By Joseph Lichterman
DETROIT, Aug 7 (Reuters) - Detroit is sorting through the Detroit Institute of Arts' collection to see what it could sell to raise funds, the city's emergency manager said on Wednesday, touching on a contentious issue in the largest U.S. municipal bankruptcy filing.
"It's not a high priority" to sell the art, Emergency Manager Keyvn Orr said in an interview with Reuters.
But a detailed evaluation of the 60,000-piece collection is part of a broad review of city assets, including its water and sewage department, Coleman A. Young International Airport and the Detroit-Windsor Tunnel, he said.
The prospect of putting the museum's art up for sale has sparked furious debate throughout the city and its suburbs. The museum and Michigan Attorney General Bill Schuette have said Detroit cannot sell the art because the works are held in a charitable trust for people in Michigan - a position with which the emergency manager disagrees.
Orr said he has never visited the DIA, though he has studied the museum's art collection, which includes an 1887 self-portrait by Vincent van Gogh and a 27-panel fresco by Mexican artist Diego Rivera.
"I actually took an art history course years and years ago, and the stuff I read about is there," Orr said.
On Monday the city said it had hired auction house Christie's to appraise the DIA's collection. Orr said he would make a decision about what to do with the art after Christie's completes its review, perhaps by mid-October.
Despite the size of the DIA's collection, only 5,000 or so works are on display at one time. Orr said about 35,000 works are not subject to bequests or other obligations that would limit the ability to sell them.
"Once we find out what we're talking about, that'll probably lead the discussion about what we can and can't do," he said. "I'm not being flippant, I'm just being very careful because every time I say something about the DIA it's another three weeks of, 'Orr the Luddite is getting ready to sell our family jewels.'"
The city, which owns the DIA collection, and its creditors are discussing ways to restructure $18 billion in debt and unfunded pension liabilities after it filed the largest municipal bankruptcy in U.S. history last month.
Orr said he has not ruled out any options, including an outright sale of the collection, or using some or all of it as collateral for new loans to the city.
Only 5 percent of the collection was bought with city funds, according to Tim Burns, executive assistant to the museum's director.
The emergency manager said many works "may not have been seen for decades," and that the city must determine what is worth selling.
"If you have to sell 10,000 pieces to get ten dollars, why would you do that?" Orr asked.
Aside from the DIA, Orr said there are "15 buckets" of assets that the city is valuing and considering monetizing. He mentioned Coleman A. Young International Airport, the Detroit-Windsor Tunnel, parking lots and other city-owned assets and land.
The airport sits on 264 acres (107 hectares) on the city's east side. There is a 53,000-square-foot (4,925-square-meter) passenger terminal, but the airport only serves private planes and cargo aircraft.
About 225 planes are served daily at the airport, and 175 planes are based there, according to the city's website.
Detroit's primary commercial airport is Detroit Metropolitan Wayne County Airport, located about 20 miles (32 kilometers) west of the city.
Orr called Coleman Young "underutilized" and said he was uncertain how much it could fetch.
The tunnel connecting Detroit and Windsor, Ontario, is jointly owned by both cities. But it is operated by the privately owned American Roads LLC, which filed for bankruptcy protection last month in a bid to restructure $830 million in debt.
Traffic levels have fallen short of projections since it took on the debt in 2006, a factor American Roads blames on Detroit's population decline.
Orr described Belle Isle, a 982-acre (398-hectare) island park in the Detroit River, as a special case.
In January Michigan offered to lease Belle Isle from the city, agreeing to assume $6 million in annual operating costs. But the Detroit City Council balked at the proposal, and Governor Rick Snyder pulled the deal.
Orr said the city was probably going to seek a similar deal that would turn Belle Isle into a state park, but said there was no target date for completing it.
He added that the city would save another $10 million if the state agreed to perform some deferred maintenance.
A deal with the state "makes more sense than anything else," Orr said. "We want to keep it as a refuge for the city to use."
(Reporting By Joseph Lichterman; Editing by Xavier Briand)