Stolen Artwork Worth $9 Million Recovered in L.A. : Crime: Authorities arrest two suspects, one of whom allegedly worked at the storage facility from which the nine paintings were taken. The works, including a Picasso valued at : $5 million, were not damaged.

Investigators on Tuesday recovered nine works of modern art--including paintings by Picasso, Degas and Chagall--valued at $9 million and arrested two San Fernando Valley men a year after the uninsured masterpieces were stolen from a Northridge storage warehouse.

In 2 a.m. raids, squads of FBI agents and police arrested Peter MacKenzie, 43, a carpenter, at his Chatsworth home on suspicion of burglary, and Alan R. McArthur, 37, an electrician, at his Granada Hills home on suspicion of receiving stolen property. Both were being held in lieu of $500,000 bail.

Police found eight of the stolen paintings--including a work by Picasso worth an estimated $5 million--hidden in a wall in MacKenzie’s $400-a-month ranch house. The ninth painting was found wrapped in a dirty pillowcase and leaning against a bureau in McArthur’s bedroom.

Authorities said little about what led them to the suspects but proudly displayed the paintings--all but one in gilded frames--at a news conference Tuesday. The paintings were not damaged, they said.

“We made a total recovery,” said Detective Bill Martin of the Los Angeles Police Department. “As far as burglaries go, this was one of the most major of all time.”

The paintings were reported stolen Feb. 5, 1992, when Eve Weisager, 85, of Van Nuys, discovered them missing from a 10-by-12-foot room in a Public Storage warehouse in the 9300 block of Shirley Avenue. Weisager told police she had placed them there because she did not have room for them in her apartment.

Weisager said Tuesday that she “couldn’t be happier” that the paintings had been recovered. “I thought I’d never see them again.”

Police said there was no sign of forced entry into the storage room and that Weisager’s other belongings were not taken. At the time, police said they were investigating the possibility that the theft was an inside job.

On Tuesday, MacKenzie’s landlord and neighbor said he worked part time as a janitor for Public Storage. Police said they were trying to confirm his employment.

The FBI joined the investigation last year on the presumption that the paintings would be moved across state lines to be sold. But they apparently never went more than a few miles from the storage facility.

“Actually, they have been holding the paintings, waiting for this to cool down,” said Martin, a police expert in art crime.

John Morley, assistant special agent in charge of the FBI’s Los Angeles office, said the arrests were spawned by an informant’s tip. The two suspects were placed under surveillance and, at one point, Morley said, “our agents observed an individual carrying what clearly appeared to be a painting” into McArthur’s house. Martin said the officers searched MacKenzie’s home for nearly an hour before an FBI agent spotted screws holding sheet rock in place in a bedroom. The agent became suspicious because sheet rock is usually installed with nails, and the agents found the eight paintings behind the wall.

The recovered masterpieces are “The Party” by Pablo Picasso; “The Balleteuse Fixing Her Shoe” by Edgar Degas; “Flowers on a Window Sill” by Marc Chagall; “Moroccan Chief” by Eugene Delacroix; “Head and Shoulders of a Young Woman” by Amedeo Modigliani; “Tonton, Le Chien de Rejane” by Jean Baldini; “Well in a Spanish Courtyard” by Andre Derain; “Woman Overlooking Garden Through Window” by Louis Valtat, and “Circus Scene” by Chaim Soutine.

Weisager said Tuesday that she received the paintings from her sister several years ago. She said she and her sister, whom she described as a very wealthy woman, used to go to art auctions together in New York and Paris.

But Weisager said she decided 13 years ago that she did not have room for the paintings in her small apartment and that they would be safest in the storage facility.

MacKenzie was a carpenter who had difficulty finding work in recent years and took a part-time job clearing rooms for Public Storage, said his landlord, Sharon Friedman, who lives in a house on the property where MacKenzie rented a smaller house. “I know he worked for Public Storage because I saw the checks when they came in the mail,” Friedman said.

She said that MacKenzie often showed her pieces of crystal and china, and said that he had recovered them from dumpsters at Public Storage warehouses.

Times staff writer Timothy Williams contributed to this report.