Donor pledges $5 million to protect city's art, pensions
DETROIT — A local philanthropist said Thursday he'll donate $5 million toward protecting the Detroit Institute of Arts' renowned collection and city retirees' pensions — and he hopes to inspire others to give.
Millionaire A. Paul Schaap said he plans to meet Friday with U.S. Chief District Judge Gerald Rosen, who is serving as mediator in Detroit's bankruptcy case. Rosen has been trying to persuade at least 10 charitable foundations to put up $500 million to spin off the DIA from the city, which could then use the money to reduce pension cuts and improve services.
"I have to believe there are more of us out there who want to do something and didn't quite know how to approach it," Schaap said.
Schaap said he hoped his gift would stimulate major foundations to agree to participate in the Rosen-mediated fund. So far, leaders of 10 local and national foundations who have met with Rosen have yet to commit. One of Rosen's goals is to turn the DIA into an independent nonprofit free of city ownership and protected from creditors seeking billions and pushing for the sale of city assets..
On Tuesday, U.S. Bankruptcy Judge Steven Rhodes ruled the city eligible for bankruptcy. The best timing for any grand bargain involving the DIA would be before emergency manager Kevyn Orr submits his "plan of adjustment" for moving Detroit through bankruptcy, including proposed pension cuts, sale of city assets and major changes to how city services are delivered. Orr has said his plan could be delivered by early January.
The Schaaps' donation would mark the first time a Detroit-area benefactor has publicly agreed to give money to help resolve the toughest issues in Detroit's bankruptcy — pensions and DIA art.
On Thursday, after reading about Rosen's efforts in the Free Press, Schaap contacted the newspaper to talk about his desire to contribute to a solution. The newspaper put Schaap in contact with Rosen, and the two plan to meet Friday to discuss details of the donation.
A resident of Grosse Pointe Park, Schaap made millions as a biotechnology entrepreneur. He and his wife, Carol, have been giving away some of their money in recent years, including endowing a Wayne State University chemistry building in 2011.
Looking for more
The Schaaps have at least one ally, so far.
Tom Guastello, chairman of the Oakland County Arts Authority, said Thursday he was going to lobby well-to-do Oakland residents as well as the public to contribute to the proposed $500-million fund.
"We're trying to do everything we can do," Guastello said. "We have recognized the need to help contribute to the situation in Detroit, particularly the situation of people on pensions."
Like the Schaaps, Guastello said his fundraising effort is designed to stimulate others to give, including the foundations that Rosen has been working with.
"In order for this to work, we need this as a complement to some major commitments from large financial charities and institutions. This could be an excellent supplement to that," Guastello said. "We won't raise hundreds of millions of dollars, but I think there are dollars that can be raised that could help in this effort."
Rosen hopes to accomplish three goals with $500 million: Shore up city pensions (which Orr is likely to propose cutting in his bankruptcy reorganization plan), relieve pressure on the DIA to sell artwork, and free up more money to restore city services for hard-pressed Detroiters.
Rosen has declined to comment on his efforts. Leaders of the various foundations involved have also declined comment.
This week, Orr told Free Press editors and reporters that he supported Rosen's efforts and hoped to include a mediated deal in his plan of adjustment. He would not speculate on how much difference it would make, but he said, "Anything is helpful."
An email from Sara Wurfel, spokeswoman for Gov. Rick Snyder, said he was "encouraged by people coming together to try and find creative solutions to very difficult problems — that culture of collaboration should be everyone's goal throughout bankruptcy and beyond."
Schaap said cutting pensions and selling art to satisfy city debt would hurt an already injured city.
"None of us want to see individual people hurt and lose pensions," he said, "and also then to provide for the long-term future of the DIA. I think if they have to sell one piece of art it will so demoralize people in this metro area that we can't even imagine it."