When Christopher Larson, a retired Microsoft executive and minority owner of the Seattle Mariners, got divorced this year in King County Superior Court, one of the biggest challenges proved to be dividing a $102 million art collection that included works by Claude Monet and John Singer Sargent.
When Christopher Larson and Julia Calhoun got divorced this year in King County Superior Court, some things were easy to divide up.
He got the 1911 Rolls-Royce Silver Ghost, valued at $1.4 million. She got the 11 Volvos. He got the baseball memorabilia, picked up for $7.4 million. She got the 1,983 Victorian posey holders ($5.5 million), small vases that women would wear in centuries past. Court records call Calhoun “perhaps the world’s leading collector.” If she’s not, someone else has a whole bunch of Victorian posey holders.
What proved a challenge to divide was the art — and that’s because they both loved the art, if in different ways. The divorce file calls their collection, appraised at $102 million, an “illiquid, non-income producing asset.” But art is more than that. We’re talking works by Pierre-Auguste Renoir, John Singer Sargent, Albert Bierstadt and Claude Monet.
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Twice, the two tried to divvy up the art so that each would get about $51 million worth. Twice, they failed. So the task fell to the court. Confronted with this august inventory of paintings and sculpture, and loath to go “eeny meeny miny moe,” Judge William Downing asked the two for their help in figuring out who got what. The result became a study in how people measure the value of art, and which counts for more — pragmatism or sentiment.
First, the parties:
Larson is a retired Microsoft executive, minority owner of the Mariners, and a graduate of Seattle’s private Lakeside School and Princeton University, where he studied economics and computer science. Calhoun is a devoted philanthropist, daughter of a working-class family, and a community-college student before graduating from Seattle University, where she majored in English literature.
Bill Gates introduced them. They wed in 1986 and separated in 2009.
Larson’s wealth traces to 7th grade. It was then, in 1971, that he began programming computers. At age 16 he began working part time at Microsoft. In 1981, upon graduating from college, he agreed to work for Microsoft full time, provided he received an equity interest in the company, which had yet to go public. In economics lingo, this would be called a good move. His interest was 0.5 percent; he paid $56.60 and, in return, received 56,600 shares.
In the decades that followed, Microsoft’s stock split again and again. Those 56,600 shares turned into millions of shares worth hundreds of millions of dollars. After getting married, Larson, as a Microsoft executive, accumulated additional stock and other assets, creating a separate community estate worth more than $100 million.
Between 1986 (wedding) and 1999 (pre-bubble burst), “Microsoft stock appreciated more than 700-fold,” according to one court filing, which adds that as the couple’s wealth soared, “the parties spent freely.”
For $5.7 million they bought a couple of properties in The Highlands, a gated community in Shoreline, overlooking Puget Sound. Then they spent $160 million to spruce the place up. They dotted the grounds with a turtle island, high-end statuary and a children’s playhouse, described in court documents as “Tudor style,” with leaded-glass windows and hardwood floors.
The main house, “Norcliffe,” is a “grand entertaining home,” the husband wrote in court documents. The couple stocked the place with Waterford crystal (“custom made with gold rims”) and installed Tiffany windows along with “gold-plated chandeliers” and “walls from an ancient ruin,” according to court filings. “Norcliffe was intended to be perfect,” those filings say. The home has 25,000 square feet, 14 bathrooms, and a ballroom that can accommodate 200.
Doing well and doing good
If the couple’s spending was epic, so was their generosity. They donated more than $150 million to charity, according to court records, pouring money into education and other causes for kids.
More than that, in an investment that goes well beyond money, they cared for about 100 foster children. Downing, the judge, summed the two up this way: “Both of these impressive people will go on to do well and to do good.”
Plus, Larson helped save the city’s baseball team, playing a leading role in keeping the Mariners here when it appeared they might split for Florida. So there’s that, too.
Now, the art:
To be divided were 47 pieces, including 43 paintings. The paintings run deep on 19th-century American art, featuring the likes of William Merritt Chase, Thomas Moran, Frederic Church and Sanford Robinson Gifford.
Perhaps the easiest way to call it even would have been to sell everything and split the proceeds. But the economics of art worked against that. For fine art, any gain in value from purchase to sale is taxed at 28 percent, more than for most assets. Then there’s the cut taken by dealers and auction houses. And then there was the fear, voiced in one court filing, that the couple owned “so much 19th Century American artwork” that selling it all would saturate the market, driving down prices.
When the parties attempted to divvy up the art on their own, the chief obstacle — the “elephant in the ballroom,” as it was called in court records — was a painting by Jasper Francis Cropsey, an American 19th-century landscape artist.
She didn’t want it. He wanted it, but it was hanging in a house in London that she’d be getting in the divorce. And England, which apparently has a thing for Cropsey, wasn’t going to let the painting leave its shores without a struggle, insisting upon an export license.
The painting, “Richmond Hill in the Summer of 1862,” is a landscape of the River Thames and its surrounding countryside. To England, it has historical value. To appraisers, it’s worth $8.5 million. To Calhoun — who wrote in court records, “It was Chris who wanted the painting in the first place” — the landscape probably belongs on The New York Times’ The Meh List. “Not hot. Not not. Just meh.” It’s OK, if you like brown.
Sentiment vs. pragmatism
In February, Judge Downing asked both parties to express, in writing, their wishes for how the art should be assigned.
Calhoun wrote seven pages, going through the pieces one by one. At times she described her emotional reaction to the art. The Monet, she said, was “incredibly soothing to look into.”
Some scenes she related to her life. Of Theodore Robinson’s “Day Dreams,” she wrote: “A young woman with a pensive expression. The place of her fanciful moments seems to be an orchard and makes me think of my place of origin, Wenatchee.” A Hermann Herzog painting, “Going Home with Flock of Sheep,” summoned thoughts of generations past. Both sides of her family “have histories of raising sheep, going back to our Irish roots.”
She critiqued, calling paintings “lovely” or “charming,” or saying that a Charles Sprague Pearce piece “gains points with me for the portrayal of beauty that is not pale skinned and blond.”
Larson’s objectives were more businesslike.
He said he wanted his collection to be “well-balanced and diversified.”
He said he needed artwork to secure a line of credit with JPMorgan Chase — and that the bank would count, as collateral, only those paintings worth $750,000 or more.
And he said: “I have lots of wall space to cover in the Norcliffe house, and so I do not want a collection consisting of very few expensive paintings.”
Lots of wall space to cover. This guys can relate to. A guy rents an apartment and what does he do? He scans the walls and finds posters to fill up the space. It’s just that Larson has more space to fill and more money for posters.
To measure this particular objective — the desire to cover maximum wall space — we dropped the 43 paintings into a spreadsheet and performed a quick calculation (value divided by dimension) to arrive at each painting’s “appraised value per square inch.”
For Larson to get his wish, he needed to get lots of square inches for minimal cost (while at the same time racking up enough big-ticket items to keep JPMorgan Chase happy).
At one end of the spectrum was William Medcalf’s “Little League,” a bargain at $17.34 per square inch. At the other was John Singer Sargent’s “Dans les Oliviers à Capri,” a masterpiece that, per square inch, clocked in at a whopping $26,666.67.
Who got what
So how did it turn out? Well, give the judge a hand. We’ll spare you the details, but after adding it up, it looks like Larson’s collateral demands were met.
Calhoun got the two pieces she wanted most (a Monet and a Sargent), as well as the piece she wanted least (the Cropsey). She got the piece that reminded her of Wenatchee.
Calhoun’s 19 paintings averaged $3,082 of appraised value per square inch.
Larson’s 24 paintings came in at $1,942 per square inch. That lower number is good. It means he can cover more wall space.
All together, Larson’s paintings will cover 25,505 square inches, or about 177 square feet.
Now for one last computation: According to the Home Depot Paint Calculator, a half-gallon — or two quarts — would cover almost exactly the same amount of wall space.
So Larson got two quarts’ worth. But in his case, each quart would cost about $25 million. That’s what happens when you replace latex with oil and have it applied by Bierstadt and Renoir.
After the judge’s order was issued, Larson and Calhoun, on their own, elected to do some trading. So some pieces awarded to Calhoun now belong to Larson, and vice versa. Great art endures, but ownership rarely does.
Ken Armstrong: 206-464-3730 or email@example.com