- Associated Press - Monday, June 16, 2014

DETROIT (AP) - The Detroit City Council on Monday unanimously reaffirmed its approval of placing valuable works of art threatened by the city’s bankruptcy into a charitable trust.

The council took a second vote after federal mediators said there were defects in a June 5 resolution. Both votes were 8-0.

The council voted Monday to approve the transfer, rather than simply to endorse it, said Council Member George Cushingberry Jr.

“This is a final and full-throated approval of the transfer of assets,” said Butch Hollowell, Detroit’s corporation counsel.

They moved to place the art in a charitable trust after some Detroit creditors expressed interest in the collection as a way for the bankrupt city to pay off debt. That led foundations, museum officials, Gov. Rick Snyder and others to try to protect the art.

The vote also follows the Michigan Legislature’s allocation of $195 million as part of an $816 million “grand bargain” to shore up Detroit’s municipal retirement systems and guard the Detroit Institute of Arts from a forced sell-off during the bankruptcy proceedings.

About 2,800 city-owned works of art have been valued at $454 million to $867 million.

On June 9, General Motors, Ford and Chrysler pledged $26 million to cover part of the museum’s $100 million share of the bargain. A dozen foundations have committed about $360 million.

“This grand bargain is a very good deal for the people,” Hollowell said. “The art and all of its contents are going to be here for the benefit of the people of Detroit in perpetuity.”

The bargain is central to emergency manager Kevyn Orr’s plan to erase $18 billion in municipal debt. Orr’s restructuring plan is subject to U.S. bankruptcy Judge Steven Rhodes’ approval. A trial on the plan is scheduled to begin Aug. 14.

The decision to give up ownership of the art was a hard one for City Council members, Cushingberry said. But he said the opportunity to shed the crippling debt load was an opportunity Detroit couldn’t forgo.

“A lot of my colleagues are hearing in the community that people are concerned that the city is being systematically devalued,” Cushingberry said. “The objective is to get us out of bankruptcy as soon as we possibly can, and I think this furthers that along the way.”

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