Estates & Attorneys: OTE at Heckerling 2015

OTE’s first year at the Heckerling Institute on Estate Planning was full of talk of Art Leasing and Fractional Discounting. That we offered these services seemed to surprise attendees who tended to be more familiar with business valuation.

It was probably the first time that any of the attorneys or financial planners discovered that an art appraisal firm was capable of complex valuations outside of the usual insurance, resale or donation practice.

One conference highlight for OTE representatives was the chance to speak with some of the attorneys involved in the recent Elkins case. When the Fifth Circuit awarded the Elkins family a $14.4 million estate tax refund and allowed for the use of fractional interest discounts for artworks, it was a great thing for collectors and OTE.  This was exciting for us as, more than twenty years ago, OTE was the first firm to successfully win a substantial discount for our client in an estate that contained works of art.

This was also the first time the OTE unveiled our new brand image and we were proud to have a clean new aesthetic to bring with us to Heckerling.

We were extremely happy with the positive response we received from the people we met at the conference and we are excited about participating again in 2016. See you there!

Feel like a bite? OTE's edible appraisals

A Mayan chief forbids a person to touch a jar of chocolate, (more than a thousand years old, via wikimedia)

A Mayan chief forbids a person to touch a jar of chocolate, (more than a thousand years old, via wikimedia)

In honor of Thanksgiving, a holiday with a distinctly foodie focus, we thought it might be fun to have a blog post dedicated to our experiences with food art.

Unsurprisingly throughout art history food has been the subject of many a painting/ sculpture/print/wood carving, and, let’s be honest every other kind of medium. Recent times have shown that it is more than just a subject. Contemporary artists have transcended merely depicting food to using it. Take Rirkrit Tiravanija’s conceptual installation/performance piece untitled (Free). Originally shown at 303 Gallery in 1992, it was recreated at MoMA as part of the Contemporary Galleries: 1980–Now installation in 2012. The exhibition converted a gallery into a kitchen where the artist served rice and Thai curry, using food as the medium with which to create art and a unique visitor experience. This piece is not alone.  In 1958 during the exhibition The Specialization of Sensibility in the Raw Material State into Stabilized Pictorial Sensibility, The Void Yves Klein served blue- cocktails to gallery visitors asking them to literally consume the artwork. Vik Muniz, a Brazilian artist is well known for his chocolate syrup drawings, one of which was of the Leonardo's ''Last Supper.” 

Chocolate

Chocolate

However, OTE has found that there are some unique challenges for owners of art using material as short-lived as food.

One of OTE’s many memorable appraisals, this case featured an artwork made of white, milk and dark chocolate and ink jet print laid on canvas. The damage was the result of a gust of wind that had caused fragile portions of chocolate to separate completely from the canvas. Sadly, the lost pieces of chocolate were not recovered. This was not the only damage the appraisers discovered. In one corner there was evidence of a mouse having nibbled on the yummy artwork. In this case the artist had intended for the work to “evolve,” which actually allowed for the loss of some of the chocolate and tampering from rodents and other animals. Less cute was the appearance of mold on other parts of the piece. The extent of the damage meant that it would need restoration, and ultimately sustain a substantial loss in value. Restoration required consolidating and re-adhering lifting/peeling areas of the material; unfortunately both costly and time consuming.

Another dilemma au chocolate involved a painting where the artist had stuck M&M’s to canvas, covering them in resin, and using them to dye the surrounding surface. Some of the M&M’s had become damaged (as seen in the picture below) and we had to determine whether this was the result of some sort of accidental damage or whether it was the inherent vice of the materials (i.e. the result of the materials themselves).  Research included some interesting conversations with a confused and curious customer service representative from Mars (the company that owns M&M). From her reaction we gathered that Mars did not often get questions like: what is an optimum temperature for an M&M? How long does the dye on an M&M last? How long would it take an exposed M&M to deteriorate, and what would this be if say the M&M were covered in, hypothetically, something like resin?

Detail of the damaged work

Detail of the damaged work

What we found out was that once you open the bag, Mars pretty much doesn't care what happens to M&M’s and really doesn't like to speculate. What could be extrapolated was that in the bag M&M’s should be stored at around 70 degrees in a cool dry place and that when exposed to heat M&M’s were likely to deteriorate more quickly. Probably, the Mars rep grudgingly admitted, it wasn't a stretch to say that M&M’s were indeed likely to deteriorate naturally over time, even when covered in resin. Following this data collection process, and our examination of the piece it was determined that it was the inherent vice of the M&M’s that was responsible for the loss. Mice, it seems, were not as industrious as our previous case had led us to believe.

If you choose to own something as wonderfully transient as art made with food, expectations of the work should follow accordingly. You may have to face the fact that something wants to eat it.

 

 

Fragments of Adam: an OTE Case

The separated head and torso looked disconcertingly familiar to me when they appeared in a photo on the front page of The New York Times on Sunday, November 9th. “Recreating Adam, From Hundreds of Fragments, After the Fall.”

Screen capture of the New York Times article 

Screen capture of the New York Times article 

The history of how it happened, the secrecy that ensued, the resurrection, and finally, revelation is the plot of this terrifying tale of Tullio Lombardo’s great Renaissance marble masterpiece. I hadn’t felt able to speak about it in detail for 12 years. A promise is a promise.

After the fall, when the initial horror of the museum staff had worn off, but only slightly, a few of us,  engineers , technicians and art specialists, were called upon to render professional opinions about what had gone wrong and what was going to be done about it. I and a colleague from this firm were led, as if to a chamber of horrors, into the conservation laboratory where the sculpture lay, shattered  yet still magnificent .

The papers write of it as if it had been scattered in a thousand fragments across the marble floor of the Velez Blanco Patio at the Met, but I remember it as retaining recognition as a very late 15th century Lombardo, head and much of the torso and one leg intact. I can’t recall exactly because I had to turn over all my photographs immediately after our report was rendered. Those were the days before digital where nothing dies. I guess those were the “28 recognizable pieces” that Met conservator Jack Soultanian mentioned in the newspaper article. The rubble had been bagged and identified.

From time to time, from hushed voices, we learned a little about what was going on in the lab, but very little. Massive amount of research were undertaken by this firm and we traced the sculpture back to its original site. The Renaissance scholar on staff, Leatrice Mendelsohn, was amazing in her pursuit of all the critical information required to help me arrive at a value of the sculpture before the fall and how much the piece had lost in value because of the damage.

A few months later I sat at an endlessly long wood table in a secluded section of the Met of which I had not been previously aware, facing what seemed to be an endlessly long  line of dark suited attorneys representing the multiple organizations and firms involved in the disaster.  Oddly enough, I don’t remember being scared because I was so overwhelmed by the grandeur of the setting, with light streaming down behind the group of what appeared to be judge types sitting to my left. I felt like it was an old Warner Brothers film about the trial of Charles the First.

Okay, not to prolong this because, after all, I survived and am writing this blog now. I mean, I wasn’t the one at fault anyway. I didn’t push Adam off his pedestal. The fact that its six foot three, one thousand pound marble body had been standing for so many years on a modest wooden pedestal might have had something to do with the disaster.

So it was with relief that I found that the Met has decided to open the floodgates of information, always a wise course to take, and one that suddenly seems in favor at major museums nationally. So much better than having misinformation leaking out in bits and pieces and that can prove far more detrimental than a simple admission and explanation.

I wonder if reality shows have been influencing all of us.

Written by Elin Lake-Ewald

Piano Restoration: A Sound Investment

When you own something as melodiously beautiful and expensive as a Steinway piano there are factors to be aware of in the event of water damage. From a pipe leak to hurricane Sandy, OTE appraisers have found that water and moisture are among the most common and harmful types of damage to pianos.  Piano cases are made of wood and are particularly susceptible but then so are most of the parts:  the felts, keys, soundboard, pin-block, tuning pins and strings, etc. Prolonged exposure to water can even lead to corrosion and rust in the metal components.

There is, however, a solution. When Alanna Butera, an OTE specialist appraiser, visited the original Steinway factory in Queens, she saw firsthand how Steinway pianos are built and restored.   

Steinway Grand Piano,   Photo: © Copyright Steinway & Sons via Wikimedia Commons

Steinway Grand Piano,   Photo: © Copyright Steinway & Sons via Wikimedia Commons

Steinway & Sons, one of America’s leading piano manufactures, was founded in 1853 by German immigrant Henry Engelhard Steinway who began as a master cabinet maker.  By 1900 the factory had moved to Long Island City in Queens which is still in operation today and where pianos are built and repairs take place.

A Steinway Grand Piano can take over a year to build through handcrafting. Not only does a Steinway piano produce beautiful music, it is an excellent investment.   According to Reuters: “A 10 year old Steinway in good condition, usually sells for about 75 percent of the current retail price, which goes up about 4 percent each year;” that’s a lot better than your car. Steinway even issues a five year warranty on their repaired pianos, the same warranty they give to new pianos.

From an appraisal standpoint, a damaged Steinway piano repaired by Steinway can be valued at 85% of the current retail price of a new one. But restoration isn’t cheap. In our experience the cost for a restoration caused by water damage is approximately $30,000 to $40,000 for a single grand piano.

Close up of a piano in progress at the Steinway factory

A peak into Steinway's factory in Queens

On the positive side, what our appraiser observed at the Steinway factory is that you can be certain time and care is taken in restoration efforts.  When Steinway restores pianos they keep the cast iron block and original case, barring any extensive damage to either. They then refinish, re-guild and replace all the hardware with Steinway parts, entirely by hand. Steinway still continues to provide hand rubbed finishes. To maintain the value of a Steinway piano, restoration and replacements should be done solely by Steinway, using only their authentic parts. Steinway restorations come with a certificate, so if you are thinking of selling make sure to hold onto it. 

Steinway calls their pianos a “sound investment” and we happen to agree.

Gold, Fine China, and the Truth About Tarnishing

Have you ever wondered what the word “gilding” means? It’s an ultra-sensitive and very beautiful decorative treatment that turns a surface into gold without actually creating something made of gold.

Gilding generally refers to the liquid gold applied through paint or other techniques to porcelain and other ceramics. The good news is that it looks lustrous and lovely when first applied.  The bad news is that it shows wear when used frequently and is sensitive to its environment. In fact, after working with a recent client an O’Toole-Ewald appraiser found that it doesn't always require heavy usage to cause distress to gilding and that the saying that gold never tarnishes can be disproven.

Porcelain saucer with gilding

Porcelain saucer with gilding

About 20 years ago the client bought a beautiful bone china set decorated with extensive and intricate gilding. It had been placed in storage and when she recently retrieved it from the box in which it had been resting for two decades she found that the 24 carat gilding had taken on a red/black discoloration. Tarnishing film often looks red or black in appearance depending on what base metal is used, copper or silver respectively. However, it is extremely rare for high carats of gold to tarnish, so this case was at first a bit of a mystery.

While pure gold is not susceptible to tarnishing, almost all gold is mixed with some small percentage of other alloys, which can be vulnerable to tarnishing would only seen below 14 carats. In some cases 14 and 18 carats or even occasionally higher carats can tarnish, but it is extremely rare in gold as high as 24 carats.

If the base metals, in particular copper or silver, are exposed to corrosive agents, especially sulfur and oxygen compounds, tarnishing is entirely possible. Moisture, perspiration, perfumes, how you wash it, the water in which it is washed and even some foodstuffs can be responsible for the corrosion of gilding. But because the china in this case had never been used, it was unlikely that any of these were the culprits.

Through expertise, persistence and considerable in-depth research, OTE was able to determine the prolonged exposure to the organic sulfur containing compounds in the storage bags, in combination to the oxygen and sulfur in the atmosphere, had caused the gilding to discolor. The damage was determined to be inherent vice resulting from the chemical reaction of the gilding in its storage containers.

 This case is a rarity. In India and the Middle East, especially, there have been more incidents of the tarnishing of higher carat gold, which appears to be a problem more specifically linked to the region. In Europe and North America tarnishing in higher carats of gold is much more unusual. In the past 30 years, there has been only one other instance, filed with the manufacturer of this china, of red and copper discoloration occurring on the gilding. Without the persistent research efforts of OTE appraisers combined with scientific sleuthing, this case may not have been solved.

Why It Is Important To Insure Your Art

In New York City Hurricane Sandy was a wake-up call for many art enthusiasts to insure their art but there is still a lot of uninsured or underinsured art out there. According to Kathryn Tully in 2012 article for Forbes “the premium value of insured art globally was somewhere between $500 million and $1 billion. If those estimates are right, there’s a lot of uninsured art out there.”

Many people have collections of art, or perhaps just one valuable piece but rarely know exactly what they are worth.  It is surprisingly easy for a painting, sculpture or even a more experimental piece of art to be damaged due to some unforeseen event, which is why it is important to be aware of its value. This summer alone there has been a significant amount of flooding in the tri-state area, and this has resulted in thousands of dollars in damages. 

To protect your investment obtaining an appraisal of the retail replacement value means that you will be sure you have the right insurance coverage. The majority of standard home-owners insurance policies have limitations in regards to what can be reimbursed in the event of damage or loss to art and antiques.  So it is a good idea to look closely at your policy if you are not exactly sure what your insurance covers. 

If you are a serious collector you will probably need a more specialized policy tailored specifically to your collection. Insurance companies that are particularly qualified for this are: AXA, Chubb, and AIG.  However, it is still important to be aware of your art’s value as the years progress.

The art market is continually fluctuating which is why it is a good idea to update these appraisals every couple of years. The value of your art will probably change with the shifting market. Unlike other luxury goods, such as a Chanel handbag or a BMW, a work of art is unique and difficult to replace.  This is why using an appraiser who is USPAP (Uniform Standards of Professional Appraisal Practice) certified and a member of the ASA, RICS, or ISA, is essential.  An appraisal by a qualified appraiser will be fully researched and legally sound. And always make certain, no matter who the appraiser is, that he or she has the right experience to evaluate the specific piece you own.