From Lansing

  • Watch Live: Understanding Detroit’s bankruptcy

    If you can’t make it to the Wayne State University Law School event today, “Detroit’s Bankruptcy and Beyond: Organizing for Change in Distressed Cities,” find the live stream here.

    The remaining schedule is:

    10:30 a.m. to noon: Panel discussion “Detroit: Historical Roots & Current Effects on Bankruptcy”

    Noon to 1:30 p.m.: Keynote Address by Angela Glover Blackwell, founder and president of PolicyLink.

    1:30 to 3:15 p.m.: Panel discussion “Distressed Cities: A National Perspective”

    3:15 to 4 p.m.: Keynote Address by Ronald Sims, senior professor of business administration at The College of William & Mary

    4 to 5:30 p.m.: Panel discussion “Working Within and Through Municipal Distress”


  • Mackinac and Municipal Bankruptcy: Orr and Snyder to speak at island conference

    Detroit Mayor Mike Duggan, Michigan Gov. Rick Snyder and Detroit Emergency Manager Kevyn Orr will be featured speakers at the Detroit Regional Chamber’s Mackinac Policy Conference later this spring.

    Here’s what the chamber said in announcing the lineup:

    With Detroit’s emergence from bankruptcy critically important to Michigan’s future, Orr will discuss the progress since his appointment in March 2013 and what is needed to position the city for success moving forward. Before his expected departure this fall, Orr will give insight into the short and long-term vision for Detroit’s sustained growth, as well as the blueprint it provides for municipalities around the nation facing similar challenges.

    Other speakers in the scheduled May 27-30 event include:

    Jim Clifton, chairman and CEO, Gallup Inc.; author, “The Coming Jobs War;”  Malcolm Gladwell, author, “David and Goliath;” and Joel Klein, CEO, Educational Division, News Corporation; former chancellor, New York City Department of Education.


  • Subpoenas for DIA records, art appraisals, MI Attorney General papers and more

    Bond insurer Syncora is seeking a massive amount of information from the Detroit Institute of Arts, Christie’s and the Michigan Attorney General as part of the Detroit bankruptcy case. The request includes the DIA’s membership information, documentation of how art was acquired, financial performance reports and tax records, appraisals, communications with the city about selling artwork and more. (The entire request is visible below.)

    Next Chapter Detroit’s Sandra Svoboda discussed the subpoena with WDET’s Craig Fahle on his show today.

    The company filed copies of the subpoenas in bankruptcy court that were to be served on the museum, the auction house, which appraised part of the collection, and the state’s top lawyer, who wrote an order last year stating the DIA’s collection was held in “charitable trust for the people of Michigan, and no piece in the collection may thus be sold, conveyed, or transferred to satisfy City debts or obligations.”

    Spokespersons for all three entities declined comment to An attorney for Syncora did not return an email message. Syncora, according to the city, insures and partially holds about $620 million of the city’s $18 billion debt.

    The Detroit Free Press reports that legal experts say the subpoena “is unlikely to make much headway in court.”

    3.28.14 Subpoena Filing



    -By WDET’s Sandra Svoboda

    @WDETSandra and

  • The State’s $350 Million: “Why I will vote against it”

    “Detroit already receives special treatment from Lansing,” writes state Rep. Greg McMaster (R-Kewadin) in an opinion piece published in today’s Detroit News explaining why he’ll vote against Gov. Rick Snyder’s proposed $350 million (over 20 years) for Detroit’s bankruptcy restructuring.

    The $350 million commitment is part of Emergency Manager Kevyn Orr’s proposed Plan of Adjustment and one of the elements of the “grand bargain”: the $815 million deal that puts money from the state, private foundations and the Detroit Institute of Arts toward funding pensions in exchange for protecting the museum’s art collection from sale.

    McMaster writes that he considers the $350 million “unfair” to local taxpayers and other local governments. He also says it “creates a troubling precedent.”

    Far from the claim that the state has been neglecting Detroit, the state has been propping up Detroit for years. And what have Michigan taxpayers received for their generosity? Epic corruption and fiscal mismanagement.

    I want Detroit to be successful. And I believe the city has turned a corner.

    But northern Michigan has needs too. Our taxpayers can no longer be the state’s piggy bank. And until the state returns its $971 million surplus to taxpayers, reduces the size of government and distributes state funding more fairly, I cannot support this $350 million bailout of Detroit.

    Will McMaster’s opinion prevail in the legislature as out-state politicians reflect his view? Or will the Governor successfully lobby for the city? With a vote expected before summer, Detroit will know in the next few months.


  • The Midweek Medley


    Privatizing DWSD?

    Both Crain’s Detroit Business and the Detroit Free Press published pieces about the solicitation for private bids for the Detroit Water and Sewerage Department by Emergency Manager Kevyn Orr.

    Brent Snavely, Freep business writer, said:

    With negotiations with suburban counties deadlocked, the City of Detroit has issued a request for offers from private companies to operate and manage the Detroit Water and Sewerage Department. … Orr, who is steering the city through the largest municipal bankruptcy in the nation’s history, said the city has a duty to its creditors to explore all options, especially since the city’s proposal for the creation of a regional authority with Oakland, Macomb and Wayne counties is stalled.

    Meanwhile, in coverage of Orr’s speech at the University of Michigan Tuesday, Crain’s Amy Haimerl wrote:

    …Orr also cautioned not to read too much into a recent request for proposals that the city put forward late last week with prospective private sector buyers to purchase or lease and manage the assets of the Detroit Water and Sewerage Department. The department, which has about $6 billion in debt of its own, comprises nearly 3,000 miles of pipes and connectors over more than 1,000 square miles, and talks about forming a regional authority to manage its assets after bankruptcy have recently stalled.

    A 21-page request for information obtained Tuesday by Crain’s calls for interested bidders in a possible sale or lease of the department’s water and sewer network to submit bids by June 1, with a possible award to a bidder coming in August. But Orr characterized that request Tuesday as one option the city could pursue, among many.

    “We would like to have the (surrounding) counties at the table, they account for 65 percent of (department) revenue,” Orr said, but went on to add that Detroit must also demonstrate to U.S. Bankruptcy Judge Steven Rhodes that it “looked at every available option…to raise revenue” for the city, before a confirmation hearing begins in late July.

    Is Royal Oak Township next?

    In the wake of Gov. Rick Snyder’s confirmation that a financial emergency exists in Royal Oak Township (not to be confused with the city of Royal Oak…), the Metro Times opined about the possibility that the .5-square-mile municipality could be the next Michigan locale to file for Chapter 9 bankruptcy. Under Public Act 436, the existing law that addresses local financial emergencies and emergency manager powers, the township may pick an emergency manager, petition for Chapter 9 bankruptcy, neutral mediation, or a consent agreement, the alternative newsweekly writes, continuing:

    … the treasury had found the township failed to submit an annual budget, owes hundreds of thousands of dollars on police services, and overspent more than $500,000 than what it had in its coffers last year. Whichever solution is eventually pursued, the situation isn’t pretty.

    Message to the unions

    Many media reported about Emergency Manager Kevyn Orr’s speech Tuesday at his alma mater. Here’s what the Detroit News led with:

    Detroit Emergency Manager Kevyn Orr on Tuesday amped up the pressure for a bankruptcy deal, warning unions that funds pledged toward pensions are at risk and proceeding with plans for a privately run water department. Orr … urged the city’s unions to reach an agreement on bankruptcy terms soon or risk the loss of more than $800 million in funding to shore up pension funds.

  • State board approves $120 million loan for Detroit

    In the second of three necessary steps, the Michigan Local Emergency Financial Assistance Loan Board Tuesday approved a $120 million loan for the city of Detroit from Barclay’s of London. The funds, backed by the city’s income tax revenue as collateral, will be used for city operations including blight removal, public safety and computer system upgrades.

    The city council previously approved the loan. In the final step, U.S. Bankruptcy Judge Steven Rhodes will consider it, and a hearing is set for April 2. On Monday, Rhodes ordered the city to provide additional information about how it would spend the $120 million from Barclay’s.

    The state Emergency Loan Board has representatives from the Treasury Department, the Department of Technology, Management and Budget, and the Department of Licensing and Regulatory Affairs.

    The Detroit News reports:

    Borrowing approved in this deal represents renegotiated terms of an earlier plan between the city and the London-based bank that fell through. Under the earlier proposal, which wasn’t supported by emergency manager Kevyn Orr, Detroit had hoped to borrow $350 million by pledging its casino tax revenue.

    Under the new plan, Detroit no longer is putting up its casino revenue as collateral, an issue that undercut the prior deal. It also avoids $230 million in borrowing to pay off a controversial transaction brokered by ex-Mayor Kwame Kilpatrick to cover pension debt.



  • Belle Isle Update

    The new Belle Isle Advisory Committee will hold another public meeting from 9 to 11 a.m., Thursday, March 27 at the Dossin Great Lakes Museum on the island.

    On the agenda: reviewing how the Department of Resources will make decisions and communicate about the park’s events, rules, regulations and infrastructure project planning; and scheduling “public listening sessions.” There also is time for public comments during the meeting.

    As part of Detroit’s restructuring, the island park was taken over by the DNR and is operating as a state park. The Belle Isle Advisory Committee, made up of local volunteers, advises the state about Belle Isle’s operations, improvements, planning and public safety efforts.

    More information may be found at

    Here is a compilation of Next Chapter Detroit’s Belle Isle coverage.