Detroit Journalism Cooperative

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.

Lester Graham / Michigan Radio

About 2,500 people showed up to apply for new city of Detroit jobs during a two-day job fair at Cobo Hall on Friday and Saturday.

On average, more than seven people applied for each job available.

Michael Hall is Detroit’s Director of Human Resources and Labor Relations.

“You know, we had 350 jobs that we listed. Anything from a GED to a CPA we’re looking for. So, we’ve had great candidates come through and some of those people will be called back for future interviews,” Hall said.

Lester Graham / Michigan Radio

On Thursday, the Detroit Regional Chamber held a one-day policy conference focused on Detroit after bankruptcy. The theme seemed to be optimism tempered by realism.

With Detroit’s bankruptcy on an apparent fast-track, a new mayor and city council, and progress in several key areas, there was an air of optimism.

But the Detroit Chamber’s policy conference looked also looked at obstacles.

Thomas Sugrue is a Detroit native and professor of History and Sociology at the University of Pennsylvania. He was a keynote speaker.

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.

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.

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.

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.

Lester Graham / Michigan Radio

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.

Quality of life in Detroit wavers across community lines

Feb 21, 2014
Kimberly P. Mitchell / Detroit Free Press

Crime, education, unemployment, services – all have a direct bearing on urban life, and all are measurable in data, and trackable over time.

But what can be lumped into a category one might call “livability?” The factors that make a city appealing to ordinary residents, workers, families, young people and fun seekers aren’t so easy to quantify. As is typical in this city of extremes, residents enjoy rich bounties and suffer appalling deficits.

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.

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.

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.

Capitol Building, Lansing, MI
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.

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.

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.

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.

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.

Detroit Emergency Manager Kevyn Orr has submitted a so-called “plan of adjustment” to Detroit creditors.

It’s been about six months since Orr filed for Chapter 9 bankruptcy for the city.

So, more than half a year later, what do local leaders in Michigan think about the bankruptcy?

Tom Ivako joined us today. He’s with the Center for Local, State and Urban Policy at the University of Michigan.

*Listen to the audio above.

Lester Graham / Michigan Radio

Detroit's unemployment is high, really high. It's nearly 18%. That’s almost double the Michigan rate of unemployment and Michigan is among the worst in the nation.

So, when a manufacturer hires hundreds of Detroit residents, it gets attention.

The long road ahead for Detroit education reform

Feb 3, 2014
Brian Widdis

Benchmark: Schools

Ana Rosa Cabrera joined several moms in a classroom at Bennett Elementary for a Zumba session one morning earlier this month. The moms stretched and danced as their instructor, a Spanish-speaking ball of energy dressed in fluorescent greens, directed them in merengue-like maneuvers from a DVD playing on a TV screen.

Keeping an eye on where Detroit is headed

Jan 30, 2014
Jarrad Henderson / Detroit Free Press

Benchmark Detroit: Charting Detroit’s path from rock bottom

Detroit is a city of superlatives and, these days, they’re not good ones: Most dangerous. Lowest incomes. Highest poverty. Biggest exodus. Worst schools. And last year it became the largest U.S. city to go bust. Ever.

So last March, with the city facing crushing debt, Gov. Rick Snyder appointed emergency manager Kevyn Orr and soon sought bankruptcy protection. Now, there are almost daily reports of impending plans to cut benefits, strike deals with banks and provide millions of dollars to fix the city.

Regardless of which moves are made, they will require pain. It will be felt acutely and most publicly by those closest to a city pay stub or pension check.

Lester Graham / Michigan Radio

To successfully emerge from bankruptcy, Detroit has to find ways to cut spending and increase revenue. But that’s not going to be easy when so many Detroit residents are struggling just to get by.

No matter how well bankruptcy goes for Detroit, the city is going nowhere if most of its residents are broke and without jobs.

No jobs mean no income taxes for the city.

Detroit skyline.
user JSFauxtaugraphy / Flickr

What important questions are we, in the media, not asking about Detroit?

 What impacts of the Detroit bankruptcy have flown under the radar? What about questions about life post-bankruptcy – like just how can Detroit rebuild its neighborhoods and create more high-paying jobs? And what does all of that mean for Michigan as a whole? Well, Michigan Radio is partnering with other media organizations in the state to try and find the answers to those questions. And so welcome to the new "Detroit Journalism Cooperative." Lester Graham will be digging into the coverage for Michigan Radio and he joined us today.

* "This is not a bailout"

Gov. Rick Snyder used the phrase “this is not a bailout” five times in the 26 minutes he used to announce the first details of a “grand bargain” to settle the Detroit bankruptcy and the fight over pension benefits.

The governor’s plan would commit as much as $350 million over 20 years to help dig Detroit out of bankruptcy and keep the assets of the Detroit Institute of Arts off the auction block.

The money would most likely come from what Michigan is getting from the national tobacco settlement, that 15-year-old cash cow that’s been tapped for college scholarships, economic development, Medicaid – the list goes on. And now it might be part of the Detroit bailout (but don’t call it a “bailout").

So, there’s this plan and a revenue stream to go along with it. Now, the governor just has to sell it to the Legislature.The Michigan Constitution requires every dollar that goes to the state to go through the Legislature’s appropriations process.

And we wouldn’t exactly call this a done deal or an easy sell. After all, this is an election year. And Republicans, especially those west of Lansing and north of Clare, have little reason to go along with a political hot potato like aid for Detroit. At least two Senate Republicans, probably more, are looking at primaries. Plenty of House Republicans are also looking over their shoulders for a Tea Party primary challenge. Politically speaking, there are probably more reasons not to do this than to do this.

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:

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.

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."

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.

Gov. Rick Snyder.

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.

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.”