Detroit Institute of Arts Reaches $100 Million Grand Bargain Goal
Donors have come through for the DIA.
The Detroit Institute of Arts has officially raised the present-day value of the $100 million it has pledged to put toward city pension funds over the next 20 years as part of the city’s bankruptcy exit plan.
When the city of Detroit’s bankruptcy exit plan was approved by Judge Steven Rhodes in November, the DIA agreed to contribute $100 million to the so-called Grand Bargain (see “Detroit Institute of Arts Will Contribute $100 Million to Fund City Pensions“). In exchange for the funds, which will minimize pension cuts for former city employees to just 4.5 percent, the formerly city-owned museum will become an independent organization.
The museum has officially received pledges for only $90 million, but several of the donors have agreed to accelerate their payment schedules to the point where the interest earned over time will cover the remaining $10 million. By exceeding its initial $5 million yearly contribution during the first five years, the museum will receive a present value discount as per the terms of the grand bargain agreement, which rewards early payments. The DIA cut its first check in December this past year, and will make annual payments through 2034.
“When you think a year ago we had nothing in the grand bargain account, a lot has happened to get us here,” DIA board chair Gene Gargaro told the Detroit Free Press. “It’s very fulfilling to know how generous the whole Michigan community has been.”
It’s been less than a year since city emergency Kevyn Orr floated the idea of the $816-million bargain as a way to fulfill the city’s debt without directly monetizing the DIA’s world-class art collection (see “Detroit Institute of Arts Would Be Safe Under City’s Bankruptcy Adjustment Plan“). The state of Michigan is also taking advantage of early payments, chipping in $194.8 million upfront, or the equivalent of $350 million over two decades (see “Michigan Legislature Approves “Grand Bargain” to Save Detroit Institute of Arts“).
Among the donors who helped the DIA raise the necessary funds are the Andrew W. Mellon Foundation and the J. Paul Getty Trust, which pledged a combined $13 million, and Detroit’s automotive giants, who collectively put $26 million toward the cause (see “Mellon and Getty Foundations Pitch in to Save Detroit Institute of Arts” and “US Automakers Pledge $26 Million to Save Detroit Institute of Arts“). Various other companies, foundations, and wealthy individuals also pitched in (see “Detroit Institute of Arts Raises Another $26.8 Million to Save Collection” and “Toyota Gives $1 Million to Save Detroit Institute of Arts“).
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