Detroit financial crisis

Politics & Government
12:06 am
Fri June 14, 2013

Detroit's emergency manager launches key talks with creditors

Kevyn Orr, Detroit's state-appointed emergency manager.
State of Michigan Michigan.gov

Detroit’s emergency manager Kevyn Orr sits down with the city’s major creditors Friday.

The meeting sets up negotiations that could help Detroit avoid filing for bankruptcy—or lay the groundwork for it.

Orr will gather all the city’s big creditors—unions, retirees, and banks—to pitch his plan.

They’ll all be asked to take some major losses to help Detroit shed some of its crippling debt load, estimated at a least $15 billion.

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2:33 pm
Tue June 11, 2013

Column: Detroit politicians hold meetings like political amateurs

Lead in text: 
Deadline Detroit's Jeff Wattrick witnessed the scene outside last night's public meeting with emergency manager Kevyn Orr. Other politicians and cities seem to handle large crowds and dissent without much problem. Detroit politicians, Wattrick argues, "stage manage these things like Soviet bureaucrats."
It can be hard sometimes to understand the vitriol of Detroit activists who opposed seemingly common-sense reforms like converting Belle Isle from a public city park into a public state park. It also can be hard to understand the outrage stemming Kevyn Orr's appointment as Detroit emergency manager.
Arts & Culture
3:09 pm
Fri June 7, 2013

Detroit's Van Gogh better off in LA? Freep writer says that's crazy

Nancy Kaffer says Detroiters should "keep an eye out for a blonde lady with a chisel near the Diego Rivera murals."
DIA

In a recent piece in Bloomberg, Virginia Postrel (a political and cultural writer) argues that the "cause of art would be better served" if the DIA's major works were in other, 'more deserving' cities.

Her argument:

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Politics & Government
11:36 am
Fri May 31, 2013

Other cultural institutions on notice after DIA assets counted

The Detroit Institute of Arts.
DIA

The Detroit News' Christine Ferretti writes this morning that other Detroit cultural institutions are on high alert after the news came that assets at the Detroit Institute of Arts are being counted as potential assets of the city that can be sold to pay off debts.

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Politics & Government
11:34 am
Fri May 24, 2013

Could the DIA be forced to sell art to pay creditors?

DIA

Detroit's emergency manager, Kevyn Orr, wants to account for assets held in the Detroit Institute of Arts, which has sparked fears that part of the collection could be sold in the future.

We've posted information here, and Michigan Radio's Sarah Cwiek will have an update for us later today.

Update 11:34 a.m.

The DIA just put out this statement on their Facebook page:

"The DIA strongly believes that the museum and the City hold the museum’s art collection in trust for the public. The DIA manages and cares for that collection according to exacting standards required by the public trust, our profession and the Operating Agreement with the City. According to those standards, the City cannot sell art to generate funds for any purpose other than to enhance the collection. We remain confident that the City and the emergency financial manager will continue to support the museum in its compliance with those standards, and together we will continue to preserve and protect the cultural heritage of Detroit."

9:19 a.m.

Detroit is in a big financial hole, and the man in charge of righting the ship wants to know what can be sold.

Mark Stryker and John Gallagher of the Detroit Free Press report that Detroit's emergency manager, Kevyn Orr, is considering whether the DIA's art collection should be counted as assets that can be sold to pay debts:

Liquidating DIA art to pay down debt likely would be a monstrously complicated, controversial and contentious process never before tested on such as large scale and with no certain outcome. The DIA is unusual among major civic museums in that the city retains ownership of the building and collection while daily operations, including fund-raising, are overseen by a nonprofit institution.

Stryker and Gallagher report on the many hurdles facing such a sale, including ...

  • restrictions on selling off city assets in municipal bankruptcy law,
  • museum ethics and operating rules that forbid selling art,
  • opposition from patrons who donated art,
  • and major a public outcry against such a sale:

“There would be hue and cry the likes of which you’ve never heard,” said Ford Bell, president of the American Alliance of Museums in Washington, D.C. “The museum should be a rallying point for the rebirth of Detroit and not a source of funds.”

Orr spokesman Bill Nowling said there's no plan yet to sell any asset of the city, but he said all the city's assets must be accounted for.

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Law
5:10 pm
Wed May 15, 2013

Don't know much about Detroit's new Chief of Police? Read this.

James Craig was named Detroit's Chief of Police today
LinkedIn

Detroit emergency manager Kevyn Orr named former Cincinnati Police Chief James Craig as Detroit's new Chief of Police.

Michigan Radio's Sarah Hulett attended the press conference, where Orr announced that Craig will begin July 1, 2013:

The new police chief of Michigan's largest city says he's committed to reducing violence and making the Detroit Police Department a premier police agency.

This announcement followed the plan that Orr outlined in his 45-day report on Detroit's economic status. 

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Politics & Government
12:37 pm
Tue May 14, 2013

Detroit Mayor Dave Bing won't seek re-election

Detroit Mayor Dave Bing will not seek re-election.
Kate Davidson Michigan Radio

Detroit Mayor Dave Bing will not seek re-election.

Bing made that announcement after months of indecision. He frustrated reporters weeks ago when he pulled petitions for re-election, only to say he hadn't committed to running.

Then he called a press conference, and handed out pamphlets highlighting his successes in office.

Then he spoke for nearly 20 minutes about his achievements before announcing "that I have decided not to seek another term as mayor Detroit."

Bing said his political career might not be over.

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Politics & Government
12:21 pm
Mon May 13, 2013

Kevyn Orr report shows grim picture of Detroit's finances and services

He spent more than he made. 'Mr. Micawber' from David Copperfield.
Credit wikimedia

It's a simple formula. Don't spend more than you make.

Charles Dickens' character "Mr. Micawber" expressed it this way in David Copperfield:

"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

"Misery" describes the city of Detroit's problems over the last several years.

Detroit has been breaking Micawber's rule for some time. In his report released last night, Detroit Emergency Manager Kevyn Orr wrote this:

Excluding proceeds from debt issuances, the City's expenditures have exceeded revenues from fiscal year 2008 to fiscal year 2012 by an average of $100 million annually.

Here's a representation of Detroit spending more than it makes in graph form:

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Politics & Government
2:12 pm
Thu April 25, 2013

Detroit Mayor Dave Bing takes step toward re-election bid

Detroit Mayor Dave Bing
Kate Davidson Michigan Radio

DETROIT (AP) - Detroit Mayor Dave Bing has taken a step toward seeking a second four-year term leading the city that now operates under a state financial manager.

Bing picked up petitions Thursday afternoon at the city clerk's office for a spot on the August primary ballot. The top two vote-getters advance to November's general election.

He's been silent for months on his re-election intentions as Detroit entered state oversight. Gov. Rick Snyder in March named bankruptcy attorney Kevyn Orr as Detroit's emergency manager.

Bing says he's working closely with Orr, who must approve all financial decisions.

The 69-year-old Bing was elected mayor in May 2009 to complete the remaining months of disgraced ex-mayor Kwame Kilpatrick's second term. Voters re-elected elected Bing that November.

He inherited a budget deficit that now stands at $327 million.

Politics & Government
2:37 pm
Fri April 5, 2013

EM protestors stage a 'slowdown in Motown' along I-75 on opening day

The highways around Detroit are being used for displays of civil disobedience over the emergency manager law.

It started last month, and has carried to opening day.

MLive's Gus Burns writes that he was on his way to cover opening day for the Tigers this morning when he decided to tag along with the protestors.

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Politics & Government
12:03 pm
Mon March 25, 2013

Orr begins tenure as Detroit's emergency manager

Detroit's emergency manager, Kevyn Orr.
State of Michigan

DETROIT (AP) - Bankruptcy attorney and turnaround specialist Kevyn Orr has arrived at Detroit City Hall for his first day on the job as emergency manager.

Orr has said he expects to sit down with Mayor Dave Bing Monday and meet with some City Council members.

He was appointed earlier this month by Gov. Rick Snyder and takes over the finances of the largest city in the country to come under state oversight.

Orr also plans to look at the city's financial data to help develop his plan of action in tackling Detroit's fiscal crisis. The city has a $327 million budget deficit and more than $14 billion in debt.

Some, including a group led by prominent Detroit pastors, have said they will protest Orr's appointment and Michigan's emergency manager law.

Politics & Culture
3:44 pm
Thu March 21, 2013

Stateside for Thursday, March 21, 2013

Millions of undocumented immigrants in this country are hoping this is the year for immigration reform. On today's show, we explore what the future holds for mixed-status families.

And, it's being called "one of the most dramatic ecological recovery stories in North America." Why beavers along the Detroit River are such a big deal.

And, it’s been a week now since Governor Snyder announced Kevyn Orr as Detroit’s emergency manager, and it was a week ago that we last spoke with Daniel Howes, business columnist at the Detroit News. We checked in with Howes about the prospect of a Detroit recovery.

All that, and roller derbies and march madness, on today's show.

Stateside
5:06 pm
Tue March 19, 2013

Detroit's emergency manager is upbeat about city's potential

Detroit emergency manager Kevin Orr
State of Michigan

The following is a summary of the above audio. To hear the full interview, click above.

It's been five days since Governor Snyder presented Kevyn Orr as the emergency manager of Detroit.

Many were quick to comment about Orr’s “introduction” to Michigan and that he seemed well-suited for the job.

He is a U-M law school alumnus, an attorney specializing in bankruptcy law and he helped guide Chrysler through its bankruptcy.

At his introductory press conference last Thursday with Governor Snyder and Detroit Mayor Dave Bing, Kevyn Orr certainly seemed ready and willing  to take on the gargantuan task of “fixing” Detroit’s dire financial crisis.

Within the first day of that press conference, it was reported that Orr had some financial troubles of his own. He had liens on his home over unpaid unemployment insurance taxes.

"It is quite embarrassing when something like that comes up, but I took care of that as soon as I could and paid it off," Orr said. "Frankly, I have been too focused on my professional obligations and not as focused enough on my private obligations."

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Politics & Government
8:12 am
Tue March 19, 2013

"A modest proposal" for Detroit's property tax collection woes

Credit Sarah Cwiek / Michigan Radio

A Detroit-based technology firm says it has an elegant solution to the city's property tax-collection woes.

Loveland Technologies has been mapping the city’s tax-foreclosed properties online. And Loveland founder Jerry Paffendorf says they’ve come across some remarkable data along the way, like this: “The city of Detroit is nearly half a billion dollars behind on property tax collection, when you add in penalties and interest.”

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Politics & Government
5:12 pm
Mon March 18, 2013

Detroit emergency manager Orr pays outstanding tax bills

Kevyn Orr speaking at the press conference announcing his appointment.
State of Michigan

Detroit's new emergency manager said he was embarrassed when Detroit News reporters showed him records of four tax liens placed on his house in Maryland.

Orr said he didn't know anything about the liens when shown records of them Friday morning by The Detroit News.

"I don't know what they are," Orr said, as his new boss, Gov. Rick Snyder, sat next to him in The News' offices. "That's surprising to me, to be honest."

Orr promised to take care of the matter right away. 

There was apparently an oversight related to a childcare provider unemployment insurance payment," Wurfel wrote in an e-mail. "Immediately upon learning of the potential issue just today, he took action at once to look into and resolve with the state of Maryland."

Now, Matt Helms of the Detroit Free Press reports the matter has been taken care of: 

A Maryland official confirmed today that two payments have been made on tax liens filed against Kevyn Orr, Detroit’s emergency financial manager after the state went after unpaid unemployment insurance on child care for his two children.

Maryland Department of Labor, Licensing and Regulation spokeswoman Maureen O’Connor told the Free Press today that she could not discuss specifics of the liens filed against Orr, but said two payments were made on outstanding taxes he owed, so the liens “are in the process of being satisfied.” She declined further comment.

Gov. Snyder said things happen...

“I just view it as that’s not something he was aware of,” Snyder said. “Those things can happen where you had a nanny helping you in your house, you took care of part of the issues and your accountant missed something. And you just go get it taken care of and move ahead.”

When we asked our Facebook fans on Saturday whether they thought this news was a big deal or not... most said, "It's a big deal!"

But maybe Debra Burr put it best when she closed out the comment thread:

"Okay. Now what?"

Politics & Government
10:31 am
Fri March 15, 2013

Detroit's new emergency manager and Michigan governor make the talk show rounds

Gov. Snyder and Detroit emergency manager Kevyn Orr appear on MSNBC this morning.
YouTube

Gov. Rick Snyder and Detroit's new emergency manager Kevyn Orr made the talk show rounds this morning.

Gov. Snyder went toe to toe with Rev. Al Sharpton who challenged him that appointing an emergency manager in Detroit is undemocratic.

Sharpton said the appointment of Orr as emergency manager of Detroit "undermines people's right to vote, because the only one who voted for Kevyn was you."

Watch Snyder's response here:

Snyder said the mayor and city council will still have input in the process.

Orr mentioned the turnarounds of Baltimore and Pittsburgh as models for how the city of Detroit can get back on a solid financial footing.

Orr and Snyder also appeared on WWJ this morning and I'm looking for that audio. If I find it, I'll post a link to it here.

Opinion
8:25 am
Fri March 15, 2013

Commentary: Emergency Manager for Detroit

Jack Lessenberry's essay Emergency Manager for Detroit

When Governor Snyder announced he was appointing an emergency manager for Detroit, I was in Traverse City, having lunch with a former governor who long ago tried his best to get the state to help Michigan’s largest city stay on its feet.

William Milliken served as governor longer than anyone has or ever will – fourteen years.

He is a firm believer in something Rick Snyder said earlier this week – that it is not Detroit vs. Michigan, but a situation where a healthy Detroit is essential to the entire state.

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Politics & Government
11:53 pm
Thu March 14, 2013

Can Kevyn Orr pull off "one of the greatest turnarounds in the history of this country?"

Kevyn Orr
Credit Sarah Cwiek / Michigan Radio

Kevyn Orr is Detroit's emergency manager

It’s official: Detroit has an emergency manager.

His name is Kevyn Orr. And it’s fair to say that he charmed even some skeptical observers when he was introduced to Detroit Thursday.

Orr isn’t exactly a household name. He was—until he quit his job Friday—a partner at the Jones Day law firm in Washington, DC. He’s a bankruptcy lawyer and turnaround expert who helped Chrysler through a successful managed bankruptcy.

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Stateside
5:26 pm
Thu March 14, 2013

Is municipal bankruptcy Detroit's next step?

State of Michigan screen grab

We talked throughout today's Stateside about what an emergency manager might do when they first come to Detroit.

Daniel Howes, business columnist at the Detroit News, joined us as he does most weeks.

In his column today, he wrote about bankruptcy being Detroit's next step.

That's even after the appointment of an emergency manager.

Howes broke down for us how a municipal bankruptcy for a big city differs from a business or personal bankruptcy and what a bankruptcy would mean for the city of Detroit.

Kevin Orr, Detroit's new emergency manager, said today he hopes he doesn't have to use the 'cudgel' of bankruptcy. He instead hopes to get consent in a financial turnaround.

Listen to the full interview above.

Weekly Political Roundup
5:01 pm
Thu March 14, 2013

Will the state send cash to Detroit?

Mayor Dave Bing stands beside Governor Rick Snyder as Snyder annouces Kevyn Orr (right) as his choice for Detroit emergency manager.
State of Michigan screen grab

Each week we speak with Ken Sikkema, former Senate Majority Leader and Senior Policy Fellow at Public Sector Consultants, and Susan Demas, political analyst for Michigan Information and Research Service.

Governor Rick Snyder officially announced the appointment of an emergency manager for Detroit today. He named Kevyn Orr, a Washington D.C. lawyer who represented Chrysler in it’s 2009 bankruptcy as his manager of choice. Orr has many ties to Michigan including graduating from the University of Michigan Law School.

" I think the city is going to need some cash in order to meet some obligations and restructuring, whether or not that is going to be an easy sell is a different matter," said Demas.

"If this gentleman [Kevyn Orr] can actually show some results to get this city in the right direction than I think the attitude in Lansing would be different toward more money, and more investment," Sikkema said.

Listen to the full interview above.

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