon
by
the Museum and the
seller
such as extended time
payment
The CC and the
BD
will receive brief written
report/critique
from the Curator on the
objects significance
for the Museum
collection as
well
as
written
report
on
its
physical
condition from the Conservation
Department
for all
purchases priced
at
$25000
or above
Tn certain circumstances
such
as an
auction
or
when the CC
or
BD is not scheduled to
meet
the Curator
may request
prior
authorization from the Director to act within
approved
dollar limits In
anticipation
of such
an
event
the Curator
having
first obtained
determination from the CFO of the restricted fund to be
used
if
any
makes written
proposal
to the
Director stating
the case for the
proposed purchase
For amounts of
$25000
and
over
if the Director
concurs
he will obtain the documented
approval
of the
Chairperson
and two additional members of the CC
as
well
as
the
Chairperson
and two
members of the BD total of The results will be
reported
to the
Registrar
who will
proceed
with the
accessioning process according
to
policy
DE-ACOUISITIONING
General Criteria
The Museum
may
deem it
appropriate
to
de-acquisition
known as
deaccession objects
from the
collection
In
considering objects
or
groups
of
objects
the Museum must be ever aware of its role
as
tmstee of the collection for the benefit of the
public Objects
are
acquired
for
permanent
retention in the collections and not with the
thought
of
disposal However
when it is deemed
pmdent
to do
so deaccessioning
may
be considered The act of
deaccessioning
works of art from
the Museums collections
requires exceptional
care
reflects
museum policy
and should
preserve
the
integrity
of the collections Care should be taken to
research
wherever
possible
the
original
donors intent
prior
to
deaccessioning Deaccessioning
should be carried out with at least the
same
degree
of
pmdence
as is exercised in the
acquisition
of
objects
The
following Policy
and
Procedures
apply
to
objects
that have
previously
been accessioned into the Museums collections
Policy
Overview
Objects
in
the collections should be retained
permanently
if
they
continue to be useful to the
purposes
and activities of the
Museum
if
they
continue
to
contribute
to
the
integrity
of the
collections
and if
they
can be
properly stored preserved
and used
Objects
may
be deaccessioned
when the above conditions no
longer exist
or
if
it is determined that such action would
ultimately
Page
11
IAI NSP005286
21
improve
or
refine the
collections
upon
compliance
with all
legal requirements
Recommendation of Curator
Each
object being
considered for
deaccessioning
must meet
certain
criteria
as
evidenced
by
the
written recommendation of the
appropriate Curators
to the Director and the
CC
based
upon
one or
more of the
following
The
object
is not relevant to and consistent with the Museums
purposes
and activities
The
object
no
longer
retains its
physical integrity
its
identity
or
its
authenticity
The
object
is
an
unnecessary
duplicate
of other
objects
in the
collection including objects
that
are
repetitive
of similar themes in similar medium
The
object
cannot
be
adequately
cared for in
professionally acceptable
manner
Compliance with
Legal
Reuuirements
Objects
must be deaccessioned
strictly
in accordance with
legal requirements Legal compliance
is
the
responsibility
of the Museum
Registrar
The Museum must determine that the
City
of Detroit and/or the Detroit Institute of Arts
holds clear
legal
title to
any
object
that is considered for deaccession
Any mandatory
restrictions
on
the
disposition
of
obj
ects
including
those
imposed by
the
donor or
by law
will be determined and
strictly
observed
Similarly
if the
objects
were
acquired
with funds that were restricted as to their
use
such restrictions shall
again apply
to
any proceeds
received
upon
the sale of the
objects
While
precatory requests i.e
non
binding preferences
of
donors
should be taken into account where
possible
such
requests
need
not
be followed if it is
not
in the best interest of the Museum
to
do
so
In
the case of an
object by living artist
any
applicable legal
or contractual restriction on
disposition
should be determined and observed
The
donors heirs
living
artist or
other interested
parties
should be notified in
writing by
the
Museum
whenever
possible
if
an
object
is to be deaccessioned
Museum
legal
counsel
upon request
will assist the
Registrar
when
necessary
in order to
assure full
compliance
with
any
legal requirements
Manner of Disposition
The maimer of
disposition
should be
in
the best interest of the
Museum
the
public
it
serves
the
public
tmst it
represents
and the
scholarly
and cultural communities it
serves
Unless section V.D.3 is
applicable
or
unless BD shall
specifically
determine that
an
alternative
means
of
disposition
is
preferable
all
dispositions
shall be
by
sale unless V.E.3
or V.E.4
applies
and the
primary objective
shall be to obtain the best
possible price
for the
object being
sold
Absent
specific
determination to the
contrary
by
the
BD
all sales shall be at
public
auction
Consideration
may
be
given
to
placing objects
in
another institution where
they
may
serve
Page
12
IAI NSP005287
21
similar
purpose
to
that for which
they
were
originally acquired by
the Museum
Tn
the case of works
by living artist
where
appropriate
consideration
may
be
given
to
exchange
Tn
the event that the
BD
shall determine that
disposition
other than
by
sale or
pursuant
to
sections V.D.3
or
V.D.4 is
appropriate
the BD shall
specifically
determine and the
Registrar
will
implement
the alternative means of
disposition agreed
upon
Absent
mandatory
donor restrictions
or
requirements
Museum
employees
officers
commissioners
or
directors
and their immediate
family
members
spouse
and minor
children and other
family
members who live
at
home
and other members of their immediate
households and controlled
entities
may
not be the
purchasers
or
recipients
of deaccessioned
objects
For
any
object
valued
by
the
departmental Curators or
the Director at
more
than
$25000
two disinterested outside written
appraisals
from
qualified dealers appraisers
or auction
houses will be obtained
prior
to recommendation to the CC
Use of Net Proceeds from Disposition
Net
proceeds
derived from the sale of deaccessioned
object i.e
the
proceeds
of the
disposition
less all related
expenses
shall not be used as
operating
funds Such net
proceeds
shall be
placed
in
the
selling
curatorial
departments
Art
Acquisition Fund
in
the name of the
original donor
designated
for
acquisition only
and shall be used
only
for the
replenishment
of the art
collection
consistent with the
acquisition procedures
of the Museum
Objects purchased by
the curatorial
department
so
credited
shall be labeled and identified as
gift
of
name
of
original donor by
exchange
Records
The conditions and circumstances of the deaccession will be entered and retained
permanently by
the
Registrar
as
part
of the Museums collection records Tn
addition
file
on
the
object
will be
retained consisting
of
photographs
extant conservation
reports
and
any
other information useful
in
promoting
the advancement of
scholarly knowledge
about the work
Procedures
The
following procedures
for the
deaccessioning
of
an
object
from collections
must
be
strictly
adhered to
The CC will act
on
proposal
for
deaccessioning subject
to the
following
The
departmental
Curator shall submit the
proposal
in
writing identifiying
the
appropriate
deaccession criteria
see
section V.C
above
for the
object presented
Such
request
will include the written
approval
of the Director of the
Museum as
well as the nature and manner of the
proposed disposition
Each
proposal
shall be
accompanied by
statement from the
Registrar describing
any
special
restrictions on the
disposition
of the
object
Each
proposal
shall also be
accompanied by
computer
printout
with all
information
including photograph and
where
required
conservation
report
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13
IAI NSP005288
21
If the deaccession is
approved by
the
CC
the information will be included in the minutes in
the same fashion as
acquisitions
and will be forwarded to the BD for
approval
and to the
Museum
Registrar
for the
permanent
records of the collections The resolution of the
BD
will be
reported
to
the AC
as
informational
The
BD
will
approve
the nature and manner of the
proposed disposition
if
it is
by
means
other than
public
auction
Assuming
the
object
is
not to
be
given
to
another institution
or
exchanged
and further
assuming
that the
object
is to be
disposed
of at
public
auction
i.e
that the BD has not made
specific
determination to sell other than at
public auction
the Director or at his
request
the
departmental Curators
with the assistance of the
Registrar
will
investigate
the best
public
auction
possibilities
consistent with the
manner
of
disposition approved by
the BD
The Director will set the auction reserve After
negotiation
of the commission and other
contractual
terms
of
sale
the CFO
or
Registrar
will
sign
or
deliver the
contract
documents
for
approval
and execution The
Registrar
in collaboration with the
departmental Curators
will then oversee removal and sale Transfers to another
institution exchanges
and
dispositions
other than
by
sale at
public
auction shall be
accomplished
in the
manner
approved by
the BD
report
on
the
specific
manner
and
venue
of
disposition
the
proceeds
realized
and
expenses
charged to the sale will be
prepared by
the
Registrar
and submitted to the CC and
BD
Any
restrictions on the funds used to
acquire
the
object
will
apply
to the use of the net
proceeds
received
upon
the
disposition
Upon
conclusion of the deaccession
process
the circumstances of the
disposition
and final
results will be entered and retained
by
the
Registrar
as
part
of the Museums
permanent
records of the collections
report
of all final
dispositions
will be
provided by
the
Registrar
to the
City
as
required by
the
Operating Agreement
between the
City
of Detroit and the Detroit Institute of
Arts
approved
November
26
1997
VI LOANS
General Criteria
The Curators of the Museum
are
whenever
possible encouraged
to
participate
in loan
programs
both
lending
to museums
referred
to as
DJA
Outgoing Loans
and
borrowing
from museums
and
private
owners
referred
to
as
Incoming Loans Lending provides
broader
public accessibility
to
objects
owned
by
the
Museum
and
borrowing
from other collections
augments
and enhances the
Museums collection All loans should be consistent with the
long-term
conservation of the
objects
and the needs of the Museums exhibition and research
programs
and are
generally
made at the
discretion of the Director and Curators with the
appropriate approvals
in
place
At
times
for the
good
of the
Museum
the Director
may
deem it
necessary
to limit
outgoing
and
or
incoming
loans
for
specific period
to allow staff time for other Museum endeavors
Once
approved
all loans will be monitored
by
the
Registrar
Loans will be for
specified
periods
of
time
contracted
by
written loan
agreements
signed by
the borrower and lender
All loans will be
fully
documented and monitored for
compliance
of loan
terms
and
insurance
requirements according
to established
procedures
Written condition
reports
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14
IAI NSP005289
21
including photographs
will be
produced
for all loans
entering
or
leaving
the Museum All
loans
except
those for
temporary
custody 90-day limit
and
special
exhibitions shall be
contracted for no more than three
year
loan
periods
No indefinite loans
may
be made to the
Museum although
loan
periods
can
be renewed
at
the
request
of the Curator and the
approval
of the Director Under
some circumstances
with the Museums
approval
loan
periods
may
be contracted for
five-year periods
All loans will be insured for their full lender stated value The Curator will monitor
insurance values of borrowed works for
compliance
with fair market values
No
repairs
alterations
including un-matting
or
re-matting
of
graphic objects
or conservation
treatment of borrowed
objects
shall be undertaken without
properly
documented written
permission
of the lender All artwork borrowed
by
the Museum will be afforded the
same
careful
handling
and treatment as works owned
by
the Museum
All lenders will be informed in
writing
that it is their
responsibility
to
notify
the Museum of
any
incurred
change
of address or
ownership
The
Registrar
will confirm all lender
addresses
every
three
years
In
the event that the Museum is unable to locate lender
in
order
to
extend
or
terminate the
loan
and after all
resources to
find the lender and/or heirs
have been
exhausted disposition
of the loan will be in accordance with
Michigan
Public Act
No
24
Museum
Disposition
of
Property
Act
Long-Term
Loans
Incoming long-term
loans to the
DIA
are recommended
by
the
Curator
based on their artistic
merit and
complement
to
the Museum
collection
with
shipping
and
storage
considerations
supplied by
the
Registrar
and
approved by
the Chief Curator and Director
Long-term
loans to
and from the
Museum
should be reviewed
by
the Curator
at
the end of
every
loan
period
for
possible
return
or
conversion to
accession
and for
possible
deaccession
or
recall in the
case
of
long-term loans from the collection
Incoming
loans will be
accepted
for
special
exhibition
Incoming long-term
loans will be
accepted
to fill
gaps
or illuminate the Museums collection and for
scholarly
research
The Museum should not
provide
free
storage
conservation
treatment or
insurance to
lenders unless the Museum intends to
display
the borrowed work
The Museum should take care to avoid the
perception
that it has an interest in
displaying
an
object
with
enhancing
its value as the
goal
Costs of
storage security transportation
conservation insurance as
well
as
the
objects
condition and
ability
to withstand
travel
the lenders
restrictions
and
problems
of
provenance
or
copyright
should all be
weighed
before
accepting any
loan
Outgoing Loans
Outgoing
loans from the Museums collections
are to
be made for
non-profit
educational
and
scholarly purposes only
The Museums
name
should not be connected with
any
commercial
product
endorsement
Non-museum borrowers
e.g government
agencies
may
borrow
objects only
for
educational
not
decorative
purposes
and must be able to
provide museum-quality
Page
15
IAI NSP005290
21
professional
care
for the
objects
Under
no
circumstances shall
objects
be lent
to
individuals
for
personal
use
Outgoing objects
will be insured
by
the borrower or
by
the Museum at the borrowers
expense
for fair market value Insurance will be
arranged by
the
Registrar
The
Registrar
will obtain and review all borrowers current facilities
reports prior
to loan
approval
Objects
must
be
clean
suitable for exhibit and in stable condition unless condition of loan
is conservation treatment
performed by
the borrower
Any
outside conservation work
performed
must
employ
methods
approved by
the Museum Conservation Services
Laboratory
Before loan is
approved outgoing objects
will be examined
by
the
Conservator and must be deemed able to withstand
transit
climate
changes
and
handling
In
addition objects
must
be
registered by
accession
or
temporary
number and
photographed
prior
to loan
The
property
of others in the Museums
custody may
not
be lent without the owners written
permission
Outgoing
loans from the collection should be
requested
six months in
advance
in
writing
to
the Director
They
are recommended or declined
by
the
Curator Conservator
and
Registrar
and then
proceed
for final
approval/decline by
the Director and BD
All
outgoing
Museum
loans will be
posted
in
the
BD
Minutes
VII RECEIPT OF OBJECTS PLACED IN THE CUSTODY OF THE MUSEUM
Short-Term
Custody
of
Objects
not for Loan
or Acquisition
To meet the
goal
of
complete accountability
for
objects
in its
custody
the Museum must
register
all
objects
left for
identification
examination for loan
or
accession conservation
or
photography
as
well
as objects
for
acquisition
loan and exhibition
The former
group
identification examination
conservation and
photography
are
objects
that are
generally
on Museum
premises
for short time These
objects
are
managed through
the use of Short-Term Art Pass
signed by
the
appropriate
staff
member security guard
and
the
owner
of the
object being deposited
Short-Term Art Passes
as
well
as
internal
departmental procedure
and documentation are used to
manage
this
group
of
privately
owned work while on Museum
premises
These
objects
include the
following
Those
brought
to the Museum for conservation treatment
Those
brought
to the Museum for
Photographic
Service
Those
brought
to the Museum for curatorial
expertizing
and examination
Those
on premises
for
special
occasions
Short-Term Art Pass
Objects
are received and released
by appointment only
and are met
upon
entry
and
departure
at the
security
station
by
Museum
Conservator
Curator or
Photographer
copy
of the Short-Term Art Pass is maintained
by
the
Security
and
Registration
Page
16
IAI NSP00529
21
Departments
and the
department responsible
for
bringing
in the
privately
owned
object Curatorial Conservation Photography
Objects
in the Museum
on
Short-Term Art
Pass
will
not
be insured
by
the
Museum Owners of such
objects
shall release the Museum of
liability
for the
objects by signing
the Short-Term Art Pass
Receipt of objects for acquisition and loans
All
art
objects coming
into the
custody
of the Museum
not
covered
by
Short Term Art
Pass
must
be received and
registered
on
the
day
of their arrival
by
museum
registrar
These
objects
are
managed by
the use of the Museums Deed of
Gift
Purchase
Agreement
DJA
loan
forms
and/or
exhibition
contracts
as well as standard
registration practices
and
procedures
These
objects
include the
following
Objects
for
gift bequest
or
purchase
consideration for the Museum collection
Objects
on
long-term
loan to the Museum
Objects
borrowed as
part
of an exhibition
Objects
for the non-accessioned
collection i.e study
and resale
Release of this
category
of
objects
is
through signature
of the
Registrar
with counter
signature
from the
security
staff
on
duty
The
Registrar
will monitor and record the
movement
of these
objects
as
well
as create
both
hard
copy
and electronic records
on
individual
objects
Unsolicited
Objects
The Museum is not
legally obligated
to
accept
unsolicited
unwanted
objects
as
gifts purchases
or
loans These
objects
may
be claimed
by
curatorial
department
for
gift purchase
or
loan
in which
case
the
Registrar
will issue
receipt
to
the
owner
or
they may
be
disposed
of in
one
of the
following
ways
Returned
to
sender/owner
Transmitted to another educational institution
By
Public sale
By
witnessed destmction
No
option
will be undertaken without notice
being given
to the sender
when
known
and
lapse
of 90
days
there from
Disposition
of
any
non-accessioned
object
will be in accordance with the
Michigan
Public Act No
24
Museum
Disposition
of
Property
Act
VIII PERSONAL COLLECTIONS
Museum staff are
discouraged
but not
prohibited
from
bringing personal
art
objects
into the Museum for
use as office decoration In not
prohibiting
this
practice
the Museum
recognizes
the individuals wish to
Page
17
IAI NSP005292
21
decorate their
working
spaces
To avoid
security
concerns
staff should
contact
the
Registrar
for
requirements
for
personal
art used to decorate museum office
space
All such
objects
must be
registered
as
personal
art used for office decoration The
Registrar
will
prepare
document with short
description
of the
objects
Staff should be
prepared
to
provide
makers/artists
name
title
or
type
of
object
dimensions materials
and short
physical description color shape
The
Registrar
will maintain
records of all current and
past objects
and be
responsible
for
preparation
of the
appropriate paperwork
to
allow the staff member
to remove
the
object
from the
building
Personal collections
must never
be
intermingled
with the museum art
storage
Removal of
personal
art
objects
from the
premises requires
an
Art Pass issued and
signed by
the
Registrar
and
presented
to
and
counter-signed by
the
Security
Officer
at the door of exit These
objects may
not re-enter the
building
once
they
have been removed The
Museum does not
accept any
insurance
responsibility
for
personal
staff
objects
used for office
decoration See also
paragraph
II.B of the Professional Practices
Policy
and
Guidelines
for discussion of
limitations
on
personal
collection
IX CARE AND CONTROL OF
THE
COLLECTIONS
The
assigned
Curator is
ultimately responsible
to the Director for the care of the
objects placed
under his
or
her
department or
assigned
area In
carrying
out that
responsibility
the Curator will
utilize the
supporting
services of the
administration
aides and
volunteers conservation security
exhibition registration
and museum technician
personnel
for assistance
in
the collections
management process
Any
unresolved
questions
between Curators and other staff
regarding procedures
for
security
conservation
registration inventory storage
installation or
other activities
applicable
to
care
of the
collections will be referred to
department
heads
and
if still unresolved to the Chief Curator and/or
Vice President of Collections and Exhibitions
Strategies
and/or the Director for decision To
provide specific guidelines
standard
operating procedures
will be
approved by
the
Strategy Group
and issued
by
the staff Vice
Presidents
the
COO
or the Director
The
Registration Department
shall be
responsible
for
packing shipping receiving
and
releasing
all
art
objects passing
in and out of the Museums control
except
for art
objects
in the Museum on
Short-Term Art Pass
Registration
and
Inventory
Control
personnel
will act as the control
point
for
recording
art
object
movement within the
building
and in and out of the Museum
by acting
on
established
procedures Registrars
and Conservators will
provide
condition
reports
and record
photographs
to
safeguard
the Museums
legal liability
and
provide
basic records
on
collections
Registrationllnventory
Control will work in concert with the curatorial and conservation staffs to
ensure
safe
handling moving installation
and
accurate
documentation of the collection
In consultation with the curatorial
staff
the Conservation
Department
will be
responsible
for
treating
or
arranging
for treatment of
objects
in need of
conservation restoration
or
fumigation
They
will also advise all collections
care
staff
on
the safe
handling display
and
storage
requirements
of art
objects
RECORDS
The maintenance of
accurate up-to-date
records on the
identification location
and condition of
collection
objects
is
major responsibility
of this Museum
Any
staff member in
possession
of such
original
documents
establishing right
and title
to
objects
shall forward such documents to the
Registrar
for central
filing
The
Registrar
shall maintain and
Page
18
IAI NSP005293
21
make available
to
Curators
Conservators and others
qualified original
records
or
copies
of
such
including
electronic records of all accessioned or loaned
objects
in the
custody
of the Museum The
primary
purpose
of these records is the control and documentation of the collections
Therefore
these records should
provide at
least the
following information
which will be recorded
according to
accepted
standards
The basic
object
record will include at minimum artists name and
nationality title object
date medium dimensions
credit
line
current
location
and the
Registrars assigned
number
e.g
accession or
temporary
receipt
number
The
legal
status of the
object
will be noted
e.g
whether the
object
is
temporarily
in the
custody
of the
Museum
on
loan
or owned
by
the Museum
If
the
object
is
owned
how its
title
was
acquired e.g by gift bequest purchase
transfer or
exchange
and from
whom
will be noted
Provenance data as needed to contribute to the establishment of the
legal
status of the
object
Provenance research is the
responsibility
of the
curator
Responsibility
for the
object by department
Activity
of the
object
e.g
loans exhibitions conservation
movement inside or outside the
Museum
or
transfer of
responsibility
between
departments
Curators will maintain records on the
objects
within their
custody
These records shall contain the
objects association
provenance
and use
in
sufficient
depth
to establish its
proper
place
and
importance
within its field
All
primary
records will be
safeguarded
from hazards such as
fire water
smoke
damage
and loss
Where
possible duplicate
records should be maintained
Frequent
back
up
records will be created
for
computer
collections information and stored
in
an off-site location The
following
items are
considered
privileged
items of information and will
not
be
divulged except
to
those
persons
with
right
to know
Names of
lenders donors
and
prior
holders who have
requested they
remain
anonymous
Mailing
addresses of all
donors lenders
or
prior
holders
Storage
location of
objects
Insurance valuation of
objects
Requests
for information
regarding
the value of
objects purchase prices appraisals
insurance
values
etc
will be referred
through
the
Registrar
to the Director for consideration All
guidelines
outlined in
part
apply equally
to hard
copy
and
computer
records
XI ACCESS TO THE COLLECTIONS
As
public
institution
the Museum will strive to
provide
the
public
and the
press
full
access
to the
collections consistent with reasonable
request
staff
availability
and the
security safety
and
conservation of the
objects Requests
for access to the collections not on
public display
will be honored
Page
19
IAI NSP005294
21
where
appropriate
and coordinated with the
responsible
Curator
XII INSURANCE AND RISK MANAGEMENT
The Museums collections and
temporary holdings loans
and works for
acquisition consideration
are
insured on standard all risk fine arts
policy
that is reviewed and renewed
every
one to three
years
The
Department
of the
Registrar
will administer this insurance and
assure
that loan
agreements receipts
and
all other
pertinent
documentation is in hand to effect
coverage
In the interest of
good
risk
management
all staff
must
report
any
damage
or
loss
to
the
Registrar
as soon as
it is discovered The
Registrar
will
maintain related records and
provide appropriate reports
XIII INVENTORIES
The collections of the Museum will be
comprehensively
inventoried once
every
to
10
years
and/or on
continuous basis due to the nature and
goals
of the
inventory Supplementary
detailed
procedures
are to
be
published separately by
the
Department
of the
Registrar
for
guidance
of all involved in the execution
of the
inventory
Each
year
physical inventory
will be conducted
by
the Collections
Management
Office from list of all
objects
valued at
$1000000
or more In
addition
each
month randomly
generated
list of 10
objects
in their
care
will be
sent to
each
department
The
department
is
required
to
locate each
object
on the
list update
its
value
and review the
catalog
data for
accuracy
and
completeness
This
requirement
may
be
temporarily
waived
by
the Director due
to
inaccessibility
of
storage
art
objects
XIV DEFINED TERMS
Accessioning
the formal
process
used to
accept
and record an
object
into the collection
Acquisition an
object
that is the
legal property
of the Museum
Collections
management
the
body
of
museum practices
and
procedures
that allow for the
pmdent
acquisition documentation
care
preservation security loan disposal
and
accountability
of
objects
Deaccessioning
the formal
process
used
to remove an
accessioned
object
from collection
permanently
Inventory the
process
of
creating
and
maintaining
contemporaneous
reconciled record of all
objects
for which the Museum is
responsible
Inventory
control the
ability
of the Museum
to
give
in
timely
manner
the
accurate
status identifying
number
and location of all
objects
for which it is
responsible
Loan
temporary
transfer of
objects
from the
Museum
or
temporary
transfer of
objects
to the Museum
for stated
purposes
This transfer does
not
involve
change
in
ownership
Physical Inventory the
recording
of
objects physically
present
in
particular
location or
physically
present
in
several locations
subject
to the control of the Museum
Reconciliation
comparing physical inventory
with available documentation in order to make
an
informed
judgment
on the status and extent of
objects actually
under the control of the Museum
Records documentation that
physically identifies
describes the
legal
status
of
and
historically
traces
the
use care
and activities of
objects
in the Museums control
Registration overall
procedures
for
officially recording
and
monitoring object transactions including
their
acquisition accession loan movement care shipment deaccession
and
so
forth
Related
Party
Museum
employees past employees
officers commissioners or
directors and their
immediate
family
members
spouse
and minor children and other
family
members who live at
home
and
other members of their immediate households and controlled entities
Verification the
periodic checking
of the
accuracy
of records Verification includes
matching
the
location
on
record with the actual location of the
object
Page
20
IAI NSP005295
21
Exhibit 11
14
14
14
14
14
Exhibit 12
Exhibit 13
Exhibit 14
.3D6 ,;=8" 03E>@
1@>?>A65
-3?;B3< +86=53
/2 &$%'#%( B9@>C89 /2 &$%)#%*
PROPOSED CAPITAL AGENDA
FY 2013-14 through FY 2017-18
TABLE OF CONTENTS
INTRODUCTION .......................................................................................................... 1
SECTION 1: CITY OF DETROIT AGENCIES
Executive Summary .......................................................................................................... 3
Summary Debt Policy ........................................................................................... 11
Bond Ratings .................................................................................................................... 13
MAJOR SOURCES OF REVENUES
Local Funds ........................................................................................................................ 14
Enterprise Departments ..................................................................................................... 20
Federal and State Funds ..................................................................................................... 23
GENERAL OBLIGATION BOND PROGRAM
Definitions .......................................................................................................................... 35
History of Voter Authorizations ..............................................................................36
History of Bond Sales ..............................................................................................37
Voter Authorizations- Remaining Balances.............................................................38
General Obligation Bonds Appropriation Balances. ........................................UR
General Obligation Bonds Recommended Five Year Plan. .............................45
DEPARTMENTAL PROGRAMS (5-YEAR CAPITAL PLAN)
Summary of Agency ...............................................................................................46
Summary by Funding Source ..................................................................................48
Airport .....................................................................................................................52
Arts ........................................................................................................................63
Buildings and Safety Environmental........................................................................67
Charles H. Wright Museum of African-American History......................................81
Department of Public Works ...................................................................................87
Department of Public Works-Street Capital ......................................................95
Department of Transportation (DOT) ...................................................................113
Detroit Transportation Corporation (DTC) ...........................................................126
Eastern Market ......................................................................................................136
Fire ......................................................................................................................147
General Services Department .................................................................................152
Health ....................................................................................................................160
Historical ...............................................................................................................164
Library ...................................................................................................................175
Municipal Parking .................................................................................................185
Planning and Development ...................................................................................190
Police .....................................................................................................................233
Public Lighting ......................................................................................................241
Recreation ..............................................................................................................246
Sewerage ...............................................................................................................259
Water ......................................................................................................................275
Zoological Institute ................................................................................................291
PROJECT MANAGEMENT
Detroit Building Authority .....................................................................................305
Non-departmental ..................................................................................................308
SECTION 2: CITY-WIDE INITIATIVES
The Detroit Works Project ....................................................................................309
Vehicle Management .............................................................................................310
SECTION 3: RELATED AGENCIES AND PROGRAMS
DEVELOPMENT- FINANCING ENTITIES AND PROGRAMS
Detroit Economic Growth Corporation..................................................................314
Downtown Development Authority ......................................................................317
Economic Development Corporation ....................................................................325
Subsidiary Neighborhood Development Corporation ...........................................328
Tax Increment Finance Authority .........................................................................330
Local Development Finance Authority .................................................................333
Detroit Brownfield Redevelopment Authority.......................................................336
Industrial Facilities Tax..........................................................................................340
Obsolete Property Rehabilitation Act ....................................................................341
Corridor Improvement Authority ...........................................................................348
DEVELOPMENT ZONES
Detroit Empowerment Zone ..................................................................................350
Neighborhood Enterprise Zones ............................................................................355
Detroit Renaissance Zone ......................................................................................364
DEVELOPMENT AREAS AND CITIZEN DISTRICT COUNCILS
Development Areas and Citizen District Councils.................................................372
OTHER ENTITIES
Detroit Housing Commission ................................................................................376
Detroit/Wayne County Port Authority ....................................................................381
DETROIT INSTITUTE
OF ARTS
23A?=7A 7<@A7ABA3 =4 /?A@
AGENCY MISSION
The Detroit Institute of Arts collects and holds
in trust for the people of Detroit, Michigan,
and the world, examples of the highest quality
of fine arts from all times and cultures
throughout the world.
CURRENT FACILITIES
The Detroit Institute of Arts (DIA) ranks
among the top art museums in the United
States. It contains an encyclopedic art
collection of over 60,000 objects. The
museum is housed in an approximately
650,000-square feet (sq. ft.) building on 11.5
acres in Midtown. The museum is near the
junction of two major interstate highways,
located close to downtown Detroit.
In 1966 and 1971 the South and North Wings,
respectively, were added to the original Main
(Cret) Building which was designed by Paul
P. Cret in 1927. The building was designed
and is maintained for the presentation of the
collections, public accessibility, responsible
collection maintenance, and as space for
educational programs and events. The first
and second floors of the Cret Building and the
North and South Wings, and the third floor of
the South Wing are principally gallery and
public spaces. The third floor of the North
Wing is used for staff offices. Space uses in
the basement include collection storage
rooms, kitchens, materials storage, photo lab
and mechanical systems. The collection
occupies approximately 44% of the building.
Major facilities within the building include
an 8,500-sq. ft. research library, a 10,000-sq.
ft. Conservation Services Laboratory, a
1,200-seat auditorium, 380-seat lecture hall,
museum shop, two restaurants, and staff
offices.
RECENT HISTORY
In Fiscal Year 2000-01, the museum launched
its Master Plan Project for the renovation,
remediation and expansion of the museum, with
a 35,000 sq. ft. addition to the South Wing. The
Master Plan included the following major
elements: Conservation Services Laboratory
renovation; construction of a new kitchen,
server and dining facility; replacement of the
Woodward Entrance stairs; replacement of all
exterior windows; installation of new basement
and attic air handlers, along with rerouting the
air distribution system; addition of a 4
th
chiller
and cooling tower, total remediation/renovation
of the North and South Wings (including
replacement of the exterior facades of the
wings; flooring over the open courts;
replacing/upgrading electrical and mechanical
systems; and the complete re-installation and re-
interpretation of the art collections.
The Master Plan was essentially completed by
the end of FY 2007-08, with some items
carrying over into FY 2008-09. Total cost was
approximately $170 million.
In the past year with the support of General
Obligation Bonds, the DIA has installed a
public address and wireless access system,
initiated restoration of the exterior stairs for the
DFT, and renovated the DFT lower level and
Crystal Gallery windows. With support from a
HUD grant, the DIA is completing a project to
repair/replace the roof.
PROPOSED CAPITAL AGENDA FY 2013-14 through 2017-18 63
Exhibit 15
Exhibit 16

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UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF MICHIGAN

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UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF MICHIGAN

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Detroit Institute of Arts' Legal Brief

Detroit Institute of Arts' Legal Brief