1 00:00:01,920 --> 00:00:07,040 Speaker 1: Welcome to Brainstuff, a production of iHeart Radio. Hey brain Stuff. 2 00:00:07,120 --> 00:00:13,120 Speaker 1: Lauren Vogelbaum here Delaware Freeport founder and president Frets Deedle 3 00:00:13,400 --> 00:00:18,040 Speaker 1: won't identify any of the artistic treasures stored inside this nondescript, 4 00:00:18,120 --> 00:00:21,040 Speaker 1: flat roofed building that he operates not far away from 5 00:00:21,040 --> 00:00:24,720 Speaker 1: the Inner State in Newark, Delaware, except to say that 6 00:00:24,880 --> 00:00:28,040 Speaker 1: thirty six thousand square feet of storage space that's about 7 00:00:28,080 --> 00:00:33,440 Speaker 1: three thousand three square meters contains a wide assortment of paintings, sculptures, 8 00:00:33,479 --> 00:00:37,480 Speaker 1: and other objects ranging from ancient to modern. He said, 9 00:00:37,920 --> 00:00:41,880 Speaker 1: if you can call it art, it's in my warehouse. Died, 10 00:00:42,360 --> 00:00:45,720 Speaker 1: a native of Austria, is careful not to reveal too 11 00:00:45,760 --> 00:00:50,120 Speaker 1: much detail about the facility. His clientele, which includes art 12 00:00:50,159 --> 00:00:54,600 Speaker 1: collectors and upscale investors as well as galleries, artists, and institutions, 13 00:00:54,880 --> 00:00:58,640 Speaker 1: are paying for safe, discrete storage, and that means a 14 00:00:58,720 --> 00:01:02,320 Speaker 1: high degree of physical and cyber security, as well as 15 00:01:02,320 --> 00:01:06,200 Speaker 1: a carefully monitored interior environment that strives to maintain a 16 00:01:06,200 --> 00:01:09,760 Speaker 1: temperature of seventy degrees fahrenheit or twenty one celsius with 17 00:01:09,800 --> 00:01:14,200 Speaker 1: fifty relative humidity, which scientists and art conservators have determined 18 00:01:14,240 --> 00:01:18,000 Speaker 1: is ideal for preserving artwork. Even the loading dock is 19 00:01:18,040 --> 00:01:22,920 Speaker 1: heated and cooled with precision. The warehouse has what Deeedle 20 00:01:23,000 --> 00:01:27,800 Speaker 1: calls museum like conditions, except even better. He said, when 21 00:01:27,800 --> 00:01:30,760 Speaker 1: you have thousands of people walking into a museum, the 22 00:01:30,800 --> 00:01:34,679 Speaker 1: climate becomes very unstable quickly, especially on a rainy day. 23 00:01:35,120 --> 00:01:38,959 Speaker 1: You have spikes and humidity and temperature in our environment. Obviously, 24 00:01:39,080 --> 00:01:43,640 Speaker 1: we don't have any people just walking in. To the contrary, 25 00:01:43,840 --> 00:01:46,600 Speaker 1: when clients want to look at their artwork, they're ushered 26 00:01:46,640 --> 00:01:50,440 Speaker 1: into a special lounge with a climate controlled viewing room. 27 00:01:50,480 --> 00:01:53,080 Speaker 1: Their art, which is tracked digitally with bar codes and 28 00:01:53,120 --> 00:01:56,600 Speaker 1: to secure database, is retrieved and displayed for them to see. 29 00:01:58,640 --> 00:02:02,520 Speaker 1: Besides preservation, all Aware Freeport has other advantages for art 30 00:02:02,520 --> 00:02:06,240 Speaker 1: investors and anyone else looking for a temporary tax loophole. 31 00:02:07,080 --> 00:02:10,880 Speaker 1: Unlike New Yorker California, Delaware has no sales tax and 32 00:02:10,880 --> 00:02:14,760 Speaker 1: it's located in a federally designated foreign trade zone, so 33 00:02:14,919 --> 00:02:19,720 Speaker 1: purchasers of, for example, Chinese antiquities or German lithographs don't 34 00:02:19,800 --> 00:02:22,800 Speaker 1: have to pay the tariffs imposed by the Trump administration. 35 00:02:23,720 --> 00:02:27,000 Speaker 1: That is, as long as the artworks don't leave the freeport. 36 00:02:28,480 --> 00:02:31,600 Speaker 1: Delaware Freeport is just one of many such high security 37 00:02:31,600 --> 00:02:35,600 Speaker 1: repositories scattered across the globe in far flung locales from 38 00:02:35,600 --> 00:02:39,920 Speaker 1: Switzerland to Singapore. Much of the world's valuable art is 39 00:02:39,960 --> 00:02:43,040 Speaker 1: not on display in museums or on the mansion walls 40 00:02:43,080 --> 00:02:46,720 Speaker 1: of wealthy collectors. Instead, it's kept out of view in 41 00:02:46,840 --> 00:02:51,000 Speaker 1: nondescript storage facilities located in these special trade zones, where 42 00:02:51,000 --> 00:02:53,680 Speaker 1: the owners of paintings and sculptures can avoid having to 43 00:02:53,680 --> 00:02:57,760 Speaker 1: pay taxes and import duties, and if they wish, shield 44 00:02:57,800 --> 00:03:02,600 Speaker 1: themselves from unwanted attention as well. But we spoke with 45 00:03:02,720 --> 00:03:05,760 Speaker 1: John Zarabell, a former museum curator who is now a 46 00:03:05,760 --> 00:03:08,560 Speaker 1: professor and Chair of International Studies at the University of 47 00:03:08,560 --> 00:03:12,679 Speaker 1: San Francisco. He said that in some ways, quote, free 48 00:03:12,760 --> 00:03:16,600 Speaker 1: ports are the equivalent of the Swiss bank account. He 49 00:03:16,680 --> 00:03:20,519 Speaker 1: explained that freeport users are quote people who simply don't 50 00:03:20,600 --> 00:03:23,440 Speaker 1: want others to know that they have these assets. If 51 00:03:23,440 --> 00:03:26,040 Speaker 1: they showed it off in their apartments, someone might say, 52 00:03:26,400 --> 00:03:28,480 Speaker 1: isn't that a Picasso on the wall? How did you 53 00:03:28,520 --> 00:03:33,320 Speaker 1: get fifty million dollars. The concept of freeports dates back 54 00:03:33,360 --> 00:03:35,600 Speaker 1: to the eighteen hundreds, when they were developed as a 55 00:03:35,600 --> 00:03:38,560 Speaker 1: way to delay the expense of paying duties and taxes 56 00:03:38,600 --> 00:03:42,760 Speaker 1: on stockpiles of imported wares until the goods actually had 57 00:03:42,800 --> 00:03:47,640 Speaker 1: a profitable use. Zarabell said. The idea was, you have 58 00:03:47,720 --> 00:03:49,880 Speaker 1: a good you can't take to market right now for 59 00:03:49,920 --> 00:03:52,200 Speaker 1: some reason, and so you store it in a place 60 00:03:52,240 --> 00:03:54,480 Speaker 1: where it will hold its value, but you won't get 61 00:03:54,520 --> 00:03:57,000 Speaker 1: taxed on it right now, and so when they take 62 00:03:57,000 --> 00:04:01,200 Speaker 1: it out of the freeport, it gets taxed. In recent years, though, 63 00:04:01,320 --> 00:04:04,360 Speaker 1: freeports have come to play an increasingly important role in 64 00:04:04,400 --> 00:04:08,160 Speaker 1: the burgeoning business of buying, selling, and investing in high 65 00:04:08,280 --> 00:04:12,040 Speaker 1: value works of art. One manager of art for wealthy 66 00:04:12,080 --> 00:04:16,440 Speaker 1: collectors told NPR in that her clients stored three d 67 00:04:16,600 --> 00:04:19,960 Speaker 1: million dollars worth of art in various freeports across the world. 68 00:04:21,680 --> 00:04:25,600 Speaker 1: The Geneva Freeports reportedly contains more than a million artworks, 69 00:04:25,640 --> 00:04:28,599 Speaker 1: several times more than the collection of the Louver in Paris. 70 00:04:29,640 --> 00:04:33,480 Speaker 1: BBC Arts editor Will Gumparts has described the facility as 71 00:04:33,560 --> 00:04:37,800 Speaker 1: quote the greatest art collection no one can see. Its 72 00:04:37,839 --> 00:04:42,040 Speaker 1: inventory has contained works by artists ranging from Leonardo da Vinci, 73 00:04:42,160 --> 00:04:47,679 Speaker 1: al Greco and Renoir to Andy Warhol, but the Geneva 74 00:04:47,720 --> 00:04:52,000 Speaker 1: facility has also been used to conduct trafficking in archaeological treasures, 75 00:04:52,279 --> 00:04:57,880 Speaker 1: including Phoenician, Etruscan and Roman objects. Once, a Swiss prosecutor 76 00:04:57,920 --> 00:05:01,320 Speaker 1: seized a Morianni painting from the Geneva Freeport, a painting 77 00:05:01,320 --> 00:05:03,680 Speaker 1: that's been the subject of an ongoing legal dispute in 78 00:05:03,720 --> 00:05:06,560 Speaker 1: the US involving an allegation that it was stolen by 79 00:05:06,600 --> 00:05:09,600 Speaker 1: the Nazis from a Jewish art dealer back in ninety four. 80 00:05:10,720 --> 00:05:13,640 Speaker 1: Swiss officials now carefully scrutinize the art that goes in 81 00:05:13,839 --> 00:05:18,240 Speaker 1: and out of the facility. The freeports across the world 82 00:05:18,320 --> 00:05:20,640 Speaker 1: may contain many works of art that have vanished from 83 00:05:20,640 --> 00:05:25,840 Speaker 1: public view and whose whereabouts are publicly unknown. Zarabell said, 84 00:05:26,080 --> 00:05:28,599 Speaker 1: there are a lot of things that just disappear right 85 00:05:28,880 --> 00:05:31,360 Speaker 1: and we don't know how many were destroyed in World 86 00:05:31,400 --> 00:05:34,560 Speaker 1: War two or might actually be sitting in a freeport. 87 00:05:36,120 --> 00:05:39,520 Speaker 1: At Delaware Freeport, Deetle says that there isn't any mystery 88 00:05:39,520 --> 00:05:42,240 Speaker 1: about the inventory as far as the government is concerned. 89 00:05:42,920 --> 00:05:46,280 Speaker 1: He said, anything in my foreign trade zone is recorded 90 00:05:46,320 --> 00:05:49,800 Speaker 1: by US customs, and added that officials will follow up 91 00:05:49,800 --> 00:05:52,599 Speaker 1: as well. A quote. They come into the warehouse and 92 00:05:52,640 --> 00:05:55,640 Speaker 1: make sure those items are still there and haven't been removed. 93 00:05:56,800 --> 00:06:00,560 Speaker 1: He said he's also careful about whom he does business with. Quote, 94 00:06:00,600 --> 00:06:03,039 Speaker 1: if there was somebody really shifty trying to come into 95 00:06:03,080 --> 00:06:05,800 Speaker 1: my warehouse, I wouldn't let them in. We do due 96 00:06:05,800 --> 00:06:08,919 Speaker 1: diligence on who our clients are. I know my clients, 97 00:06:08,960 --> 00:06:13,760 Speaker 1: they're legit people. The demand for freeports has been driven 98 00:06:13,800 --> 00:06:16,920 Speaker 1: in part by the evolution of art into an alternative 99 00:06:16,960 --> 00:06:20,880 Speaker 1: investment vehicle. Art confunction is a hedge against factors that 100 00:06:20,920 --> 00:06:26,000 Speaker 1: affect stock market investments. However, Deetle says the art collectors 101 00:06:26,000 --> 00:06:30,440 Speaker 1: and investors he knows all have a genuine passion for it. Quote. 102 00:06:30,800 --> 00:06:33,000 Speaker 1: At some point you run out of space on walls, 103 00:06:33,160 --> 00:06:37,440 Speaker 1: you need to store some of it, and to be fair, 104 00:06:37,680 --> 00:06:40,640 Speaker 1: storage in a freeport protects artworks from fading in the 105 00:06:40,640 --> 00:06:43,919 Speaker 1: sunlight that streams in a nearby window, or being accidentally 106 00:06:44,000 --> 00:06:48,200 Speaker 1: damaged by home inhabitants or guests. It's a guaranteed way 107 00:06:48,240 --> 00:06:51,680 Speaker 1: to keep it safe. Of course, that does mean that 108 00:06:51,720 --> 00:06:54,960 Speaker 1: you don't have immediate access to that art to enjoy it, 109 00:06:55,240 --> 00:06:58,679 Speaker 1: study it and learn from it, and neither does anybody else. 110 00:07:00,080 --> 00:07:06,159 Speaker 1: M Today's episode was written by Patrick J. Keiger and 111 00:07:06,200 --> 00:07:08,720 Speaker 1: produced by Tyler Clang. For more on this and lots 112 00:07:08,720 --> 00:07:10,600 Speaker 1: of other topics that may or may not make you 113 00:07:10,640 --> 00:07:13,360 Speaker 1: want to eat the rich, visit how stuff works dot com. 114 00:07:13,440 --> 00:07:15,720 Speaker 1: Brain Stuff is production of I heart Radio. For more 115 00:07:15,760 --> 00:07:18,200 Speaker 1: podcasts my heart Radio, visit the i heart Radio app, 116 00:07:18,280 --> 00:07:21,080 Speaker 1: Apple Podcasts, or wherever you listen to your favorite shows.