Speaker 1: Welcome to Brainstuff, a production of iHeart Radio. Hey brain Stuff.
Speaker 1: Lauren Vogelbaum here Delaware Freeport founder and president Frets Deedle
Speaker 1: won't identify any of the artistic treasures stored inside this nondescript,
Speaker 1: flat roofed building that he operates not far away from
Speaker 1: the Inner State in Newark, Delaware, except to say that
Speaker 1: thirty six thousand square feet of storage space that's about
Speaker 1: three thousand three square meters contains a wide assortment of paintings, sculptures,
Speaker 1: and other objects ranging from ancient to modern. He said,
Speaker 1: if you can call it art, it's in my warehouse. Died,
Speaker 1: a native of Austria, is careful not to reveal too
Speaker 1: much detail about the facility. His clientele, which includes art
Speaker 1: collectors and upscale investors as well as galleries, artists, and institutions,
Speaker 1: are paying for safe, discrete storage, and that means a
Speaker 1: high degree of physical and cyber security, as well as
Speaker 1: a carefully monitored interior environment that strives to maintain a
Speaker 1: temperature of seventy degrees fahrenheit or twenty one celsius with
Speaker 1: fifty relative humidity, which scientists and art conservators have determined
Speaker 1: is ideal for preserving artwork. Even the loading dock is
Speaker 1: heated and cooled with precision. The warehouse has what Deeedle
Speaker 1: calls museum like conditions, except even better. He said, when
Speaker 1: you have thousands of people walking into a museum, the
Speaker 1: climate becomes very unstable quickly, especially on a rainy day.
Speaker 1: You have spikes and humidity and temperature in our environment. Obviously,
Speaker 1: we don't have any people just walking in. To the contrary,
Speaker 1: when clients want to look at their artwork, they're ushered
Speaker 1: into a special lounge with a climate controlled viewing room.
Speaker 1: Their art, which is tracked digitally with bar codes and
Speaker 1: to secure database, is retrieved and displayed for them to see.
Speaker 1: Besides preservation, all Aware Freeport has other advantages for art
Speaker 1: investors and anyone else looking for a temporary tax loophole.
Speaker 1: Unlike New Yorker California, Delaware has no sales tax and
Speaker 1: it's located in a federally designated foreign trade zone, so
Speaker 1: purchasers of, for example, Chinese antiquities or German lithographs don't
Speaker 1: have to pay the tariffs imposed by the Trump administration.
Speaker 1: That is, as long as the artworks don't leave the freeport.
Speaker 1: Delaware Freeport is just one of many such high security
Speaker 1: repositories scattered across the globe in far flung locales from
Speaker 1: Switzerland to Singapore. Much of the world's valuable art is
Speaker 1: not on display in museums or on the mansion walls
Speaker 1: of wealthy collectors. Instead, it's kept out of view in
Speaker 1: nondescript storage facilities located in these special trade zones, where
Speaker 1: the owners of paintings and sculptures can avoid having to
Speaker 1: pay taxes and import duties, and if they wish, shield
Speaker 1: themselves from unwanted attention as well. But we spoke with
Speaker 1: John Zarabell, a former museum curator who is now a
Speaker 1: professor and Chair of International Studies at the University of
Speaker 1: San Francisco. He said that in some ways, quote, free
Speaker 1: ports are the equivalent of the Swiss bank account. He
Speaker 1: explained that freeport users are quote people who simply don't
Speaker 1: want others to know that they have these assets. If
Speaker 1: they showed it off in their apartments, someone might say,
Speaker 1: isn't that a Picasso on the wall? How did you
Speaker 1: get fifty million dollars. The concept of freeports dates back
Speaker 1: to the eighteen hundreds, when they were developed as a
Speaker 1: way to delay the expense of paying duties and taxes
Speaker 1: on stockpiles of imported wares until the goods actually had
Speaker 1: a profitable use. Zarabell said. The idea was, you have
Speaker 1: a good you can't take to market right now for
Speaker 1: some reason, and so you store it in a place
Speaker 1: where it will hold its value, but you won't get
Speaker 1: taxed on it right now, and so when they take
Speaker 1: it out of the freeport, it gets taxed. In recent years, though,
Speaker 1: freeports have come to play an increasingly important role in
Speaker 1: the burgeoning business of buying, selling, and investing in high
Speaker 1: value works of art. One manager of art for wealthy
Speaker 1: collectors told NPR in that her clients stored three d
Speaker 1: million dollars worth of art in various freeports across the world.
Speaker 1: The Geneva Freeports reportedly contains more than a million artworks,
Speaker 1: several times more than the collection of the Louver in Paris.
Speaker 1: BBC Arts editor Will Gumparts has described the facility as
Speaker 1: quote the greatest art collection no one can see. Its
Speaker 1: inventory has contained works by artists ranging from Leonardo da Vinci,
Speaker 1: al Greco and Renoir to Andy Warhol, but the Geneva
Speaker 1: facility has also been used to conduct trafficking in archaeological treasures,
Speaker 1: including Phoenician, Etruscan and Roman objects. Once, a Swiss prosecutor
Speaker 1: seized a Morianni painting from the Geneva Freeport, a painting
Speaker 1: that's been the subject of an ongoing legal dispute in
Speaker 1: the US involving an allegation that it was stolen by
Speaker 1: the Nazis from a Jewish art dealer back in ninety four.
Speaker 1: Swiss officials now carefully scrutinize the art that goes in
Speaker 1: and out of the facility. The freeports across the world
Speaker 1: may contain many works of art that have vanished from
Speaker 1: public view and whose whereabouts are publicly unknown. Zarabell said,
Speaker 1: there are a lot of things that just disappear right
Speaker 1: and we don't know how many were destroyed in World
Speaker 1: War two or might actually be sitting in a freeport.
Speaker 1: At Delaware Freeport, Deetle says that there isn't any mystery
Speaker 1: about the inventory as far as the government is concerned.
Speaker 1: He said, anything in my foreign trade zone is recorded
Speaker 1: by US customs, and added that officials will follow up
Speaker 1: as well. A quote. They come into the warehouse and
Speaker 1: make sure those items are still there and haven't been removed.
Speaker 1: He said he's also careful about whom he does business with. Quote,
Speaker 1: if there was somebody really shifty trying to come into
Speaker 1: my warehouse, I wouldn't let them in. We do due
Speaker 1: diligence on who our clients are. I know my clients,
Speaker 1: they're legit people. The demand for freeports has been driven
Speaker 1: in part by the evolution of art into an alternative
Speaker 1: investment vehicle. Art confunction is a hedge against factors that
Speaker 1: affect stock market investments. However, Deetle says the art collectors
Speaker 1: and investors he knows all have a genuine passion for it. Quote.
Speaker 1: At some point you run out of space on walls,
Speaker 1: you need to store some of it, and to be fair,
Speaker 1: storage in a freeport protects artworks from fading in the
Speaker 1: sunlight that streams in a nearby window, or being accidentally
Speaker 1: damaged by home inhabitants or guests. It's a guaranteed way
Speaker 1: to keep it safe. Of course, that does mean that
Speaker 1: you don't have immediate access to that art to enjoy it,
Speaker 1: study it and learn from it, and neither does anybody else.
Speaker 1: M Today's episode was written by Patrick J. Keiger and
Speaker 1: produced by Tyler Clang. For more on this and lots
Speaker 1: of other topics that may or may not make you
Speaker 1: want to eat the rich, visit how stuff works dot com.
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