News

Deal Would Loan Detroit Billions With DIA As Collateral

August 28, 2014

An investment group is reportedly offering to loan the city of Detroit billions of dollars to help it shed debt – if it uses the collection at the Detroit Institute of Arts as collateral. The deal being proposed by the New York-based company Art Capital would give Detroit $4 billion with the DIA’s collection backing the loan. The deal could reportedly require the city to sell some of the museum’s collection to pay off the loan, though officials with Art Capital say that is not the case. A spokesperson for Detroit’s emergency manager says the idea is a non-starter and that the city remains committed to an agreement that the state, private foundations and the museum itself will provide funding to the city, while the DIA is placed in a non-profit trust. But some of the major creditors challenging Detroit’s plan to exit bankruptcy call the Art Capital offer a “game changer” because it would give the city far more money to pay back financial institutions with than the current strategy to exit Chapter 9.