National attention

  • In Bridge: Lessons for other municipalities from Detroit’s Chapter 9

    Detroit’s financial problems have not been of the one-size-fits-all variety, so state and local governments across the U.S. should take care not to assume the city’s historic Chapter 9 filing is the only solution for distressed municipalities. That said, Detroit is a good case study for the importance of early state intervention when community fiscal troubles become evident. That’s the conclusion of researchers with Philadelphia-based Pew Charitable Trusts in a new report. Read about it in Detroit Journalism Cooperative partner Bridge Magazine here.

  • Catching up on Detroit’s bankruptcy news…and Puerto Rico’s

    Detroit’s blight

    The Detroit Land Bank Authority will receive nearly $12 million from the city’s general fund, following a split City Council vote last week. Land bank officials say they needed the monies to operate and continue demolition of vacant and abandoned properties.

    The council also transferred nearly 38,000 city-owned residential properties to the Land Bank, which seeks to put them back into productive use or clear them.

    The Detroit News reported:

    Council President Brenda Jones, who along with members Raquel Castaneda-Lopez and Janee Ayers voted against the subsidy, said she’s reluctant to take on the financial responsibility.

    Detroit, she said, is operating under the oversight of a Financial Review Commission that will go away if officials budget responsibly and avoid deficits for three years.

    “My concern is this; we just emerged from a bankruptcy,” Jones said. “The city looks pretty good. I don’t want a deficit to occur in three years because the city is going to be responsible for what the land bank does if the land bank doesn’t have any money.”

    The city’s blight was a major issue of the bankruptcy case, with several city officials testifying it was one of the top concerns as they looked to revitalize Detroit.

    Orr’s pay in Atlantic City

    Former Detroit Emergency Manager Kevyn Orr collected a higher hourly wage in his consulting role in Atlantic City than most of the attorneys who worked on the Detroit bankruptcy case, according to published reports.

    Orr, who was appointed by New Jersey Gov. Chris Christie as a consultant for the financially challenged casino town, charged $950 an hour during his three months of work. His total collected: about $70,000, the Press of Atlantic City reports.

    Bankruptcy watchers have sights on Puerto Rico

    Like Detroit did two years ago, the sunny island of Puerto Rico is facing a debt crisis: $73 billion owed to financial creditors, NPR reports. With four times the debt that purged Detroit into bankruptcy, the sunny paradise destination is looking for any solution out.

    With a junk status rating, Puerto Rico is trying to negotiate a new bond sale with Wall Street investors. At the same time, the island’s troubled energy company, PREPA, is desperately trying to stave off default. … To deal with its debt, Puerto Rico passed a law that would allow troubled agencies like the state-owned power company to seek bankruptcy protection. A federal judge struck down the law, though, ruling it violated the federal Bankruptcy Code. The commonwealth is appealing that decision. It’s also pushing for a law in Congress to amend the Bankruptcy Code to include Puerto Rico. In the meantime, the island needs to find money to pay its creditors. And that means raising taxes.

     

     

     

     

     

     

     

  • Atlantic City’s EM Report: Recommends cuts and layoffs, not Chapter 9

    Like Detroit, the casino town on the Jersey Shore faces declining revenues, retiree obligations and other expenses it can’t pay for. Gov. Chris Christie appointed an emergency manager earlier this year, and former Detroit Emergency Manager Kevyn Orr is advising. The duo released a report Tuesday (see below), calling for layoffs and cuts but not a bankruptcy filing. Here’s the Philadelphia Inquirer’s story, which begins:

    Warning of a liquidity crisis through 2015 and a revenue decline “a lot more severe” than they had anticipated, Atlantic City’s emergency managers on Tuesday recommended $10 million in budget cuts, hundreds of layoffs, and mediators to negotiate with casinos and unions. The 60-day interim report by Kevin Lavin and Kevyn Orr, appointed by Gov. Christie, highlighted a $101 million budget shortfall for the city and a $47 million shortfall for the school district, but was short on details of how the city’s long-term financial woes can be solved.

    The Wall Street Journal wrote in this piece:

    Releasing a much-awaited report on the city’s future, the emergency managers laid out about $130 million in proposed cuts to close the shortfall. They anticipated further challenges for the struggling gambling resort, saying Atlantic City “simply cannot stand on its own” and probably would need significant state help for the foreseeable future.

    And the local newspaper, The Record,  weighed in with this:

    Hundreds of Atlantic City’s full-time workers could be laid off to close a multi-million dollar budget gap and address a fiscal crisis that is “a lot more severe than we thought,” a financial expert hired by Governor Christie said Tuesday.

    As a finale, we bring you PhillyMag.com’s “5 Charts That Show Just How Screwed Atlantic City Is.”

    City of Atlantic City 60-Day Report of the Emergency Manager

  • Tavis Smiley on location in Detroit this week

    Tavis Smiley, PBS’s popular late night television host, is in Detroit this week to tape five episodes of his award-winning program, Tavis Smiley. Detroit Public Television will film the show in front of a live audience at the Community Arts Auditorium at Wayne State University.

    Tickets to be part of Smiley’s live studio are available by clicking HERE.

    Tavis_Duggan_032315The first episode, featuring Smiley and Mayor Mike Duggan, aired Monday  at midnight.

    Smiley’s series of episodes taped in Detroit will  focus on the city’s rebirth and recovery, paying particular attention to the bankruptcy’s role in rebuilding downtown, pressing issues facing Detroit residents, the Arab-American population in Dearborn, the city’s arts community and the problems facing inner city education.

    Smiley has spent the better part of his career focusing on issues facing the African-American community. Starting out in local public radio in Los Angeles on KGFJ, Smiley went on to host social issue forums on C-SPAN as well as host and produce his own shows on Black Entertainment Television and National Public Radio. He has also published numerous books and essay collections discussing a wide range of topics from poverty to education and healthcare, and the Tavis Smiley Foundation helps fund programs aimed at developing young leaders in their communities.

    Detroit Public Television is a partner with WDET in the Detroit Journalism Cooperative.

    Photos courtesy Detroit Public Television

    Photos courtesy Detroit Public Television

  • On NPR: Frida-Diego exhibit signifies city’s comeback

    “The DIA spent much of the last two years under threat as its owner, the city of Detroit, looked for ways to emerge from bankruptcy,” NPR reports in a segment that aired on “All Things Considered” this week. As the exhibition “Diego Rivera and Frida Kahlo in Detroit” attracts visitors, NPR finds the famed murals and the couple’s historic legacy now has much more to do with a resilient city’s future following its bankruptcy case.

  • Why Atlantic City is in financial emergency

    Gambling revenues cut in half in the last eight years. Property values declining. A third of its casinos shutting down. “Unsustainable bond issuances” funding pension payments. “Imminent danger of running out of cash.”

    That’s what former Detroit Emergency Manager Kevyn Orr will face as a special consultant to Atlantic City’s newly named emergency manager, according to New Jersey Gov. Chris Christie’s executive order. Here’s the full document:

    EO-171

     

  • The Year(end) in Bankruptcy

    Detroit had an historical year in 2014, to say the least and to say it again.

    The city’s bankruptcy – history’s largest municipal case, as we’ve said, written and blogged countless times — monopolized local news, and 2014 brought Detroit and the bankruptcy to the forefront of all local and some national news outlets. Former Emergency Manager Kevyn Orr and Bankruptcy Judge Steven Rhodes captured headlines, and the “grand bargain” became a household phrase.

    Here is a look at some of the year-end news recaps as well as into what 2015 might hold for Detroit:

    The city’s past and the future were discussed on 2014’s final Flash Point with optimism reigning supreme. Former City Council Shelia Cockrel, however, “cautions city officials that hard work is on the horizon as the return from bankruptcy continues.”

    The WDIV program’s guests included  Portia Roberson, the city’s group executive for civil rights and ethics, Cockrel, political consultant  Adolph Mongo and The Detroit News’s Nolan Finley. The picture painted of the future is bright but not without bumps in the road.

    Roberson predicts 2015 will “undoubtedly be a better year for the city of Detroit, thanks to the emergence from bankruptcy and resulting financial flexibility.” But Cockrel cautions city officials that there is plenty of work left. Mongo suggested ways the city can avoid past mistakes, Finley recommend focusing on raising revenues.

    The Detroit Free Press provided comprehensive coverage throughout 2014 about the bankruptcy. Through their extensive reporting, Freep reporters composed a bit “manifesto” chronicling Detroit, the bankruptcy and how it got there. “And, ultimately, it’s the story of how, one by one, like soldiers switching sides in the midst of battle, the major players and creditors who had been at war with the city dropped their objections and joined a “grand bargain” to save Detroit.” It was published in November, but we think it’s worthy of a re-post at year’s end.

    Crain’s Detroit Business named Orr and Rhodes Newsmakers of the Year for 2014. Their work doing what many believe to be impossible earned them this titled.

    USA Today, in a year-end wrap up of the single biggest news stories in all 50 states, named the bankruptcy as Michigan’s. “The nightmare is over,” they wrote.

    Still, the bankruptcy didn’t solve all of the city’s problems. An Agence France-Presse piece, published in Business Insider, outlines the great progress the city has had but also makes note of problems that still lie ahead.

    The venerable New York Times also points out that many questions remain to be answered as the city moves forward.

    For the local take on what remains, here are the Freep’s answers to those questions.