Victory for Percent-for-Art

A U.S. district court in San Francisco turned back a challenge from a bay area Building Industry Association to Oakland’s recently enacted amendment to its Percent-for-Art statute that requires large-scale real estate developments in the city include publicly accessible works of art or pay a fee to the municipal arts agency. The February 5th ruling by Judge Vince Chhabria accepted a motion by Oakland City Attorney Barbara Parker to dismiss the association’s lawsuit to stop the implementation of the city’s 2015 requirement that developers of both commercial and residential properties include artwork on their sites.

That statute compels developers of commercial projects to spend one percent of their budgets on public artworks, or one half of one percent in the case of residential projects, or else pay a corresponding sum to the city for its arts programs.

The Building Industry Association brought a lawsuit in 2015 against the city of Oakland on constitutional grounds, claiming that the municipal law violated both the First Amendment to the U.S. constitution, by requiring speech in the form of purchasing works of art, and the “takings clause” of the Fifth Amendment, which limits a public entity’s ability to take control of private property for public use.

Judge Chhabria turned aside the Fifth Amendment objection, claiming that the U.S. Supreme Court has interpreted the “takings clause” as applying only when government officials sought to require something of a real estate developer regarding a specific individual property rather than a broad class of properties. He did not call the association’s claim as meritless but stated that resolution of this issue “should be in the Supreme Court, not the Northern District of California.”

The judge had less patience for the First Amendment objection to Oakland’s law, claiming that the ordinance is not “automatically invalid simply because it involves some degree of compelled speech. Plenty of laws involve a degree of compelled speech, and only some of those trigger heightened judicial scrutiny.” According to a statement released by the association in 2015, at the time that this expansion of the city’s 28 year-old public art law was enacted, charged that “[t]he First Amendment’s free-speech guarantees include the right not to give voice to someone else’s message.” However, Judge Chhabria ruled that “[t]he ordinance does not require a developer to express any specific viewpoint, because developers can purchase and display art that they choose.”

The requirement to include publicly accessible artwork in a residential or commercial project, or provide an equivalent amount of money to the city for its art programs, the judge claimed, has the positive goal of “improving the aesthetics within the city and bolstering real property values.”

The ruling noted that Oakland “is one of at least twelve cities in California that have ordinances requiring developers to display or fund art as a condition of project approval.” More generally, where artwork is involved, owners are finding increasingly that laws and trade practices are restricting what they are permitted to do with what they own. If it is a mural on the side of a building you own, you can’t just whitewash it or knock down the wall as part of an expansion. If the artist calls the sculpture “site specific,” you can’t just move it to some place that seems just as good or better. If the artwork needs cleaning or restoration, don’t just take it to someone to do the job but contact the gallery for recommended conservators and the artist for approval of the job. If the dealer you bought it from says not to sell it for at least five years, not to sell it at auction or not to sell it at all, better not.

“Restrictions on what you can do with things you have bought are foreign to the American concept of jurisprudence,” said New York art lawyer Susan Duke Biederman. “Under American law, when title changes hands, generally you can do what you want with what you own. The art world is different.”

And, because it is different, one of her jobs is to counsel clients who are considering the purchase of art, especially ones with less experience in collecting, about the protocols and legal restrictions of buying and selling. “A fair amount of my advising clients concerns the mores and wrinkles of the art market. I explain things and get wide-eyed looks. ‘Oh, my, really?’”

However, she is hardly alone in this. The art advisors who work with collectors, the dealers who sell to them, the lawyers who write up contracts to purchase high-end artworks from galleries all find themselves in the education field, explaining that works of art offer not only pleasure but hazards that laws and customs bring along.

“I operate on two modalities when working with clients,” said Manhattan art advisor Todd Levin. “There is the transactional, helping a deal take place, which really any trained monkey could do. Then, there is the educational, which takes the majority of my time, and much of that involves explaining what ownership means.”

He noted that purchasing an artwork isn’t just an individual triumph but “makes you a member of a community” – the art community – and buyers learn that they need to do as others do. Other art advisors and dealers use the terms “custodian” or “steward” of they art they bought: It’s yours for now but not forever. There is no ‘I’ in team. “Once we explain to clients how things are done in the art market and why they are done this way, they understand,” said New York art advisor Suzanne Modica.

Daniel Grant

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