Detroit bankruptcy

Newsmaker Interview
4:50 pm
Tue March 4, 2014

Could foundations offering to help Detroit regret their decision?

William Schambra is the director of the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal.

  As Detroit continues to move through the bankruptcy process, an outstanding issue is a plan to protect artwork at the Detroit Institute of Arts. A group of foundations and private donors have pledged over $300 million that would help cover city pensions and offset the need to sell the artwork. 

A recent op-ed in the Chronicle of Philanthropy questions the wisdom of this plan. William Schambra is the director of the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal in Washington D.C. and he joined us today.

Listen to the interview with William Schambra.

Politics & Government
9:32 pm
Mon March 3, 2014

Detroit's "plan of adjustment" on fast track as creditors line up to object

People who oppose Detroit’s plan to reorganize in bankruptcy have until the start of next month to file objections.

One group of about 20 residents, retirees and activists picked up the paperwork to do just that at federal offices in downtown Detroit Monday.

Reverend Charles Williams II and representatives from the National Action Network led the group of people looking to file individual objections to the city’s plan of adjustment.

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Stateside
4:56 pm
Thu February 27, 2014

Daniel Howes on the current state of Detroit's bankruptcy

Peter Martorano Flickr

As Mayor Duggan does the heavy lifting to get Detroit actually up on its physical "feet," the other part of its rehab is, of course, the historic bankruptcy.

So many pieces, so many players.

Detroit News Business Columnist Daniel Howes has been keeping a close eye on all of it, and he joined us today for our weekly check-in.

Listen to the full interview above.

Politics & Culture
4:55 pm
Thu February 27, 2014

Stateside for Thursday, Feb. 27, 2014

You’ve heard it before, folks, time and time again. In today's economy, the more education one attains after high school, the better, right? But what if some students might be better served in other settings, academic or otherwise? Is it time for Michigan to develop some credible alternatives for high school grads? We’ll find out more on today’s show.

Then, we spoke to Daniel Howes about his reporting on Detroit's historic bankruptcy. 

And, Fifth Third Ballpark wants to expand its concessions menu. We took a look at some of the food options fans can vote for, including deep-fried lasagna and a bacon-and-chocolate taco.

Also, how can we keep young entrepreneurs fresh out of college in Michigan? The Michigan Collegiate Innovation Prize awards them for launching their start-ups in state.

And, a new fee system for hunting and fishing goes into effect soon, and it’s the first significant raise in over 15 years. We spoke with Ed Golder of the Michigan Department of Natural Resources about what’s behind this increase.

First on the show, Detroit Mayor Michael Duggan delivered his first State of the City speech last night before a packed, invitation-only crowd. And his message was clear: We are going to change what it means to live in Detroit.

Even among those who have a "wait-and-see" attitude, the mayor's speech is being praised for what many believe is a refreshing attention to detail and the sense that a team is at work.

Detroit Free Press columnist Nancy Kaffer joined us today.

Stateside
4:25 pm
Tue February 25, 2014

Detroit bankruptcy reorganization plan in place; what's the next move for stakeholders?

Lester Graham Michigan Radio

It's been five days since emergency manager Kevyn Orr released the bankruptcy reorganization blueprint, which maps out a way to wipe out billions in debt, spend over half a billion in tearing down abandoned buildings and invest one billion to improve city services.

Now that all stakeholders have had a chance to digest the blueprint, the battle lines are being drawn.

Detroit Free Press columnist Rochelle Riley joined us today to give us a look ahead.

Listen to the full interview above.

Politics & Culture
4:19 pm
Tue February 25, 2014

Stateside for Tuesday, Feb. 25, 2014

We've almost all done it – you might have even done it just today: Made a purchase online.

But have you ever wondered why you have to pay sales tax on online purchases from some retailers like Target, but not others, like Amazon? There's new legislation in Lansing that might change that. We found out more on today's show.

Then, close your eyes. Now, picture a farmer. What comes to mind? You probably pictured a man, but more women are raising crops now in Michigan. We took a look at what's behind the rise in female farmers.

And, it was the most infamous event of one of the most painful and divisive times in Michigan's history. A new play at the Charles H. Wright Museum of African American History explores the Algiers incident which occurred during the Detroit riots. 

First on the show, it's been five days since emergency manager Kevyn Orr released the bankruptcy reorganization blueprint, which maps out a way to wipe out billions in debt, spend over half a billion in tearing down abandoned buildings and invest $1 billion to improve city services.

Now that all stakeholders have had a chance to digest the blueprint, the battle lines are being drawn.

Detroit Free Press columnist Rochelle Riley joined us today to give us a look ahead.

Detroit bankruptcy
11:46 am
Tue February 25, 2014

LIVE CHAT: Tom Sugrue takes your questions about the future of Detroit

Tom Sugrue
Department of History University of Pennsylvania

Tom Sugrue wrote the book "The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit."

Sugrue is a Detroit native and a professor of history and sociology at the University of Pennsylvania. He will be one of the keynote speakers at this Thursday's Detroit Policy Conference.

Detroit Free Press business writer John Gallagher, an author of a few books on Detroit himself, is hosting an online chat with Sugrue at noon today.

Sugrue recently told Gallagher that he leans "toward the pessimistic side" on the continuum of views about the future of Detroit.

Jump in the conversation below. They'll start at noon today.

Opinion
10:39 am
Mon February 24, 2014

Pension cuts in Detroit's bankruptcy plan would be devastating and unfair

Well, the shoe finally dropped last Friday, or maybe it was a hammer. At any rate, we now know the details of Detroit’s proposed bankruptcy “plan of adjustment,” and they include pension cuts. Pretty massive pension cuts. Most pensioners would see their monthly checks cut by 34%. Police and fire retirees, whose pension fund is in better shape, lose 10%.

For many, this would be devastating. Devastating, and unfair.

There’s no doubt that Detroit’s pension funds were poorly managed. There’s also no doubt that the city was too liberal in its pension policy.

There are some folks who spent 30 years in a low-stress clerical job, and then were able to retire, move to Florida and collect a pension for life starting at age 52. That policy doesn’t make any sense even if the city of Detroit could afford it, and it never could.

My guess is that in the future, there won’t be any pensions for new city workers, just a defined contribution savings plan.

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Politics & Government
7:18 am
Mon February 24, 2014

In this morning's headlines: Gay marriage, meth bills, Detroit pensions

Morning News Roundup, Thursday, Oct. 13, 2011
User: Brother O'Mara Flickr

Same sex marriage trial

Michigan’s ban on same-sex marriage goes on trial this week in Detroit. The case involves a lesbian couple who want to get married so they can jointly adopt the special needs children they’re raising together.

Bills to crack down on meth move forward

"Legislation to stop the sale of ephedrine or pseudoephedrine to people convicted of methamphetamine-related crimes is moving ahead in Lansing. The state Senate last week overwhelmingly approved bills to alert Michigan stores not to sell cold medicine containing the popular ingredients for meth production to criminals convicted of meth offenses," the Associated Press reports.

Bankruptcy plan gives safety net for pensioners

"[Detroit's] bankruptcy plan calls for cutting pensions for general city retirees by up to 30 percent. But this fund would give some of that money back to pensioners who fall close to the federal poverty line," Sarah Hulett reports.

Investigative
7:00 am
Mon February 24, 2014

Detroit's infrastructure crumbling while city has trouble collecting cash

Compuware World Headquarters at Campus Martius is a gleaming example of the Detroit's downtown revival. It depends on the deteriorating infrastructure of the city.
Credit Lester Graham / Michigan Radio

The radio version of this story.

The plan to guide Detroit out of bankruptcy includes up to $150 million a year for ten years to repair neglected infrastructure.  The city could go a long way in paying for that if it can find a way to collect money already owed to it.

The Compuware World Headquarters building at Campus Martius is a gleaming example of a downtown revival.

But last week, just down the block, the façade of revival was peeled back for a moment. An old water pipe broke.

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Politics & Government
12:17 pm
Fri February 21, 2014

Detroit pensioners, unions can appeal bankruptcy

Detroit's skyline.
Lester Graham Michigan Radio

The U.S. Sixth Circuit Court of Appeals will allow appeals to Detroit’s bankruptcy eligibility ruling, The Detroit Free Press reported.

Detroit’s largest union – AFSCME Council 25 – and the city’s two pension funds – Detroit Police and Fire Retirement System and the General Retirement System – are among the creditors who filed an appeal to Judge Steven Rhodes’ December ruling that Detroit is eligible for bankruptcy.

According to the Freep’s Nathan Bomey and Matt Helms, Detroit’s bankruptcy case would continue as the appeal case works through the courts.

The central argument for the union and pension funds is that the city did not negotiate “in good faith” prior to filing for bankruptcy, meaning the city and state "rushed" to bankruptcy court.

Rhodes, in his ruling to approve Detroit's bankruptcy, determined that good faith negotiations were not possible under the circumstances.

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Breaking
11:34 am
Fri February 21, 2014

Detroit leaders submit bankruptcy restructuring plan to court

From the first page of the plan of adjustment filed in court today.

The city's blueprint for how to shed billions of dollars in debt while providing basic city services to residents was filed in federal bankruptcy court today.

Your can read it here.

The plan spells out how the city plans to repay the more than 100,000 creditors – those receiving city pensions, retirees, banks, bond insurers and other creditors – can look through the plan to see how they will fare.

The bankruptcy court will now go over the plan and will likely make adjustments.

Among other things, the plan proposes what’s called a "cram down" that will force city bondholders to take big losses.

It also lays out proposed formulas to "modify" – meaning cut – city pensions.

The level of cuts will depend on a number of factors, but the plan assumes a $350 million state contribution to supplement private funds. Officials say the cuts shouldn't go beyond about 30%.

The plan also proposes transferring assets from the Detroit Institute of Arts to a private entity to avoid a possible art sale.

Again, that depends on state and private funds coming through.

Gov. Rick Snyder issued the following statement regarding the plan:

"Detroit’s comeback is underway. Emergency manager Kevyn Orr has submitted a thoughtful, comprehensive blueprint directing the city back to solid financial ground, a crucial step toward a fully revitalized Detroit.  There will be difficult decisions and challenges for all sides as this process moves forward.

The state’s focus is on protecting and minimizing the impact on retirees, especially those on fixed, limited incomes, restoring and improving essential services for all 700,000 Detroit residents and building a foundation for the city’s long-term financial stability and economic growth.

This plan of adjustment is a critical step forward as we look to resolve problems decades in the making.

Let’s use this plan as a call to action for a voluntary settlement as part of the mediation process to resolve the bankruptcy more quickly and soften the tough but necessary changes. We already have witnessed some strong collaboration around innovative ideas. We hope there can be more and that these efforts come to fruition.

Detroit’s long-term viability is not just essential for its residents -- but to all Michiganders."

We'll have more as the story develops today.

*This post is being updated.

Politics & Government
1:13 pm
Thu February 20, 2014

Plan to restructure Detroit's debt expected tomorrow

Lester Graham Michigan Radio

DETROIT – The office of Detroit's state-appointed emergency manager Kevyn Orr says the blueprint for the city's restructuring through and after bankruptcy is expected to be filed Friday in federal court.

Bankruptcy Judge Steven Rhodes had set a March 1 deadline for the long-awaited plan of adjustment. The plan will spell out how individual creditors will be treated as Orr reduces the city's $18 billion debt.

Spokesman Bill Nowling says Orr's office plans to file the plan with the court Friday.

A draft given last month to creditors showed retirees and pensioners getting $4.3 billion in payments and bondholders about $1.1 billion over the next 40 years, leaving the city with a nearly $336 million surplus.

Orr had hoped to have the plan ready before January but was delayed by ongoing negotiations.

Economy
3:09 pm
Wed February 19, 2014

Look at this interactive map for insight into one of Detroit's biggest problems

You can see how Detroit developed over time with this map. The pink parcels are the oldest, the blue a little newer, and the green are the newest.
screengrab of Loveland Technologies' WDWOT map.

The blighted buildings in Detroit have been a major stumbling block for decades.

How do you start revitalizing a city when so much of it is crumbling?

Current estimates put the number of abandoned buildings at somewhere between 78,000 and 90,000, but that's a guess. Nobody really knows the true number.

Read more
Politics & Government
8:28 am
Wed February 19, 2014

Lessenberry talks potholes, minimum wage, Detroit bankuptcy and same-sex marriage

Matthileo Flickr

This Week in Michigan Politics, Christina Shockley and Jack Lessenberry discuss money to help fix potholes, an effort to raise the minimum wage, the possible release of Detroit’s bankruptcy plan, and the upcoming trial challenging gay marriage in Michigan.

Week in Michigan Politics interview for 2/19/14

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Politics & Government
1:36 pm
Tue February 18, 2014

Fate of Detroit's water department a big question mark in city's plan to shed debts

Credit Kate Boicourt / IAN

What does the future hold for Detroit’s water and sewerage department?

We should have a better idea later this week, when the city’s emergency manager, Kevyn Orr, submits a landmark plan in bankruptcy court this week.

Orr must submit a plan of adjustment for how to deal with Detroit’s estimated $18 billion in long-term debt, and one major sticking point has been what to do with the water department.

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Investigative
6:00 am
Mon February 17, 2014

Detroit Emergency Manager to file plan with bankruptcy court this week

Detroit skyline.
Credit Lester Graham / Michigan Radio

This week the City of Detroit’s Emergency Manager is to file a disclosure statement with the federal court overseeing the city’s bankruptcy ahead of the March 1 deadline.

The plan of adjustment restructuring Detroit’s debt includes a ten year blueprint for the city as part of the 2012 consent agreement with the State of Michigan. The restructuring consultant Conway MacKenzie has been working on that ten year plan.

Bill Nowling is the spokesperson for Emergency Manager Kevyn Orr. He says that blueprint will be part of the filing this week.

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Politics & Government
8:31 am
Wed February 12, 2014

Lessenberry talks education funding, ballot proposals, Detroit bankrupty and Detroit Public Schools

Matthileo Flickr

This Week in Michigan Politics Christina Shockley and Jack Lessenberry discuss the top political headlines of the week. This week's topic include:

  • Proposals to boost school funding.
  • Drama over Michigan's restrictions on how ballot campaigns can collect signatures.
  • How a bankruptcy plan for Detroit might come as early as next week.
  • How Detroit Public Schools have lost a collective 160 days from power outages.

Listen to the full interview below

Politics & Government
12:15 pm
Tue February 11, 2014

Administration official says bailout of Detroit was not politically possible

Detroit
Lester Graham Michigan Radio

Gene Sperling, the outgoing director of the White House National Economic Council, told this to reporters today, according to David Shepardson of The Detroit News:

“We did not feel we had any available financial tools, and secondly, we did not think that the prospect of legislation was even close to viable," Sperling told reporters at a breakfast hosted by the Christian Science Monitor. "To have floated (a bailout) would have given false hope and taken people's eye off the important task ahead so what we tried to do was make clear that the federal government – we did not have tools at our disposal that could be helpful to Detroit."

So a federal bailout isn't politically feasible; is state help any more palatable?

Gov. Snyder floated an idea after private individuals and foundations offered to step in, but with a state Legislature unwilling to raise funds to fix the state's aging roads, money to help Detroit is a long shot.

Newsmaker Interview
5:32 pm
Tue February 4, 2014

Detroit bankruptcy moving quickly

Peter Martorano Flickr

This week, Stephen Henderson, editorial page editor for the Detroit Free Press, pointed out the positive momentum around the Detroit bankruptcy, and also the glaring outstanding issues that could have a major impact on how quickly and efficiently the bankruptcy proceeds.

All Things Considered host Jennifer White spoke with Stephen Henderson.

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