The Craig Fahle Show

  • Today in Bankruptcy Court: Getting at the DIA collection

    It’s a busy day in bankruptcy court, with Judge Steven Rhodes considering several items. I’ll post about them as they happen today.

    First up was the motion by two bond insurers, who collectively stand to lose about $1 billion under the city’s current financial plans. They want to examine the Detroit Institute of Arts collection with the goal of appraising it. The bond insurers, Syncora and Financial Guaranty Insurance Company, say they have buyers for the collection and the sale of it would help offset some of the city’s debt.

    Minutes after the attorneys for the bond insurers, the DIA and the city finished their arguments, The Detroit News’s Robert Snell filed this story.

    Judge Rhodes will rule after lunch on the bond insurers’ motion.

    The morning discussion also included Judge Rhodes asking the attorneys the same question Craig Fahle asked me this morning on our weekly segment on his show: Why does the art need to come off the wall for inspection? Like me, the attorneys couldn’t really answer that question. Here’s part of the exchange, with a bit of paraphrasing but mainly direct quotes:

    Judge Rhodes: The DIA is concerned about the potential and the risk of damage to the art (if it’s taken off the wall or otherwise moved).

    Attorney Alfredo Perez for bond insurer FGIC: Your honor, that is an absolutely valid concern. We are prepared to work with any reasonable restrictions on that. I think that is really a red herring.

    Judge Rhodes: I’m not sure the DIA would agree…

    Attorney Perez: These are all very responsible people. These are people in the business. … They would be able to satisfy any reasonable concerns the DIA would have.

    Judge: So why is it that removal from the walls is necessary to accomplish your goal here?

    Attorney Perez: We went back to the bidder, and they indicated that in order to determine the authenticity they really would have to inspect it.

    Judge Rhodes: Is there doubt about the authenticity?

    Attorney Perez: I don’t think so.

    Judge Rhodes: Then why is it necessary?

    Attorney Perez: This would be subject to negotiation. We were told the reason it was necessary is that in order to appraise it in a way to make a firm bid, you really have to inspect it.

    -By WDET’s Sandra Svoboda

    @WDETSandra and

  • On The Craig Fahle Show: Rep. Stallworth defends the Detroit bills

    The special Michigan House Committee on Detroit’s Recovery and Michigan’s Future is meeting this week to consider a package of 10 bills that would provide funding, oversight and other terms for Detroit.  Rep. Thomas Stallworth III (D-Detroit) is a member of the committee and he spoke with WDET’s Craig Fahle today.

    Here’s a transcript of what he said. Craig’s questions are paraphrased:

    Craig Fahle (CF): What are these bills about?

    Rep. Thomas Stallworth (TS): We’ve got thousands of people who are retirees, whose future, their quality of life, really, depends on our ability to get this legislation through. Equally important is moving Detroit out of bankruptcy and putting it on a path to future prosperity, and, quite frankly, in doing so we not only help Detroit but we help the state of Michigan.

    CF: What is the reason for the proposed 20 years of oversight for Detroit that is part of this legislation?

    TS: Quite frankly, we looked at where a large municipal bankruptcies or financial crises have occurred around the country, whether it’s the District of Columbia or New York, which seems to be the model most people look at. Oversight is always a component of any financial assistance, and, in fact, from a practical standpoint, that’s going to be a requirement in order to get the funding. So I’m OK with some level of oversight but I’m not OK with oversight that really steps on our ability to be self determined and self governed.

    CF: What are your thoughts about the oversight provisions in the bills?

    TS: One is that if we’re having an oversight board or commission that local elected officials have some input or representation on that board, that being the mayor and city council, so that their voices are heard as well. Secondly, I think we need to be clear on what the metric or performance level is … to get out from under the oversight. Currently that’s unclear in the legislation. I think what’s critical is being clear and reasonable about the level of performance that the city needs to have to come out from under oversight and not leave the door open for continued, unjustifiable oversight.

    CF: What amendments do you expect?

    TS: As you know, very few bills end up as they start out so we have started the process, we’re in dialogue, there are a number of issues that need to be addressed and I’m confident that we’ll be able to address them. My hopes are that we’ll land in a position that, again, protects our retirees and affords us the opportunity for some assistance with our pensions and that if there is oversight, that it is reasonable and justifiable.

    CF: Does Kevyn Orr have the ear of legislators?

    TS: I think Kevyn laid out a reasonable game plan in the Plan of Adjustment. I believe he has some credibility with Republicans and the governor’s office and if there’s one thing I would emphasize more, and I tried to emphasize it in my questions, is just providing a deeper understanding of just how severe the cuts to the pensions, wages and benefits would be … Secondly, the impact of this would have on the state’s economy and the need for additional public assistance dollars for senior citizens otherwise would not be.

    CF: Did he make that case adequately? One of the questions that I get asked all the time is, “What happens if the grand bargain doesn’t work?”

    TS: I think we’re going to have to continue to explain to people just how critical this is and the severity of cuts to quality of life that affect seniors, retirees and active employees. … It’s not a one-time compensation, and of course, there are those in the state who probably feel like they don’t necessarily want to help Detroit or that Detroit doesn’t deserve it. Detroit is a legal entity, and this package of bills is primarily set up to help people who are on fixed incomes and who, absent this package, would probably be facing some 50-60 percent reduction in their monthly pension checks, ultimately putting them in poverty.

    CF: Do you think the full Legislature, with its Republican majority, will support this legislation?

    TS: I think that was made clear when the so-called Grand Bargain was initially announced at a press conference held by the governor where he was joined by (House) Speaker (Jase) Bolger and Senate Majority Leader (Rand) Richardville. All three at that point in time indicated that they were supportive of the idea an that they would be supportive of putting a process together to see if we could move the legislation forward that ultimately would help resolve the pension crisis.

    CF: What is the effect of having the special, small, five-member committee that’s considering this legislation?

    TS: I think that the purpose of having a smaller committee is one that ensure that we have people on the committee who are going to be careful to not overly politicize the issues and really stay focused on the main objectives. And the main objectives are again, to protect seniors and retirees first and foremost, secondly to get the city out of bankruptcy as quickly as possible because quite frankly, as the city goes through this bankruptcy process, the state overall will suffer severely as well. And then lastly, of course, we can’t forget that the bills are designed to provide some security for the DIA.

    CF: What are you hearing from your constituents about the proposed legislation?

    TS: It’s a mixed bag, and it’s very interesting because I think the way I see it is a lot of how people see it has to do with age and circumstance. Those who are near retirement or at retirement feel very strongly about moving this package of legislation through. I think maybe some of my younger constituents are much more concerned about oversight and retaining our rights to self governance. I think each is equally important, and what we’ve got to do is really strike a balance where maybe not everybody is happy but we’re accepting of the end product.

    CF: Are we getting close to adopting the legislation?

    TS: It’s a little early, Craig, a little early, but I have confidence. I have confidence in the committee members that have been assigned. I have confidence that at the end of the day, the general public and the Legislature will understand just how important this is to the state’s future.

  • The DJC Poll: Here’s the collection of coverage showing statewide support for supporting Detroit

    The Detroit Journalism Cooperative wanted to know what voters outside of Detroit think about the state proposals to support the city’s pensioners and protect the Detroit Institute of Arts collection as part of the bankruptcy case. So we asked them in an EPIC-MRA poll, commissioned by the DJC with support from Renaissance Journalism through a grant from the Ford Foundation. We sought to measure how voters outside Detroit think about the city, and whether they back a state financial contribution to help Detroit emerge from the largest municipal bankruptcy in U.S. history.

    What did they say? Below is a round up of all the partner coverage of the poll results.

    The results are especially timely as  today in Lansing legislators begin taking testimony and considering a 10-bill package to providing funding for and oversight of the city.

    From Bridge Magazine:
    State should send help to Detroit, Michigan voters say

    Michigan voters, including Republicans and those who live far from bankrupt Detroit, want the state to provide financial support to its largest city as part of a “grand bargain,” according to a statewide poll. What’s more, voters across the political spectrum said they would not hold a vote in support of Detroit financial aid against their own elected representatives. The findings come as lawmakers in Lansing debate a $350 million funding package for Detroit that critics deride as unwise and unfair to other struggling Michigan communities.

    From Michigan Radio:
    New poll: Save Detroit art and retirees’ pensions

    A new poll shows Michigan voters outside of Detroit approve using state money to support the so-called “Grand Bargain” to bolster City of Detroit retirees’ pensions and protect the Detroit Institute of Arts’ collection. It found almost half of voters outside the city of Detroit support the state government contributing $350 million to help solve some of the sticky issues of the bankruptcy. Forty-nine percent favor the contribution, 34 percent oppose it.

    People like the plan better when they learn that the $350 million would go to bolster the retirees’ pension funds and protect the Detroit Institute of Art from having to auction off part of its collection.

    Bernie Porn is with EPIC-MRA, the firm that conducted the poll. He says after you boil it down, when people know the money goes to retirees and to help the art museum, more people approve. “When you do that, you end up with 62% support for the proposal and that includes 74% of Democrats, 58 percent of Republicans, and then only 51 percent of independents,” Porn explained.

    From WDET Radio:
    Voters want state money earmarked for pensions, art

    A new poll released today shows widespread support throughout Michigan for providing state money to Detroit especially when it’s designated for pensions or maintaining the Detroit Institute of Arts collection.

    Roughly eight in ten respondents in the new poll say they view Detroit’s financial health as very important or essential to the health of the state. Nearly two-thirds of people in the survey say it’s a top priority or important for their elected officials to address Detroit’s financial recovery.


  • Detroit’s Eco-tourism Agenda: It’s got birds on it

    Gabriel Richard Park on Detroit’s east side near the Belle Isle bridge

    With 200 bald eagles wintering in nearby Monroe and often flying over Belle Isle, Detroit’s status as an eco-tourism destination is soaring. John Hartig, manager for the Detroit International Wildlife Refuge, spoke with WDET’s Amy Miller about plans for a new observation area at Gabriel Richard Park for viewing of eagles and other waterfowl. Hartig thinks that city can further capitalize on its environmental assets and boost its recreation industry.

  • On The Craig Fahle Show: Lansing and the Grand Bargain

    Governor Snyder and Republican leaders have said they would like the Legislature to agree to hundreds of millions of dollars in support of Detroit through bankruptcy, but what assurances will they need to give skeptical lawmakers in order to get the deal done in the next month? Craig talks with three Lansing-based reporters…