Detroit Journalism Cooperative

To focus on community life and the city’s future after bankruptcy, five nonprofit media outlets have formed The Detroit Journalism Cooperative. The Center for Michigan’s Bridge Magazine is the convening partner for the group, which includes Michigan Radio, Detroit Public Television, WDET and New Michigan Media, a partnership of ethnic and minority newspapers.

To see all the stories produced for the Cooperative, you can visit Next Chapter Detroit.

Stories from Michigan Radio are shown below.

Detroit skyline.
user JSFauxtaugraphy / Flickr

Today a special edition of Stateside with the Detroit Journalism Cooperative on Detroit after bankruptcy:

  • We examine how the city is trying to get public services back on track with new initiatives for street light replacement and more buses on the road. 
  • Residents discuss the benefits of living in Detroit’s rich cultural environment and weigh these costs with continuing to deal with crime in the area.
  • Many of the issues that led the city of Detroit to bankruptcy are also affecting Detroit schools. We review how Detroit’s education system has adjusted to the decline in funding and enrollment.
  • Detroit’s central business district has gained attention after large acquisitions from private corporations, but many residents worry this growth is bypassing neighborhoods.
  • More companies are also seeing Detroit as an opportunity, establishing themselves in the area and hiring more residents of the city.

Detroit won’t be quite ready to exit bankruptcy until next month, city lawyers told Judge Steven Rhodes at a hearing Monday.

Judge Rhodes has already approved the city’s bankruptcy restructuring plan. But the city must still complete a couple steps before it officially leaves Chapter 9.

It needs to make sure its two-year budget reflects the plan’s terms, and release details of the plan to financial markets.

Key Bank building in Ann Arbor, MI
OZinOH / flickr.com

Michigan banks have made an impressive recovery since January 2011, according to quarterly data compiled by BauerFinanical Inc., a Florida-based ratings service.

As Tom Henderson from Crain's Detroit Business explained:

Foreclosure sign
Jeff Turner / Michigan Radio

Wayne County has begun tax foreclosure proceedings on nearly 75,000 properties, up 34% from 56,000 last year.

Treasury workers last month began posting notices on properties the county plans to auction next fall if owners don't pay taxes or agree to payment plans.

There are 62,000 properties in Detroit owing $326.4 million in taxes, interest and fees that are set to be foreclosed. Motor City Mapping data analyzed by Loveland Technologies indicates that 37,000 of those Detroit Properties are occupied.

Steve Carmody / Michigan Radio

DETROIT (AP) - Cold weather will slow water shutoffs in Detroit, but not halt a nearly yearlong push to collect on past due accounts.

  Detroit Water Department spokeswoman Curtrise Garner tells The Associated Press that crews will stop disconnections only during long bouts of below freezing temperatures when the ground is too hard to reach water connections.

  Service has been disconnected to 31,300 customers since Jan. 1. A several-week moratorium allowed some customers to enter into payment plans.

Detroit skyline.
user JSFauxtaugraphy / Flickr

Detroit's historic and unprecedented bankruptcy came together last Friday for approval from Judge Steven Rhodes.

The Detroit News recently provided in-depth coverage from business columnist Daniel Howes and reporters Chad Livengood and David Shepardson.

We talked to Howes about how the case was completed in 15 months, about the key players, and about what must be done to avoid repeating mistakes.

You can listen to our conversation with Daniel Howes below:  

The group tasked with making sure post-bankruptcy Detroit stays solvent met for the first time Wednesday.

The nine-member Detroit financial review commission will serve as the last word on the city’s financial decisions for at least three years.

The panel will review and approve all city budgets, major contracts and collective bargaining agreements during that “control period.”

Detroit's riverfront.
Ian Freimuth / Flickr

Matt Helms at the Detroit Free Press reports that Mayor Mike Duggan has some sticker shock over the cost of Detroit’s bankruptcy.

Helms reports that Duggan “is alarmed” that the city will have to pay lawyers and consultants close to $200 million. Duggan worries the payout could put the city at risk of not meeting the terms of the city’s plan of adjustment – a plan the federal bankruptcy judge approved last week.

More from Helms and the Detroit Free Press:

Three people familiar with Duggan's views on the fees told the Free Press that the mayor believes the total fees could climb close to $200 million, an amount he worries could jeopardize the city's ability to meet the bankruptcy's financial terms. That compares to the roughly $100 million that many bankruptcy experts predicted would be the cost when Detroit filed for the nation's largest-ever municipal bankruptcy in July 2013.

A spokesperson for former emergency manager Kevyn Orr disputes that the bill could reach $200 million, saying the fees charged to the city reached $144.3 million as of October 31.

Sarah Cwiek / Michigan Radio

Having secured court approval for its bankruptcy restructuring last week, Detroit is now ready to emerge from bankruptcy.

But some Detroit residents and activists say that plan sacrificed both democracy and the public interest.

The group Detroiters Resisting Emergency Management says the bankruptcy process was about imposing financial solutions on social and political problems.

And they believe the newly-approved “plan of adjustment” won’t benefit the vast majority of Detroiters.

Whenever surveys are taken as to which professions are the most trusted and admired, journalists are pretty near the bottom. We used to beat out used car salesmen, but I think that thanks to regulation, they are in better standing these days.

Today, journalists and lawyers usually take turns at being the least admired. I don’t propose to talk about why lawyers are so unpopular; after all, I don’t want to be sued. But I do know why reporters are held in such low repute.

Part of it is our own fault.

As in, when a TV reporter sticks a microphone in the face of somebody whose child has been murdered and asks, “how do you feel?”

But even when we do our jobs well, we make people dread us. We tell you that the system doesn’t work, and the politicians are corrupt, and the water is tainted, and the priest is embezzling from the parish - things like that.

That’s what we are supposed to do.

We seldom show up just to tell you good news. Maybe the best thing we can say about our society is that decent behavior still isn’t news.

Except - in some contexts.

Detroit will exit bankruptcy.
Ian Freimuth / Flickr

Federal bankruptcy Judge Steven Rhodes has approved Detroit's plan to exit bankruptcy. Rhodes' ruling comes after several major creditors reached deals with the city in recent weeks.

The ruling clears the way for the city to shed around $7 billion in debt.

More from the Detroit News:

Part of the Diego Rivera mural in the DIA. Foundations pulled together to help save the art in the museum.
Joseph Gallegos / Flickr

It’s hard not be awed by the scale and detail in Diego Rivera’s Depression-era “Detroit industry” murals at the Detroit Institute of Arts, but these scenes depicting both the splendor and hardship of an industrial powerhouse were potentially at risk in the city’s bankruptcy.

That’s because right now, Detroit owns the museum and its world-class collection.

And that made Detroit’s creditors—collectively owed billions of dollars—ask: Why shouldn’t the city have to sell at least some of it to pay them?

Darren Walker, President of the Ford Foundation, says the idea was offensive.

“The idea that the art could actually be auctioned off was so … antithetical to our idea of democracy and the role of cultural organizations.”

But that fear actually turned out to be an important lever in the bankruptcy case.

Charles & Adrienne Esseltine / Flickr / Flickr

The City of Detroit and Wayne County are making concerted efforts to tackle two big problems: the lack of money, and blight.

They’re zeroing in on abandoned houses and homes where owners have fallen behind on their taxes - pay up or face foreclosure.

The foreclosed houses are being offered to those who will fix them up, keep them up, and pay taxes.

What does all of this mean for the people who've been living in those houses? Writer Rose Hackman looked into that question. Her story, "One Fifth of Detroit's Population Could Lose Their Homes," is in The Atlantic.

Detroit has barely half the number of people it did 30 years ago, and only about a third of its population 60 years ago.

The city is now waiting, as we all are, to see how federal Judge Steven Rhodes will rule on the city’s plan to get out of bankruptcy. Nobody has any illusions the future will be easy.

But here’s something to think about: there was no mass arson in the city last night. Devil’s Night seems truly a thing of the past.

Even that term is politically incorrect. They call it Angels’ Night now.

Detroit’s bankruptcy trial wrapped up Monday with closing arguments.

At issue: whether the city’s plan of adjustment to restructure its debt is “fair and equitable” to its various creditors, as required by Chapter 9 of the municipal bankruptcy code.

Judge Steven Rhodes must also decide if the plan is “feasible”—whether Detroit can balance its books and avoid slipping back into bankruptcy.

City of Detroit

Detroit emergency manager Kevyn Orr took the stand again Tuesday in the 22nd day of the city’s bankruptcy trial.

Orr testified mostly about Detroit’s recent settlement with bond insurer Financial Guaranty Insurance Corporation. That deal is outlined in a draft of the ninth version of Detroit’s plan of adjustment (the city’s proposal to “adjust” its debts in bankruptcy court).

Detroit skyline
Ian Freimuth / flickr.com

Members of the United Nations Human Rights Commission heard testimony in Detroit this week from citizens who are struggling to secure affordable water and housing.

Nicole Hill is a Detroiter who has had her water shut off twice this year. Hill says the water department tells her she owes more than $6,000 — a number she vigorously disputes.

“I have asked for a hearing, and I was told that I could possibly get a hearing date sometime in 2015,” she said.

For Mignon Jennings, the cost of her water bill has put her in danger of losing her Detroit home.

“$3,000 for a water bill for one year? That’s ludicrous. That’s crazy. And I believe something needs to be done.”

The UN panel has criticized Detroit’s policy of cutting water service to people with delinquent bills.

Panel members issued recommendations on the situation Monday. They also met with Mayor Mike Duggan.

Duggan's chief of staff, Alexis Wiley, defended the administration's response to the water shutoffs, pointing out that the number of customers on payment plans has almost doubled to about 33,000 since Duggan announced his 10-point plan on dealing with them in August.

Wiley said the meeting was unproductive. "Unfortunately, it became clear shortly into the meeting that the UN representatives had reached their conclusions and prepared their recommendations before the meeting had even begun," she said in a statement, that also accused the UN of singling out Detroit for criticism of a "standard practice among utilities."

Wikipedia

Detroit has reached a settlement with its last major holdout creditor in bankruptcy court.

Bond insurer Financial Guaranty Insurance Corporation holds $1.1 billion in Detroit debt. It insured a bad deal on city pension debt whose legality has been questioned.

FGIC had been the city’s last big foe in bankruptcy court. By signing onto the plan of adjustment Detroit has proposed to restructure its debts, it’s removed another hurdle slowing down the city’s exit from bankruptcy.

After a week-long recess, Detroit’s bankruptcy trial resumed Tuesday.

City lawyers spent more than two weeks making their case for Detroit’s proposed plan of adjustment to restructure its debts in bankruptcy. They rested last week.

Now, objecting creditors get their chance to argue that plan doesn’t meet the requirements of the municipal bankruptcy code.

Laura Bartell, a professor of bankruptcy law at Wayne State University, said the trial has gone “swimmingly” for the city so far.

The city of Detroit wrapped up its case in bankruptcy court today, with Detroit’s two top elected officials as the final witnesses.

Mayor Mike Duggan and City Council President Brenda Jones both took the stand.

Their testimony is key, because the city needs to convince Judge Steven Rhodes that its proposed plan of adjustment is feasible—and that city leaders will work together to execute it post-bankruptcy.

Jones had publicly opposed emergency manager Kevyn Orr, and his decision to file for bankruptcy.

Sam Beebe

Detroit emergency manager Kevyn Orr will continue testifying today in Detroit’s bankruptcy trial.

Orr, a bankruptcy lawyer, took the stand for the first time Wednesday afternoon. He’s the main architect of Detroit’s bankruptcy restructuring plan, formally known as a plan of adjustment.

That plan is ultimately what’s on trial; Judge Steven Rhodes needs to approve it for the city to emerge from bankruptcy.

But while Orr is a crucial witness for the city, there was nothing particularly new or noteworthy about his initial testimony.

I once knew an opinion pollster who told me he could usually determine how anyone was going to vote without ever asking who they were going to vote for.

He did this by asking a series of litmus-test type questions about someone’s life, background and beliefs.

If you were a single mom with limited income, for example, that probably indicated you were a Democrat – unless you were a fundamentalist Christian. White professional male with a six-figure income?  Likely Republican if in business, for example. But probably not if he is a nonreligious professor.

Detroit Emergency Manager Kevyn Orr speaking at the University of Michigan.
U of M

After voters rejected the state's old emergency manager law in November 2012, Michigan lawmakers quickly came up with a replacement.

State-appointed emergency managers could still take control over local governments and school boards, but under the new law, they could do so for a limited amount of time. 

The new law, Public Act 436, allows for local governments to end a state-appointed emergency manager's term after 18 months. From the law:

If the emergency manager has served for at least 18 months after his or her appointment under this act, the emergency manager may, by resolution, be removed by a 2/3 vote of the governing body of the local government. If the local government has a strong mayor, the resolution requires strong mayor approval before the emergency manager may be removed. 

Orr started work as Detroit's emergency manager on March 28, 2013, so his 18 months is up in the next few days.

Almost everyone thought Detroit City Council and Mayor Duggan would vote to end Orr's appointment, but with Detroit's bankruptcy process wrapping up in court, the talk has changed.

Many years ago, I met Thomas Friedman, the distinguished New York Times journalist who won two Pulitzer Prizes for his coverage of the Middle East by the time he was 35.

When I told him that I regarded his reporting as indispensable, he told me something I’ll never forget. He said “don’t read my stories every day.”  That startled me, and I asked what he meant.

He went on: “Daily journalists covering a beat have to produce a story just about every day.” That’s partly because everybody doesn’t always read everything. But if you look closely, you’ll see that much of the time, much of the daily stories are repetitious.

Bank of the Oise at Auvers by Van Gogh, owned by the DIA
user: Maia C / Flickr

 

As the Detroit bankruptcy trial moves into its third week, the spotlight has often been trained on the Detroit Institute of Arts.

The discussion over whether the DIA can and should be forced to sell its treasures to help offset Detroit's insolvency has been one of the most hotly debated issues of the bankruptcy.

DIA director Graham Beal recently wrote a letter that was published in the museum's newsletter and then posted on Deadline Detroit under the headline "Museums Should Step Very Carefully 'In Times Of Crisis.'"

Here's an excerpt of the letter:

In the Great Depression, the DIA remained open and staffed, largely thanks to the secret support of Edsel Ford. The city of Detroit arts commissioners could have sold the van Gogh self-portrait, Matisse's The Window, Ruisdael's Jewish Cemetery, or even Breugel's Wedding Dance, but the thought never seems to have crossed anyone's mind.

user memories_by_mike / Flickr

The pieces are falling into place for Detroit to eventually emerge from bankruptcy with a lot less of its budget-servicing debt. But the city of Detroit’s budget could still be a house of cards. Many of its revenue sources are not stable.

Bankruptcy does not mean Detroit escapes all of its money problems.

It’s heavily dependent on a city income tax. If another economic dip is around the corner, that source of revenue would shrink.

Casino taxes are stagnant.

Detroit's riverfront.
Ian Freimuth / Flickr

Judge Steven Rhodes has suspended Detroit's bankruptcy trial until Monday so the city can work out details of a deal with one of its major creditors.

News of the potential deal broke last night. Syncora, a bond insurer, stands to lose $400 million in Detroit's bankruptcy.

Alisa Priddle of the Detroit Free Press reports the deal the city is trying to work out with Syncora would be worth 26 cents on the dollar vs. 10 cents on the dollar under the city's current plan.

More from the Freep:

Among the goodies are $23.5 million in payment in the form of B-notes; a long-term lease on a centrally located parking garage; a 20-year extension of the lease to run the U.S. side of the Detroit-Windsor Tunnel to 2040; and $6.2 million in credits towards the purchase of some parcels of land in the future.

The pause in the trial also gives the city time to reach other settlements with other creditors. One of the biggest is Financial Guaranty Insurance Co.

FGIC insured a deal made under the Kwame Kilpatrick administration that shored up the city's pension liabilities.

Here's how that deal was described by the Freep last spring:

Under former Mayor Kwame Kilpatrick, Detroit sold the pension obligation certificates of participation to boost funding at the city’s General Retirement System and Police and Fire Retirement System to nearly 100%. The city also bought so-called swaps, or derivatives, to permanently lock in steady interest rates around 6% on the arrangement. But three years later, as the national economy tanked, interest rates plummeted, souring the deal.

Robert Snell and Christine Ferretti of the Detroit News spoke with one of Syncora's lawyers, Ryan Bennett.

Bennett said the deal before Syncora now relies on the city settling its issue with FGIC. 

Bennett said he’s not aware of any deals in the works between the city and FGIC. But the holdout creditor could benefit as well from the “shared asset pool” and that Syncora’s tentative agreement “sets a path” for FGIC, he said.

The Freep's Priddle reports that an FGIC lawyer said they need to "better understand the deal" and it will affect the witnesses he calls when the bankruptcy trial resumes next week.

*This post has been updated.

Detroit has hammered out a deal with its fiercest foe in bankruptcy court, possibly smoothing the way for the city to leave bankruptcy quickly.

Bond insurer Syncora Guarantee, Inc. had fought the city’s proposed plan of adjustment at every turn.

That restructuring plan would have forced the company to take hundreds of millions of dollars in losses.

user andrea44 / Flickr

This Week in Michigan Politics, Jack Lessenberry gives an overview of what's at stake in Detroit's bankruptcy trial.


Detroit’s bankruptcy has been with us so long that it is hard to believe that the actual trial is only starting today.

Technically, it is not a trial in the strict sense of the word, but something called a “plan confirmation hearing.”

But it is, in a very real sense, Detroit’s trial of the century. That’s an overused phrase, but totally appropriate here.

In fact, U.S. Bankruptcy Judge Steven Rhodes, the most important figure in all of this, said it all last week: What happens here will determine “the future of the city of Detroit.”

Actually, it might be technically correct to say that this trial will determine whether the city has a future.

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