Foundations pledge $330 million to preserve Detroit art, pensions

A group of foundations has pledged to give Detroit $330 million, a contribution designed to prevent the sale of the city’s art, freeing that money to help ease threatened cuts in benefits for retired municipal workers.

The charitable effort, announced Monday by mediators in Detroit’s bankruptcy proceeding, aims to keep artwork in the prestigious Detroit Institute of Arts from being sold. Officials have asked the museum to raise $500 million to help the city, which could then use the money to deal with other expected cuts as it seeks to work its way back from the nation’s largest municipal bankruptcy.

Mediators working in the U.S. District Court for Eastern Michigan, announced the agreement, calling the foundations’ moves “an extraordinary and unprecedented effort to help resolve two very challenging sets of issues — the underfunding of Detroit’s two pension systems and the preservation� of the Detroit Institute “and its iconic art collection.�

According to the city’s emergency manager, Kevyn D. Orr, the pension funds could be underfunded by $3.5 billion. He has been pressing the museum to raise more money or face the possible sale of some of its artwork.

In December, Christie’s auction house estimated that the sale of art could generate $454 million to $867 million.

Among those who have pledged money are the Ford Foundation, the Kresge Foundation and the John S. and James L. Knight Foundation. In addition, more than 100 people have contributed to a community foundation to help.

In a joint statement, the nine foundations said: “As a diverse group of local and national philanthropies, we are pleased to contribute to what we hope will be a balanced, workable plan that will enable Detroit to emerge from bankruptcy renewed and stronger.�

“While we approach this matter from different perspectives, we are united in the view that the plan offers an important opportunity to help Detroit find much-needed solutions to its unique challenges,� the foundations said. “Helping to protect the hard-earned pensions of city workers while also preserving the DIA’s collection for all the people of southeastern Michigan are worthy components of a balanced overall settlement that will help ignite Detroit’s renewal.�

A federal judge last month ruled that federal law supersedes state law when it comes to protecting pension benefits. The ruling, which is being appealed, clears the way for cuts in municipal pension benefits.

ALSO:

Supreme Court turns down Arizona abortion challenge

Feds to probe why Southwest flight landed at wrong Missouri airport

‘Light at the end of the tunnel’ for West Virginia water crisis