Detroit bankruptcy

Business
11:16 am
Thu January 23, 2014

Leaders call for immigration reform to help save Detroit

Detroit Mayor Mike Duggan speaking in support of the immigration plan with Gov. Snyder looking on (left).
screen shot from LiveStream

Gov. Rick Snyder and Detroit leaders announced their immigration reform plan this morning at the Hispanic-owned Ideal Group in Detroit.

The plan calls for federal changes that would allow immigrants to live, work, and hopefully create jobs in the city of Detroit.

More from Gov. Snyder’s press release:

Detroit must harness the power of skilled immigrants to grow its economy, increase its tax base and reverse its population decline, Gov. Rick Snyder said today as he urged federal action on his proposal that increases employment-based visas for immigrants.

“We want the world to know that Detroit is open for business,” Snyder said. “Legal immigration helped to build this great city and is just as critical to its comeback. Immigrants create jobs and Detroit is a great value opportunity in terms of business costs and overall quality of life.

The plan calls for the federal government to secure 50,000 employment-based visas for skilled immigrants (employment-based second preference visas, or EB-2 visas).

The visas would require that the visa holders reside and work in the city of Detroit.

Gov. Snyder's office cited the following statistics in support of the plan:

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Opinion
9:35 am
Thu January 23, 2014

Odds are against Snyder's attempt to save Detroit pensions and art

Jack's essay for Thursday Jan. 23, 2014

There was a lot of rejoicing yesterday at the news that the governor had signed on to a so-called “grand bargain” to help save the collections of the Detroit Institute of Arts.

Detroit is, of course, going through bankruptcy.

Creditors want as much as possible of the money owed them. Those counting on city pensions want to make sure they get their money, even if the DIA’s world-class collections have to be sold.

Selling the art would be devastating not only to art lovers, but it might deal the city a cultural blow from which it could never recover.

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Detroit Bankruptcy
4:44 pm
Wed January 22, 2014

State leaders hope to join in on 'Grand Bargain' for Detroit pensions and the DIA

Gov. Snyder flanked by Bolger (right) and Richardville (left) making the announcement.
Gov. Snyder

Update 5:00 p.m. from Rick Pluta:

Governor Rick Snyder has proposed committing up to $350 million to help mitigate cuts to Detroit pension benefits – as well as keep assets of the Detroit Institute of Arts off the auction block.

The state’s offer would play out over 20 years and would match money raised from private donations to make sure DIA paintings, sculptures, and other works of art don’t get sold off to pay pension benefits that are central to the bankruptcy negotiations.

“This is not bailout,” he said. “This is a settlement. I want to be very clear about that.”

Snyder said one of the conditions would have to be creditors dropping any legal claims to DIA asserts.

“This is not geared toward the bondholders, bankers, or people on Wall Street,” he said. “This is geared towards Michiganders that worked really hard in our state and have a pension and are looking at a difficult situation – how do we improve that situation?” 

The governor says he hopes the state’s offer will help move the city through bankruptcy more quickly, which would be a good deal for the state.

The proposal must still be adopted by the Legislature. Republican leaders say hearings will begin very soon.

“We have some questions, some ‘t’s’ that need be crossed, some ‘i’s’ that need to be dotted, but in general is something that’s very positive and being received that way,” said state Senate Majority Leader Randy Richardville (R-Monroe). “So, we will consider it over the next few weeks. We will look in detail, and consider it as best we can.”

The governor’s offer came as Detroit bankruptcy judge Steven Rhodes refused to allow an evaluation of DIA assets to go ahead. Detroit’s creditors could still challenge the plan in bankruptcy court.

The state’s share would match contributions from private donors. It would come from money the state gets annually from the 1998 nationwide settlement between states and tobacco companies. The plan will be part of the governor’s budget proposal to be delivered Feb. 5.

Update 4:44 p.m.

Gov. Snyder and Sen. Majority Leader Randy Richardville (R-Monroe), and Speaker of the House Jase Bolger (R-Marshall) announced that they plan to support legislation aimed at saving Detroit pensions and DIA art.

From their press release:

Snyder, Senate Majority Leader Randy Richardville and House Speaker Jase Bolger announced they are working with the Michigan state legislature to allocate up to $350 million over the next 20 years to be combined with funds raised by private Michigan foundations to assist in saving retiree pensions. The governor recommends these state funds would come from tobacco settlement revenues...

“We are working on a fiscally sound mediation solution with clear conditions.  We will not participate in a bailout, nor allow these funds to go anywhere other than directly to retiree pensions,” said Snyder.  “This is an opportunity to work together to find solutions that will allow Detroit to get on a firm foundation faster, help pensioners, and ultimately save the Michigan taxpayers millions in the long run.  I want to applaud the foundations for taking this unprecedented and generous step and the mediators for facilitating these discussions.”

Snyder said there would be "strict conditions on any funds allocated towards the settlement." Money from the state, he said, must solely go toward pensions and that "independent fiduciaries manage the pension funds going forward."

Detroit's emergency manager released a statement after today's announcement saying in part:

"The level of proposed investment by the philanthropic community and the State will go far in helping reach a timely and positive resolution of the City's financial emergency.  A mutually agreed resolution to outstanding bankruptcy issues is the best way to help the City restore basic and public safety services to its 700,000 residents.  It is now time for the remaining parties to set aside the bargaining rhetoric and step forward and join this settlement to help this great city regain its footing and become once again an attractive place to live, work and invest."

MPRN will have more for us later.

11:43 a.m.

Many political deals have been dubbed a "grand bargain."

This "grand bargain" involves private money and potential state money to save Detroiters' pensions and the artwork at the Detroit Institute of Arts.

This morning federal mediators involved in the Detroit bankruptcy released a statement saying in part:

"We are advised that the governor of the State of Michigan, Rick Snyder, intends to announce soon his support for significant state participation in the plan to help protect the pensions of city of Detroit retirees, support the DIA, and revitalize the city in the aftermath of the bankruptcy. The governor  has indicated that he will engage with the Michigan Legislature to help secure this support for the plan."

Gov. Snyder is expected to hold a press conference at 3:30 announcing more details of the plan.

He'll be joined by Sen. Majority Leader Randy Richardville (R-Monroe), and Speaker of the House Jase Bolger (R-Marshall). It's a sign that these legislative leaders are supportive of the plan.

Chief bankruptcy mediator Judge Gerald Rosen struck a deal with private foundations that pledged more than $300 million to help Detroit solve the pension/art problem.

With that money pledged, state leaders took note and are deciding whether to try to match the money pledged by the foundations.

Earlier reports stated that the plan calls for sending Detroit $350 million over 20 years. 

We'll find out more details later today.

How Michigan legislators will react to this plan is anyone's guess. In their statement, federal mediators urged that "all parties approach the issue with an open mind."

Politics & Government
10:24 pm
Tue January 21, 2014

A crucial week in talks to decide fate of Detroit's water system

Credit Kate Boicourt / IAN

Intense negotiations regarding the future of Detroit’s Water and Sewerage Department continued behind closed doors in federal court Tuesday.

Detroit emergency manager Kevyn Orr is pushing hard for a deal that would largely transfer control of the water department to a regional water authority.

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Politics & Government
1:12 pm
Thu January 16, 2014

Gov. Snyder proposes $350 million in state aid for Detroit

Gov. Rick Snyder delivering a State of the State address.
gophouse.com

Foundations and individuals have stepped up to pledge big dollars to the struggling city of Detroit, and now Gov. Rick Synder is floating a plan to send Detroit $350 million over 20 years.

The Detroit Free Press named an anonymous source when reporting the plan this morning.

Michigan Senate Majority Leader Randy Richardville (R-Monroe) confirmed today that Snyder has floated the plan.

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Politics & Government
9:03 am
Wed January 15, 2014

The week in Michigan politics

A day after Governor Snyder delivers his "State of the State" address, he plans to go live on the web with an "online town hall." The event is scheduled for 6 p.m. Thursday. Details can be found on the Governor's Facebook page.
"Rick Snyder for Michigan" Facebook Page

This Week in Michigan Politics, Jack Lessenberry and Christina Shockley talk about Governor Rick Snyder's upcoming State of the State address, a new effort to save Detroit pensions and the Detroit Institute of Arts, and how abortion right advocates are backing off efforts to block a law that requires women to buy a separate health insurance rider to cover abortions.

Week in Michigan Politics interview for 1/15/14

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Opinion
10:47 am
Tue January 14, 2014

It's time for Snyder to fight for the DIA

Lessenberry commentary for 1/14/14

Ever since Detroit’s bankruptcy filing was announced last summer, there has been one major concern in the art world.

What will happen to the Detroit Institute of Arts and its world-class collection, something previously assumed to be untouchable and priceless? When emergency manager Kevyn Orr said the collection needed to be inventoried and appraised, it caused greater shock in some circles than the bankruptcy itself.

At first, I assumed this was a bluff, possibly designed to demonstrate how deep the city’s crisis really was.

But it quickly became clear that the creditors want their money by any means necessary. And for many, art takes a back seat to their stomachs. One former council member, a highly educated woman and a single parent, told me “I am tired of hearing that the pension I worked for is less important than your right to drive down here and see a Van Gogh.”

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Arts & Culture
7:48 am
Tue January 14, 2014

DIA supporters seek $170 million more to save Detroit's art and pensions

The Detroit Institute of Arts wants to strike a "grand bargain" to save itself.
DIA

This next story is a call to anybody with $170 million to spare.

And a major fondness for art.

By now, you’ve heard about the group of philanthropists who’ve raised $330 million to strike a “grand bargain” with Detroit’s creditors.

Their goal is to raise half a billion dollars to save city-owned art at the Detroit Institute of Arts from being sold off in the city’s bankruptcy.

But that grand bargain may still require a small miracle.

Fair or not, bankruptcy pitting art against pensioners

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Politics & Government
7:34 am
Mon January 13, 2014

In this morning's headlines: Power in Flint City Council, Detroit swap deal, MEAP tests

User: Brother O'Mara flickr

Flint City Council could gain power back today

The Flint city council has been largely powerless in the two years since the appointment of an emergency manager. But that begins to change this evening. Emergency manager Darnell Earley says the City Council will now be asked to get more involved in city decisions.

Detroit swap deal to resume today

"A bankruptcy court hearing on Detroit's renegotiated deal to pay off two banks in an interest rate swaps deal is scheduled to resume today," The Associated Press reports.

Lawmakers to discuss which standardized test students will take this year

"State lawmakers will begin hearings this week to determine which standardized test Michigan students will take starting next spring. State education officials say the Smarter Balanced Assessment is the only good option to replace the Michigan Educational Assessment Program – or MEAP," Jake Neher reports.

Politics & Government
5:00 am
Tue January 7, 2014

Detroit emergency manager "freezes" pension benefits, then backs off -- temporarily

Detroit emergency manager Kevyn Orr moved to “freeze” pension benefits for some city retirees — then suspended that action as the city and pension fund representatives talk in mediation.

Orr quietly issued that order late last month. It affects members of Detroit’s General Retirement System—not police officers or firefighters, who have their own, separate pension fund.

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Politics & Government
6:00 am
Fri December 20, 2013

Duggan, Orr reach power-sharing agreement in Detroit

Detroit mayor-elect Mike Duggan will have broad powers to run the city’s day-to-day business.

Duggan and emergency manager Kevyn Orr have reached a power-sharing agreement that gives Duggan control over most city functions.

While Duggan will have substantial operational powers, he’s also promised not to “interfere” with any of Orr’s financial control.

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Law
2:56 pm
Mon December 16, 2013

Judge rules that his Detroit bankruptcy finding can be directly appealed

John Meiu Detroit Legal News Publishing LLC

The judge in Detroit’s bankruptcy case says creditors can appeal his recent eligibility ruling directly to a higher federal court.

Judge Steven Rhodes ruled earlier this month that Detroit is eligible to proceed with its historic bankruptcy case.

He also ruled that city pensions can be cut in federal bankruptcy court — despite a public pension guarantee in Michigan’s state constitution.

City unions, pension funds and retiree groups immediately said they intended to appeal both decisions.

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Politics & Government
9:30 am
Mon December 16, 2013

Appeal on the docket today in Detroit bankruptcy case

user: jodelli Flickr

DETROIT (AP) — Unions and Detroit pension funds are back in court to try to persuade a judge to allow them to appeal a decision that lets the city fix itself in bankruptcy.

They want Judge Steven Rhodes to put the Dec. 3 decision on a fast track to a federal appeals court in Cincinnati. A hearing is set for today.

Lawyers for emergency manager Kevyn Orr say it's more appropriate to file an appeal when the case is over. Unions, retirees and pension funds say Rhodes was wrong to find Detroit eligible for Chapter 9 bankruptcy protection.

They're especially disappointed that the judge will allow pension cuts. Detroit says pension plans are underfunded by $3.5 billion.

Orr hopes to file an $18 billion reorganization plan by January.

Politics & Government
1:08 pm
Fri December 13, 2013

Obama administration touts Detroit jobs efforts

Two Obama administration officials were in Detroit this week to highlight White House efforts to help Detroit.

Labor Secretary Thomas Perez and Education Secretary Arne Duncan visited Macomb Community College.

That school is one of eight Michigan community colleges sharing a $25 million grant to “create and expand innovative partnerships between community colleges and businesses” to train more workers for in-demand jobs.

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Politics & Government
7:16 am
Thu December 12, 2013

In this morning's headlines: The final bills of the year, DIA involved in bankruptcy talks

User: Brother O'Mara flickr

Anti-abortion coverage bill approved

"The Michigan Legislature has approved a petition initiative that will require people to buy a separate health insurance policy for abortion coverage. The measure cannot be vetoed by Governor Rick Snyder. But it could be challenged via another petition drive," Rick Pluta reports.

What bills could move through on the last day of session

"Big legislation that could win final approval today would expand a state reform school district to failing schools beyond Detroit and ease the potential discontinuation of traditional land line service. Legislators also plan to update campaign laws heading into an election year by doubling donation limits and keeping intact rules for political ads over objections from the secretary of state," the Associated Press reports.

DIA now involved in bankruptcy talks

"The Detroit Institute of Arts has been allowed into talks on how to protect pieces in its collection during Detroit's bankruptcy. Museum officials say they're mobilizing public support to help implement a fundraising strategy that will meet the city's needs and ensure the well-being of the museum," the Associated Press reports.

Politics & Government
6:38 pm
Wed December 11, 2013

In his farewell speech Bing says, 'I will remain involved in Detroit's transformation'

Dave Bing

Detroit Mayor Dave Bing says he’s pleased with how his administration has “moved the needle forward on Detroit’s future.”

Bing talked about his accomplishments and challenges as mayor in a farewell speech to the Detroit Economic Club Wednesday.

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Politics & Government
8:44 pm
Fri December 6, 2013

Bankruptcy judge gives go-ahead for Detroit lighting plan

DETROIT (AP) - A federal judge has cleared the way for Detroit's Public Lighting Authority to immediately sell $60 million in bonds to begin fixing thousands of broken streetlights.

Judge Steven Rhodes issued his order Friday - three days after he allowed Detroit to become the largest U.S. city to enter bankruptcy.

Total financing for the lighting plan is expected to reach $210 million.

Rhodes' ruling also means $12.5 million in annual utility taxes approved by the state Legislature to back the bond sale will not be affected by the bankruptcy.

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Stateside
4:49 pm
Thu December 5, 2013

Detroit is not the only city in Michigan facing enormous budget challenges

The financial woes Detroit is facing aren't isolated.
Steve Carmody Michigan Radio

All eyes are on Detroit this week, following Tuesday’s historic ruling on Detroit’s eligibility for bankruptcy. For those living outside the city, it's easy to separate themselves from Detroit's problems. 

But many experts say Detroit is not alone.

Detroit is not Michigan's only city that faces enormous budget challenges. Unfunded liabilities and retiree debt are adding up all across our state.

Ted Roelofs, a contributing writer to Bridge Magazine, recently wrote a piece that argues that other cities in Michigan will not be immune to rising legacy costs that, in part, did Detroit in.

Roelofs and John Pottow, a bankruptcy expert at the University of Michigan, talk with us about the future of other Michigan cities in the wake of Detroit’s bankruptcy.

Listen to the full interview above.

Stateside
4:47 pm
Thu December 5, 2013

Will the DIA survive Detroit's bankruptcy? A Detroit News columnist shares his thoughts

The Detroit Institute of Arts.
Flickr

What’s going to happen with the Detroit Institute of Arts?

 

That’s the question on the minds of many Michiganders after the city of Detroit was deemed eligible for Chapter 9 bankruptcy on Tuesday.

Daniel Howes, a business columnist with The Detroit News, talks with us about all things DIA – a recent appraisal of the institute’s collection, emergency manager Kevyn Orr’s interest in the museum, and a possible rescue plan cooked up by a federal judge.

Listen to full interview above. 

Arts & Culture
5:26 pm
Wed December 4, 2013

Detroit music legend Derrick May says bankruptcy is just a new angle to an old story

May at the 'Free Your Mind' festival in 2009.
Rene Passet Flickr

There was another plot turn in the long story of Detroit's struggles yesterday.

A federal bankruptcy judge looked at all the evidence and declared, yep, the city of Detroit is indeed insolvent.

It's new, for sure, but for many who have lived and worked in Detroit, it's just more of the same.

Derrick May is one the founding fathers of techno music. Detroit was the birthplace of the genre, and May has achieved a lot of success traveling around the world playing shows. (Listen to his breakout hit here.)

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