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In recent years, the contemporary art market boom has been sustained by young guys on Wall Street who are now out looking for jobs and can't afford to buy art anymore," says Gary Nader, owner of an eponymous gallery in Wynwood. "I guarantee that Art Basel will not be as crazy this year. Not only are sales going to be soft, but many of the hotels on the Beach will have empty rooms, and you can even expect some local galleries to close their doors soon.
"I predict that visitor attendance will drop about 30 percent this year because of the financial crisis, but the sales that will happen will come from people buying blue-chip modern art."
Nader, who boasts a $100 million modern and contemporary art stock at his sprawling 50,000-square-foot space, is only one of several dealers who are convinced Art Basel — scheduled for December 4 through 7 — won't be pretty. It's the economic times, he says. Clients who used to spend $30,000 to $50,000 on art at his space have vanished. "What serious collectors are investing in now are names like Picasso, Chagall, Kandinsky, De Kooning, Warhol, Botero, and Basquiat," Nader explains. "They are investing in art as an asset or part of a wealth portfolio just like they would in diamonds or gold."
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Local dealer Bernice Steinbaum, who had a booth at the Miami Beach Convention Center during the first three editions of Art Basel, agrees that collectors will spend cautiously during this year's main fair and collateral events. "I think that those people who have the disease [of art collecting] will still have the disease but will not be spending as furiously. People will stick to brand products. A Chuck Close will always be a Chuck Close," Steinbaum says. "I think that attitude will affect all 25 fairs during Basel this year."
The dealer says she is taking a booth at Art Miami this December because it's the oldest fair in the city and has undergone an organizational change. "I think more people will be visiting [smaller] fairs like Scope, Pulse, and Art Miami, but may not be buying that much art from unknown names. And I also think many of the parties and events will be held back because of the times," she says. "Many people are holding back and watching the market. It will take six to 12 months to see the effect Wall Street will have on the art market, but a lot of people are not spending right now."
An indicator that South Florida and visiting art dealers might suffer an economic crunch this December can be found on the official website for Art Basel travel, www.turontravel.com. In past years, it listed dozens of South Florida hotels, many of which were sold out for Basel months in advance.
But this year, only a few of the hotels listed on the website had booked all of their rooms by late October. High-priced joints such as the Setai, with rooms going for up to $3,500 a night, and lower-priced places such as the Days Inn, at $160 a night, were sold out. But 31 of 39 local hotels with prices in between, including the Ritz-Carlton, Lowes, and Marriott, still had rooms available. That's a huge drop-off from previous years.
Nader says the unreserved rooms offer evidence that local dealers have strong reason to be squeamish about their purse strings, citing that only the very rich can afford to shop at the fairs. "Believe me, even some of these collectors who can spend $2 million on a painting are asking me for discounts of 25 percent. I tell them no." The middle-class collector who might invest $5,000 to $25,000 on an art piece will likely shy away. "I feel more for the lesser fairs than I do for Art Basel. They are going to take a strong hit, and the smaller visiting galleries will disappear."
The dealer points to the sluggish sales at London's Frieze Art Fair in mid-October and the recent Sotheby's and Christie's contemporary art auctions, where sales closed at margins well below 50 percent of presale estimates.
Some locals believe a deflated Basel piñata will benefit local art lovers, who are often left suffering visual dysentery after all the paintings are bought up. Lyle O. Reitzel, who runs eponymous spaces in the Dominican Republic and Wynwood, says the economic crisis might actually help improve the quality of the fairs. "What I see is that the mass of speculators that come and turn Art Basel into a circus may not come, and the crowds in general will be less. It might be better this way. Sure some people will be more cautious about spending, but the menu of quality in a less voracious atmosphere will improve."
Though Art Basel's main sponsor, UBS, had to be bailed out last week with a $60 billion lifeline by the government of Switzerland, local dealer Kevin Bruk says the fair remains a profitable venture for the crippled bank. "Their sponsorship of Basel is like $2 million. They are not going to pull out."
Bruk, who has had a booth at the convention center the past two years, says many of the Miami Beach hotels remain empty because of price gouging during the fair. "It's a rip-off. You see these minor hotels asking between $500 and $700 a night for crappy rooms and offering poor service. People have become sick of it and won't come back."