• Court Complaint: See the updated challenge to Michigan’s EM law

    Amended Complaint Challenging EM Law 2.12.2014

    To the plaintiffs challenging the constitutionality of emergency managers, the state law providing for such municipal oversight violates some basic principles of U.S. law: the First Amendment-guaranteed rights of free speech and the ability to petition the government.

    Michigan’s Public Act 436, the law providing for emergency managers, also prevents the due process right for citizens to elect government officials and to enjoy equal protection under the law, according to a lawsuit re-filed in federal court Feb. 12.

    “Public Act 436 unconstitutionally strips local voters of their right to a republican form of government by transferring governance, including but not limited to legislative powers, from local elected officials to one unelected emergency manager,” the suit reads. “In each of these communities, citizens will have effectively lost their right to vote for elected officials or had that right diluted so as to render it an exercise in form without substance.”

    Originally filed 11 months ago, the suit is proceeding in U.S. District Court in Detroit. Attorneys re-filed the suit after a status conference last week with Judge George Caram Steeh, who ordered the suit could proceed. The plaintiffs removed claims that the EM law violates the right to collective bargaining. The suit does not directly challenge the city of Detroit’s bankruptcy proceedings.

    The amended complaint includes 25 plaintiffs, many from the 11 Michigan communities with emergency managers helming municipal government or school districts. Some plaintiffs are members of Detroit’s library commission or school board and the Pontiac, Flint and Benton Harbor city councils. They name Gov. Rick Snyder and former state Treasurer Andy Dillon as defendants.

    In part, the suit claims the Michigan Emergency Manager law “establishes a new form of local government, previously unknown within the United States or the State of Michigan, where the people within local municipalities may be governed by an unelected official who establishes local law by decree.”

    Next Chapter Detroit published a previous report about the case and an interview by WDET’s Quinn Klinefelter with one of the plaintiffs’ attorneys, John Philo, of the Sugar Law Center.

    One of the most provocative points of the suit is that 52 percent of Michigan’s African-American population lives in a city that has had an emergency manager or been under consent decree. WDET’s Detroit Journalism Cooperative partner Bridge Magazine explored this dynamic in a Jan. 22 article.

    We’ll follow this dispute as it unfolds in U.S. District Court over the next several months.

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org

  • Ahead of Deadline: City to file readjustment plan within days

    In federal court today, an attorney representing the city of Detroit said the city plans to file its plan of adjustment next week. That’s in advance of the bankruptcy court-imposed deadline of March 1.

    Detroit’s daily newspapers have reported on drafts of the plan, specifically the provisions for leasing the city’s water and sewerage department to a regional authority. Pensioners and other creditors were not addressed in the draft acquired by The Detroit News while the Detroit Free Press reported the city planned to offer unsecured creditors less than pensioners, based on the copy reporters there obtained. The final plan must be approved by the bankruptcy judge.

    The next scheduled court hearing is Feb. 19 when Judge Steven Rhodes will hear an objection from insurers to how the city is treating general obligation bonds.

    By in Bankruptcy Court, Pensions, WDET
  • Legal Questions: Suit challenges Michigan’s Emergency Managers

    A federal judge is allowing a lawsuit to proceed that challenges the constitutionality of Michigan’s emergency manager law. The suit – filed by the Sugar Law Center on behalf of 21 plaintiffs — was put on hold when Detroit began bankruptcy proceedings. Sugar Law Attorney John Philo  tells WDET’s Quinn Klinefelter that the suit argues the emergency manager law violates voting rights by taking away authority from elected officials…and unfairly targets African Americans.

    [sc_embed_player fileurl="http://www.nextchapterdetroit.com/wp-content/uploads/2014/02/Sugar-Law-EM-suit.mp3"] Play Interview

    NextChapter Detroit had an earlier post about the lawsuit with the legal documents available for viewing.

    By in Uncategorized, WDET
  • Dollars for Detroit: An update on donations for DIA, pensions

    In December, the Community Foundation for Southeast Michigan set up an online collection site for donations toward Detroit’s pensions, retaining the Detroit Institute of Art collection and other city revitalization and cultural heritage preservation. Here’s a look at what funds have come in to date.




    By in DIA, WDET
  • Constitutionality Questions: Federal judge clears way for lawsuit on EM law’s legality

    A federal judge’s ruling this week will allow a lawsuit to proceed and challenge the constitutionality of Michigan’s Emergency Manager Law. Filed nearly 11 months ago, the suit may now advance in U.S. District Court in Detroit while a new appeal from the state is pending. The suit names Gov. Rick Snyder and former state Treasurer Andy Dillon. Twenty-two plaintiffs filed the suit,  claiming the Emergency Manager Law violates rights of collective bargaining, due process, voting and representative government under the U.S. Constitution.

    They are represented locally by the Sugar Law Center, the Constitutional Litigation Associates and several local attorneys. The Center for Constitutional Rights in New York also is part of the legal team. 

    Here is the order from U.S. District Court Judge George Caram Steeh: 2.6.14 Order Granting EM Case Reopening

    We also have the Sugar Law Center’s News Release on U.S. District Court Ruling on Constitutionality of Michigan’s Emergency Manager Law

    the EM Constitutional Challenge Complaint

    and The Detroit News story about the ruling.

    By in WDET
  • Don’t say bailout: Gov. Snyder talks Detroit deal

    Michigan Public Radio Capitol Bureau Chief Rick Pluta talked to Gov. Rick Snyder about his budget proposal for the 2014-2015 year.

    The governor wants the Legislature to approve $17.5 million a year (for 20 years) for Detroit. “Why is that a good investment,” Pluta asked.

    Hear what the governor said.

    In addition, Pluta chatted with WDET’s Craig Fahle about the governor’s budget priorities in the coming fiscal year.

    (Michigan Radio is a partner with WDET in the Detroit Journalism Cooperative.)

  • On The Craig Fahle Show: Going East … Creating a corridor, building a better city


    Looking east


     Hear leaders from Jefferson East Inc. discuss their new venture on The Craig Fahle Show.

    Despite the blight that surrounded Pewabic Pottery during the 15 years Terese Ireland-Salisbury was executive director there, visitors to the storied studio and its galleries more than quadrupuled.

    Pewabic took some initiative, making itself a destination with an improved façade and landscape, hosting events and providing private security visible in the parking lot. “People will come and people will explore in Detroit,” Ireland-Salisbury says. “I saw it happen.”

    Now retired from Pewabic, Ireland-Salisbury is part of a new organization, Jefferson East Inc., a collaboration of existing community development corporations, other nonprofits, neighborhood associations and local businesses. The group is betting, like Pewabic did, that it can attract people to Detroit’s east side and encourage them to live, work, shop and play along the entire East Jefferson Avenue Corridor.

    That’s the geographic area that stretches from east of I-375 downtown to the Grosse Pointe Park border about six miles away. It runs inland from the Detroit River to Mack Avenue and includes five neighborhoods, each with its own anchor organization, block clubs and businesses.

    Some of those five districts have stable housing with relatively high occupancy rates, as in Lafayette Park, or historic housing as in The Villages. Others have growing commercial districts, like Jefferson-Chalmers and Rivertown. One, the Marina District, barely exists as a “named” neighborhood but has huge potential for recreation, commercial districts and growth.

    Together the five areas have a variety of housing prices and styles, plenty of room for small businesses to move in and grow, proximity to downtown and the riverfront and, like much of the city, huge potential. As an umbrella organization, the thinking goes, Jefferson East Inc. will help maximize all of those assets.

    “I felt East Jefferson to be an undiscovered jewel,” Ireland-Salisbury says. “But there was no vision for the entire East Jefferson Corridor… Until now.”


    Built by bankruptcy


    Josh Elling, executive director of Jefferson East, Inc.

    Josh Elling, executive director of Jefferson East, Inc.

    Detroit’s fiscal failings and now its bankruptcy are partially responsible for Jefferson East Inc.’s formation, says its executive director, Josh Elling.

    “Historically the city could afford to have a lot of small nonprofits,” he says. “They used to sort of dribble our community development block grant money to small pockets and support small organizations. I think there’s been a trend now toward having fewer organizations but having organizations with more capacity.”

    Elling, as the leader of the former Jefferson East Business Association, has worked with four mayoral administrations in the last few years. Such turnover is always a challenge, and as the city has cut services, Elling has watched neighborhood organizations and community development corporations pick up the effort.

    In Jefferson East’s districts that effort has included policing efforts through private security and crime data analysis partnerships; economic development; recreation projects like greenways and parks; housing projects and small business support.

    But there were varying levels of expertise, ability and financing for such efforts across the east side. With the new group, Elling predicts those efforts will be better shared across the corridor.

    “It allows us to think about the entire East Jefferson Corridor as a system of interconnected neighborhoods that have different market conditions,” he says.

    But common to all the east side neighborhoods is the riverfront, which Jefferson East leaders agree is an untapped resource in their corridor.

    Brian Hurttienne, executive director of Villages of Detroit Community Development Corporation

    Brian Hurttienne, executive director of Villages of Detroit Community Development Corporation

    “I think that the evolution of Jefferson East Inc. is indicative of where the city is in its declaration of bankruptcy,” says Brian Hurttienne, executive director of The Villages Inc., the community development group of Indian Village, West Village and four other nearby neighborhoods. “There needs to be an agency or organization involved that takes care of the major assets of the city.”

    Among those is the riverfront. Consider Belle Isle, which draws plenty of people eastward from the city’s more dense downtown, southwest and west side neighborhood. Hurttienne and others say, if those visitors ventured off the island park, they would find interesting neighborhoods, other recreation sites, and shopping and dining opportunities.

    Jefferson East Inc. is encouraging that with its new “Go East” campaign. Launched last month, the campaign showcases the east side as a whole by featuring businesses, neighborhoods and events.

    One of the group’s biggest challenges is that none of the eastside areas are as well known, successful or organized as, say Midtown, downtown, southwest Detroit’s bustling business and tourism areas or the Grandmont-Rosedale neighborhood.

    “We want to take from Midtown, what they’ve been doing and keep it flowing out this way,” says Paulette Foster, a nearly 30-year resident of the Jefferson-Chalmers area that borders Grosse Pointe Park and board member with Jefferson East Inc. “The new organization is good because it gives us that seamless transition.”

    header-logoThe “Go East” effort, as well as the new group’s launch, has been supported by numerous foundations and local businesses, including the Community Foundation for Southeast Michigan.

    “We have long supported Detroit’s near-east side. In particular, we’ve worked with the neighborhoods to help the broader public to understand the exceptional assets that adjoin the arteries of the riverfront and East Jefferson,” said Mariam C. Noland, Community Foundation president. “The formation of Jefferson East, Inc. and the “Go East” rebranding initiative help position the area to benefit from the coming revitalization of Detroit.”

    What Emergency Manager Kevyn Orr’s forthcoming restructuring plan will look like, which powers the city council will retain or gain, and how Mayor Mike Duggan’s neighborhood department will operate are all outstanding questions that Jefferson East Inc. leaders can’t answer yet.

    “I don’t know what the city’s forthcoming new structure is, I’m not sure anyone does,” Hurttienne says.

    But whatever Detroit’s future organization is, Hurtienne says the new group will have a stronger voice and visibility that its individual member organizations would alone.

    “I see Jefferson East playing a complementary role to where the city government is these days: reinforcing the public safety aspect of the corridor, reinforcing the clean up that they do, trying to do economic development and streetscape improvements, as well as encouraging businesses to move in and doing placemaking,” he says.


    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org


  • ‘Pennies from Kevyn’: Detroit bankruptcy goes musical

    Detroit’s Chapter 9 filing is, really, a serious topic.

    But an area singing troupe has taken inspiration from the characters, issues and actions and created musical parody. Think: “Pennies from Heaven” reworked as “Pennies from Kevyn” as in Orr, the city’s emergency manager.

    Bondholders will only get…Pennies from Kevyn

    Workers will do poorer yet…Pennies from Kevyn

    Protesters block traffic so they can condemn

    This guy’s appointment as an EFM…

    …and then there’s “You Gotta Sell Art,” with the familiar melody from the Damn Yankees musical number:

    You gotta sell art

    Every masterpiece and part

    ‘Cause once you wind up in Chapter Nine

    You’re out of time, so better start…

    [sc_embed_player fileurl="http://www.nextchapterdetroit.com/wp-content/uploads/2014/02/gotta-sell-art-1.mp3"] Play “You Gotta Sell Art” 

    A (Habeas) Chorus Line

    It’s what A (Habeas) Chorus Line has done for decades: translating local, national and international headlines and trends into music and laughter. Past subjects have included Geoffrey Fieger, the Michigan Militia, Martha Stewart, Kwame, Hillary, Interstate 696, eBay, Starbucks, Viagra…and plenty more. Some are original musical numbers, others are take-offs on well-known tunes.

    “Most of the time I’m looking for parodies,” says Justin Klimko, the group’s lyricist and the president of Butzel Long law firm. “(Audiences) don’t mind an original song or two from time to time, but they don’t get into it in the same way because they don’t recognize the melody.”

    Since it formed in 1992 for what was supposed to be a one-time gig, A (Habeas) Chorus Line has performed 150 shows around the state and nationally to audiences ranging from legal and trade groups to religious institutions to chambers of commerce. This weekend, they have a fundraiser performance at 7:30 p.m. Saturday at Pierce Middle School, 15430 Kercheval Ave., Grosse Pointe Park. Tickets are $20.

    The nine members of the group are all lawyers except for retired federal case manager Sara Fischer Hodges, who, ironically worked for both Federal Bankruptcy Judge Steven Rhodes and Judge Gerald Rosen, both the chief U.S. District judge in Eastern Michigan and the mediator in Detroit’s case.

    “I feel absolutely confident in saying the city couldn’t be in better hands during this difficult time,” Fischer Hodges says of her former bosses. “They are brilliant jurists and really good, honest human beings.”

    None of the (Habeas) Chorus Line members have any current role with Detroit’s bankruptcy … outside of poking a bit of fun at some of the players and the process through their musical numbers.

    “We say what most people are thinking – just in a really humorous way.  We don’t cross the line – but sometimes we do walk the tightrope,” Fischer says.

    Translating the city’s financial fallout into humor requires a certain skill, admits the group’s musical director James Robb, who is also the associate dean for external affairs and senior counsel at Thomas M. Cooley Law School.

    “For a group that works in parody and satire, Detroit is a very rich environment,” Robb says “What makes us especially good is that we do have a local take on things, a local perspective.”

    That comes through in “Belle Isle” set to the tune of “BALI HA’I” from South Pacific:

    …Belle Isle will whisper “I’m not doing so great

    Please lease me, your special island, To the state, to the state

    “Though I’ve always been a fighter, My future’s looking dark

    Please allow Governor Snyder, To make me a state park”

    Belle Isle, Belle Isle, Belle Isle!

    A (Habeas) Chorus Line’s current “play list” doesn’t just lambaste Detroit, though. “There are all kinds of politicians and entertainers saying and doing stupid things,” Robb says. Indeed Edward Snowden, Oprah and Disney World are all, well, targets in the Saturday show.

    And just because A (Habeas) Chorus Line’s performers are all veterans of Michigan’s courtrooms doesn’t mean the legal profession is spared from the fun. A new number this year is “What a Difference Jones Day Makes” set to Dinah Washington’s “What a Difference a Day Makes.” Jones Day, of course, is Orr’s former law firm and the group with the largest share of the city’s legal contracts for the bankruptcy process.

    The parody goes:

    What a difference Jones Day makes

    Charging thousands of hours

    It’s quite clear where the power

    In the city now rests

    Our yesterday seemed fine, dear

    Today it’s Chapter Nine, dear

    Revenues in decline, dear

    While politicians resign

    What a difference Jones Day makes.

    “There are some things you just can’t make fun of, but bankruptcy is not one of them” Klimko says.

    At least for a few bars, A (Habeas) Chorus Line makes Detroit’s Chapter 9 situation harmonious.

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org


    By in WDET
  • City of Detroit sues over its own pension set up

    In his testimony earlier this month in bankruptcy court, Detroit Emergency Manager Kevyn Orr said his team of attorneys had advised him there were potential legal issues with a pension deal that left the city holding $1.4 billion in debt obligations.

    Today he MADE it a legal issue by authorizing the city’s 799-page filing in U.S. Bankruptcy Court against two service corporations and two trusts related to the pension deal. “This deal was bad for the City from its onset despite reassurances it would adequately resolve the City’s pension issues,” Orr said in the statement released this evening. “We have tried without success, to negotiate a resolution to this dispute and to allow the City and its taxpayers to move forward and unwind these illegal transactions.”

    And here is the actual lawsuit, filed today:



    Detroit always has a next chapter…

    The Detroit Free Press had a story about the lawsuit and the history of the pension deal.

    By in Feature, Pensions, WDET