63 results for blight

  • Detroit details $179 million investment plan

    Plans for more cops and firefighters, vehicles for them, additional money for park upgrades and blight removal, city employee training and several technology upgrades. That’s what the city proposes if a $120 million loan is approved, according to a court filing Friday.

    The Detroit Free Press reports:

     The city listed $179 million in near-term investment needs for its beleaguered public safety, antiquated record-keeping systems and blight removal in response to creditor complaints that Detroit wasn’t detailing how it would spend the fresh debt from London-based Barclays, which must be approved by Judge Steven Rhodes.

    In the court filing (see below for document), the city proposed how it would use the loan proceeds, including:

    • $36.2 million for the police department, specifically for fleet vehicles, construction of new precincts and a training facility, IT upgrades, hiring and equipment purchases;
    • $35.6 million for residential blight removal;
    • $28.5 million for the fire department including vehicle purchase and maintenance, facility repairs and maintenance, IT upgrades and hiring;
    • $25.4 million to the finance department for hiring and IT upgrades;
    • $24.8 million for the general services department to be used for park upgrades and ground maintenance fleet replacement, citywide facility improvements, and repairs and increased staffing;
    • $5.1 million to demolish the Herman Kiefer building;
    • $4.5 million for facility consolidation and hiring in the planning and development department;
    • $3.4 million for city employee training;
    • $2.7 million for transportation facility improvements and service costs;
    • $3.2 million for recreation facilities repair and maintenance, and parks and recreation facility improvements;
    • $1.6 million for more legal staff;
    • $800,000 for the elections department to cover deferred maintenance and improvements;
    • $600,000 for human resources staff.

    3.28.14 City of Detroit Post Petition Financing

  • 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.



  • Bankruptcy and Children: How Detroit’s youngest are faring and what they face

    Everyone is affected by Detroit’s bankruptcy, but the Associated Press examined its specific effects on the youngest citizens: children and teens. The wire services reports:

    (Detroit) is a city in the throes of the largest municipal bankruptcy in U.S. history, where life places special stresses on young people. Many say Detroit is finally on the rise after hitting bottom. Yet teachers and parents worry about the toll of growing up amid danger, dysfunction, and the blight epitomized by tens of thousands of abandoned homes.

    “This is what we’re ingraining into kids’ psyches — this emptiness, the lack of safety,” said Tonya Allen, chief executive officer of the Skillman Foundation, which backs many child-oriented initiatives. “They’re going into school with a level of fear that something bad is going to happen.”

    Gang violence. Infant mortality. Lack of public parks. Limited public bus services that many teens rely on. Here’s another piece about specific challenges for the younger population of the city…and some of the possible remedies.



    By in Blight, Neighborhoods
  • Does graffiti have a role in urban revitalization?

    If you’re a graffiti artist – or writer, or vandal, depending on your point of view – no canvas is as big and appealing as Detroit, writes Nancy Derringer at Bridge Magazine, our Detroit Journalism Cooperative partner. In Detroit and other cities working to revive aging industrial cores, there is growing debate over whether graffiti is a legitimate form of grassroots art that enlivens gray cityscapes, particularly blighted ones, or a plague that slows revival. See how that argument is playing out in a sampling of Michigan cities.


  • NPR in Detroit: Here’s what the country heard

    The politics of division. Hangovers from the racial divides. Lack of regionalism. The new, white mayor. And of course how 8 Mile divides the region. Here’s a segment National Public Radio produced for last weekend. If you’re a Detroiter, you’ve heard this story a million times. How can we move this storyline along for the rest of the world?

    NPR also reported about the organization Reclaim Detroit, a group that deconstructs abandoned homes and recycles the materials from them. Isaac Lott helps tell the story. He’s a former drug dealer who works for Reclaim Detroit. He says getting rid of blight and getting kids educated will help improve the city.

    A few years ago, the Detroit Symphony Orchestra was on the brink of bankruptcy and the musicians were on strike. An auditor famously reported the institution had “no business being in business.” But a turnaround took place, and NPR brought it to listeners.



  • Detroit Regional Chamber: Hope for the city

    If there was one theme at the Detroit Regional Chamber’s local policy conference, it was optimism: Detroiters are an optimistic bunch. In discussions ranging from national urban policy to blight, from neighborhood needs to regionalization’s realities, almost everyone at the conference reflected hope, faith and optimism. No one thinks Detroit’s path out of bankruptcy and potential recovery will be easy, but they do think it’s possible.

    Here’s the Chamber’s email recap about the event:

    Buzz Around City’s Next Chapter Palpable at 2014 Detroit Policy Conference
    Approximately 800 attendees came together for the Detroit Regional Chamber’s 2014 Detroit Policy Conference to focus on Detroit’s next chapter. Bringing nationally renowned keynotes and nearly 40 of the region’s most dynamic leaders to the forefront of Detroit revitalization discussions, the Conference sparked dynamic dialogue on the future of The Motor City’s business landscape. The day started with a video featuring Detroit leaders depicted in the September/October Detroitermagazine and concluded with a reception with the new City Council.The Conference featured The Detroit Experience in the ballroom, where exhibitors highlighted the organizations and initiatives contributing to Detroit’s transformation as well as onsite broadcasts from WJR’s Frank Beckmann Show andDetroit Public Television’s MiWeek. The Chamber would like to thank platinum sponsors, MotorCity Casino Hotel andOpportunity Detroit. For a full list of sponsors, click here.

    Urban Artist Candy Chang Illustrates the Effectiveness of Art to Solidify a Community

    A city’s buildings and structures can serve a greater purpose than visual effects – they can enhance togetherness in a community and empower residents. That was the picture painted by Candy Chang, senior TED fellow and urban artist and designer.
    Chang discussed the power of creativity in public spaces in the nourishment of peoples’ personal well-being. By introducing various projects from throughout her career, such as her “Before I die, I want to…” initiative, Chang illustrated to attendees the impact of simple, anonymous projects. Artwork has the ability to unite strangers and provide everyone with a voice to strengthen communities. To view video of Chang’s presentation, click here.

    Chamber Announces Partnership with Startgrid, NEI Grant to Launch Entrepreneurial Program
    The Chamber announced its partnership with Startgrid in launching a collaborative community for entrepreneurs to come together to test, share and grow ideas that will change the world. The launch came with the news of a $100,000 grant from the New Economy Initiative to support the effort.To introduce Startgrid, Chamber CEO Sandy Baruah was joined on stage by Peter Gardner, CEO of Startgrid; Benjamin Erulkar, vice president of economic development – new development strategies at the Chamber; and Dave Egner, executive director of the NEI. Startgrid offers businesses a place to develop ideas among people who understand entrepreneurship, collaborate with trusted experts and friends to build ventures, and meet people who can help expand ideas. To learn more about the program, click here.

    Shaping the Future: Despite Challenges, Detroit Has Resources to Write Strong Next Chapter
    There isn’t a city in the country poised for growth and comeback like Detroit. That was the inspirational message gleaned from the Conference’s closing panel discussion, “Shaping the Future: Detroit’s Next Chapter.”The panel emphasized the importance of placing an equal premium on business startups as well as existing companies, and the notion that, while politics is key, the “business as usual” approach should no longer be a part of the city’s governance. Despite the challenges that lie ahead, panelists agreed that Detroit has the resources to write an impressive next chapter over the course of five years and beyond. The panelists wereDave Egner, executive director of NEI; Don Graves, executive director of President’s Council on Jobs and Competitiveness;Dan Kinkead, director of projects of Detroit Future City; andThomas Sugrue, David Boies professor of history and sociology. The discussion was moderated by Christy McDonald, anchor of DPTV’s MiWeek. To view clips from this session, click here.

    Urban Expert Thomas Sugrue Challenges Traditional Rhetoric on Detroit Revitalization
    To come up with effective solutions for Detroit’s future, it is imperative that the city’s origins are understood. Thomas Sugrue, David Boies professor of history and sociology at the University of Pennsylvania, made that point to the audience as he delved into the historical circumstances that eventually led to Detroit’s bankruptcy. Sugrue provided general principles to illustrate common misconceptions about urban revitalization and offered solutions for Detroit’s continued transformation. He stressed the importance of a diverse labor market with well-paying and secure jobs, reduced barriers to education and densification of the city. Sugrue encouraged the community to nurture institutions and universities, embrace immigrants, and make exerted regional collaboration efforts as solutions to bolster Detroit’s economic growth. To view video of Sugrue’s presentation, click here.

    Wayne State President M. Roy Wilson Touts Economic and Social Benefits of Higher Education
    The social mobility made possible by a college education is the key to a strong middle class, and the gateway to the American Dream. That point was emphasized by Wayne State University President M. Roy Wilson during his keynote address at the Conference. In addition to identifying career advancement and expansive networks as benefits of higher education, Wilson demonstrated the socioeconomic impact that university research can have on a community, including millions of dollars’ worth of economic impact and hundreds of thousands of dollars in state tax revenue.

    Wilson spoke of Detroit’s residents and resources playing a role in the city’s transformation, including the impact made by public universities. He urged attendees to use education to change the city; to leverage university resources and unleash them to most effectively attract talent and investment to the region. To view video, click here.

    Additional Conference Sessions

    Chief Craig, Community Leaders Highlight Community and Re-Invention as Keys to Revitalization of Detroit’s Neighborhoods
    Small Business Growth the Focus of “Breaking the Mold: The Entrepreneur’s Business Plan”Detroit’s Transformation Highlighted in “The Detroit Investment: The Smart Bet”Panelists: Moving Detroit Forward Requires Regional CollaborationLocal Entrepreneurs Discuss Resources Available to Detroit Small BusinessesLeaders Make Business Case for Detroit’s Diverse Industries
    In the News

    Tweets of the Day
    @crainsdetroit: #DPC14 speaker @candychang can teach #Detroit a lot, says Crain’s Publisher @Mkramercrain @BeforeIdiewall

    @DanaintheD: Panelists seem to agree the question is really, “Why NOT #Detroit?” Uber-supportive business community, engaged youth, innovation. #DPC14

    @BrittGuerriero: At Detroit Policy Conference: witnessing the launch of Startgrid –a collaborative platform for entrepreneurs. #DPC14

    @AllyMac11: Olympia Entertainment CEO Tom Wilson on the new @DetroitRedWings arena and the city’s future: Big projects beget other big projects. #DPC14

    @SkillmanFound: With support of residents. MT @Ingrid_Jacques: @pulte talking about how to tackle blight… He’s shown it’s possible in Brightmoor #DPC14

    @JGallagherFreep: New ideas for Detroit: Use vacant land as center for for hydroponic research, urban farming, says @MaggieDeSantis at#DPC14 #freep

    @Carolyn_Artman: “The privilege of a lifetime is being who you are.” – Joseph Campbell #DPC14#CandyChang
    Power Perspectives
    VIDEO – John Gallagher: The reinvention of government, the economy and vacant land are reasons to be realistically optimistic about Detroit’s transformation. For full video, click here.

    VIDEO – Adam Hollier: Attendees are encouraged to take advantage of daily opportunities to make a difference by focusing their passion and legacy on Detroit. For full video,click here.
    By in WDET
  • In the News: Detroit Mayor Mike Duggan’s State of the City speech

    If you missed the speech, listen here.

    Or watch DPTV’s coverage here.

    News Stories:

    Council Member Saunteel Jenkins like some of what she heard.

    “Strategic demolitions” to begin soon.

    Mayor Mike Duggan laid out what he said is a strong case that change can come quickly for Detroit in the Detroit Free Press.

    Mayor Mike Duggan vowed Wednesday that “change in Detroit is real” to fix broken city services, as reported by The Detroit News.

    AP tackled the mayor’s “strategic demolition” plan to tear down vacant and fire-damaged homes.

    Fox 2′s recap of the speech with video

    Channel Four’s coverage

    Channel 7′s report

    Channel 7 also filed a separate report about Duggan’s “D Insurance” proposal: a city-run auto insurance program to combat high rates for city resident.

    “Hello jobs, goodbye blight.” That’s not the Reuters headline. But here is their story about the speech.

    Editorials and Columns:

    Big hopes that Duggan can cure Detroit’s big problems” from the Detroit Free Press.

    Duggan projects action, optimism” from The Detroit News.

    Freep Columnist Rochelle Riley writes “The first thing you want to ask Mayor Mike Duggan, after his first State of the City address is: ‘You really think you can do all that stuff you just said?’ The second thing is: How can I help?”

  • In Orr’s Words: Excerpts from the EM’s Statement

    Detroit Emergency Manager Kevyn Orr’s office has released a statement about the city’s Plan of Adjustment and Disclosure Statement filed today in U.S. Bankruptcy Court.

    Here’s what the city considers the highlights of the plan:

    * Devotes $1.5 billion over 10 years to capital improvements, blight removal and equipment and technology upgrades.

    * During the next five years, up to $500 million of the $1.5 billion will go toward blight removal.

    * Proposes 20 percent payment to unsecured, non-retiree creditors in the form of new securities from the city and a pledge to increase that if the city’s finances improve.

    * Assumes $465 million from third-party donors and the Detroit Institute of Arts toward the pension funds over two decades, subject to city and pension fund agreement and conditions.

    * Includes Gov. Rick Snyder’s proposal to send $350 million of state money to Detroit over 20 years.

    * Allows that if police and fire pensioners agree to the plan and there is some settlement with the state, they could receive more than 90 percent of their pensions with the elimination of cost-of-living allowances. General retirees cold receive in excess of 70 percent of their pensions after elimination of cost of living allowances.

    * Moves current city employees into defined benefit plans.

    In other development, mediations continue toward agreements with key creditors in the process overseen by Chief U.S. District Judge Gerald Rosen. Talks are ongoing for the interest-rate, pension debt swaps agreement as well as the future of the Detroit Water and Sewerage Department.

  • Live blog: Plan of Adjustment


    We are running a live blog around the Plan of Adjustment.

    The Plan of Adjustment is the proposal of how Detroit will deal with its debts and operate its city government as it begins to pull itself out of bankruptcy. Throughout the day, this blog will post all things relevant and important to the plan of adjustment. It will include stories and posts from WDET, from the Detroit Journalism Cooperative partners and anything else related to the Plan of Adjustment that you need to know. Next Chapter Detroit will update regularly. …and if you see something they don’t have that they should, email it to NextChapter@WDET.org

    Friday, Feb. 21, 2014


    9:52 p.m.: The DIA is pleased with the plan. DIA Chairman Eugene Gargaro Jr. says it’s a “historic day.” But, nothing is saved it. The $820 million on the table in the DIA art/pension deal can only go toward the DIA art/pension deal. If an agreement can’t be made, Orr says, and groups go after that cash, it goes away. So, the risk to losing the money is still there. Read just a little bit more about the DIA liking the deal here.


    9:45 p.m.: Throughout the course of today, we conducted several interviews about the Plan of Adjustment. Here are some highlights. Click the link to get their full interviews.

    Laura Bartell, Wayne State University Law Professor: “There is nothing like this.” Get her full interview here.

    Sandy Baruah, C.E.O of the Detroit Regional Chamber: “Everyone here is taking a haircut.” Get his full interview here.

    Josh Elling, Executive Director at Jefferson East Inc.: “We hope that it would not just simply be demolitions, it also would look at saving structures that could be salvaged that have some great reuse value for historic structures in our vital neighborhoods.” Get his full interview here.

    Eric Lupher, Director of Local Affairs for Citizens Research Council of Michigan: “What I am seeing is a document written for lawyers by lawyers.” Get his full interview here.

    Ryan Plecha, an attorney representing retired city workers including police and fire: “With the ruling today, there is potentially more room for mediation.” Get his full interview here.


    9:04 p.m.: First use of the word “menagerie” today. But, seriously, sober column from the Freep’s Tom Walsh about the years ahead.

    Even if he persuades a menagerie of creditors to hop aboard and approve the plan of adjustment filed Friday, Orr’s blueprint for Detroit’s comeback does not assume any meaningful gains for the city’s population, property values or tax base in the next 10 years.


    8:54 p.m.: How many tickets have you paid to Detroit this year? Whatever the number, and whatever the cost, it wasn’t nearly enough, according to the 440-page disclosure doc released today — along with the Plan of Adjustment. (I’m sure you’ve heard of it. We’ve been talking about it non-stop.) Anyway, the plan says: “Meter rates and parking violation fines are underpriced in comparison with those of other large cities and frequently are considerably lower than parking rates charged by neighboring privately operated garages and lots.” Amy Haimerl from Crain’s Detroit Business pulled this parking tidbit out of the Tolkien-length document:

    But the garages and meters still aren’t pulling in what Orr thinks they should, so he is “exploring a potential monetization” of the seven parking garages and 3,404 parking meters owned by the Automobile Parking Fund, according to the bankruptcy disclosure statement. (The APF is an enterprise fund that technically owns the infrastructure and services the city’s parking bonds; the Parking Violations Bureau writes the tickets and enforces the laws.) “It could be a sale or it could be a lease,” said Orr’s spokesman, Bill Nowling. “The advantage if you lease it to someone who is the business, you benefit from the economies of scale. The cost of maintenance goes down. And right now, we have about half our our meters that don’t work, so that’s half of the money that’s not getting collected. A sale or lease increases the revenue stream to the city where it doesn’t exist now.”


    6:50  p.m.: The Freep’s Matt Helms breaks down some of the key points of the Plan of Adjustment in 104 seconds.


    6:47 p.m.: Here are a few interesting tidbits from the Freep’s Nathan Bomey. Very interesting. Is Interesting the right word?




    6:40 p.m.: The Detroit Free Press in its first editorial since the city’s Plan of Adjustment was filed came down squarely on the side of pensioners who stand to see a 34 percent cut if they’re in the General Retirement System and a more generous 10 percent if they’re retired from the police or fire departments. The editorial reads, in part:

    The average general system retiree’s pension is about $19,000 a year. A 26% cut would mean that meager income drops to $14,060 a year. That’s $1,171 a month.

    Of course, some of those pensioners may have other sources of income from social security, additional pension plans, their own savings or current employment. But the Freep’s point is not lost: it could be grim for many in the system. The Plan of Adjustment also assumes a successful sum of about $815 million resulting from the formula of foundation funding, a Detroit Institute of Arts pledge and Gov. Rick Snyder’s proposed $350 million (over 20 years) from the state. Which, the Freep correctly notes is a long way from a guarantee.

    If the state doesn’t come up with its share of the deal — $350 million — the whole thing falls apart. And cuts to pensions become that much worse.


    6:15 p.m.: It didn’t escape our notice when Mayor Mike Duggan and City Council President Brenda Jones released a joint statement today about the Plan of Adjustment. Mostly because they did it together, not because of anything surprising it said. Here’s the statement:

    The Plan of Adjustment is a sober reality check for our city. While some city services would receive much needed help, it is no surprise there will be difficult decisions ahead that affect residents, city workers and retirees. The plan proposal provides us a framework for how we can move forward in delivering our most vital services with limited resources. The Mayor’s office and City Council are committed to working together to achieve the goal of putting the city back on a solid financial foundation. Across every department of city government, we are working together to identify new revenue streams and cost efficiencies that will allow us to provide well-managed services that all Detroiters expect and deserve. Our city’s future depends on our ability to grow its tax base, maximize efficiencies and manage costs. That is why we are united in our commitment to delivering a level of service that allows our city to retain and attract residents, grow businesses and encourage other forms of investment.


    5:30 p.m.: The future organization and governance of the Detroit Water and Sewerage Department is far from finalized in the city’s Plan of Adjustment. There are hints for what Emergency Manager Kevyn Orr would like to see:  a regionalized authority, a renaming of it to the Great Lakes Water and Sewer Authority and some funding and structural provisions.

    Next Chapter Detroit heard from Nick Schroeck, director of the Transnational Environmental Law Clinic at Wayne State University Law School, who said environmental groups aren’t so worried about what’s in the plan of adjustment. But they are worried about what’s happening at the department, whatever it’s called. “We were mainly concerned about making sure that the facility is in compliance with their environmental permits, including controlling combined sewer overflows,” he says. “Regardless of what they do with the governance of the utility, creating a regional authority, they still need to make some significant investment in pollution controls.


    5:01 p.m.: We dug through Google news and found these outside stories. Required reading from the outside: Pensions Spared Worst Pain In Detroit Recovery Plan [Forbes]

    Orr’s plan is just that – a plan. Nothing is set in stone yet, and in fact, it’s likely to be picked apart and attacked in the coming months, especially by creditors who believe they’re getting the raw end of the deal. They will review the plan, and have a chance to vote on it, but U.S. Bankruptcy Judge Steven Rhodes is the ultimate decider. He could decide to “cram down” a plan, even if the creditors object.

    From Detroit Leaders, a Way Forward [New York Times]

    So far, agreement on major issues seems far off, or at least grounds for serious horse trading. Some creditors said they believed Detroit’s leaders were exaggerating the weakness of the municipal pension system as a way of inflating pension claims in the bankruptcy.

    Detroit Bankruptcy Plan Would Cut Some Bond Recoveries 80% [Bloomberg]

    Under the plan the city would fully repay water and sewer bonds, as well as other debt that is backed by collateral. Detroit water bonds maturing in July 2034 traded today at 94.5 cents on the dollar, the highest since July 17, the day before the city’s bankruptcy filing, according to data compiled by Bloomberg. Yesterday the debt exchanged hands 20 times, the most since July 23, the data show. The securities are insured by Assured Guaranty Municipal Corp.

    Detroit’s Reorganization Plan: The Good, the Bad and the Ugly [Policy Shop]

    The plan also attacks existing labor contracts. The damage to the fiscal health of Detroit did not happen all at once. Since the onset of the Great Recession, the city has repeatedly cut its payroll and operating budget by close to 40%. Public employees have already been “adjusted” severely. They have every right to claim that the plan of adjustment is unfair.

    4:42 p.m.: For you TV watchers, WXYZ breaks  it down. Check it out:



    4:34 p.m.: The Detroit Free Press listed Kevyn Orr’s five reasons for addressing blight in Detroit. Here’s one:

    ■ “Dramatically” improve national perception

    Read the other four here.


    4:18 p.m.: Kevyn Orr spoke for 45 minutes at his press conference earlier this afternoon about the release of the Plan of Adjustment. He was in Philly but a Detroit flag was flown behind him. We broke it down to 24 tweets. If you missed the presser and need a recap, go here.


    4:15 p.m.: “Let us be clear. The banks have screwed Detroit.” So writes our Detroit Journalism Cooperative partner, The Michigan Citizen, in a column titled “Blind Justice” that opines about the Plan of Adjustment and the process used to develop it.

    Josh Elling, executive director of Jefferson East, Inc.

    Josh Elling, executive director of Jefferson East, Inc.


    3:45 p.m.:Next Chapter Detroit just heard from Josh Elling, executive director of Jefferson East Inc., a nonprofit collaboration of existing community development corporations, other nonprofits, neighborhood associations and local businesses. He focused on the Plan of Adjustment’s provision to improve the city’s blight removal – an up to $500 million expenditure during the next few years.

    “While it’s unfortunate that pensioners would have to take reductions to their benefits, it’s vital that the city makes investments in blight removal and especially updating their systems. All too often at Jefferson East, we find we’re the ones that have to do the research on who owns which property, who is responsible for the blight because the city does not have a centralized database of ownership or condition,” he says. “It’s ridiculous that a nonprofit has to be the one to be responsible to find who owns the building that’s undergoing an arson investigation. Hopefully the funds freed up by bankruptcy will allow the city to make the investment in the systems that make that work much more easy and efficient.”


    3:04 p.m.: The city of Detroit filed its bankruptcy plan of adjustment today. What’s in the plan? WDET’s Craig Fahle and Quinn Klinefelter, and Next Chapter Detroit’s Sandra Svoboda provide details as they emerge from the plan, and speak with local leaders and lawyers about what the plan would do.

    SPECIAL COVERAGE: Detroit’s Bankruptcy Plan of Adjustment by The Craig Fahle Show


    2:59 p.m.: Some of us are eating a bit healthier despite the chaos:




    2:35 p.m.: There is $820 million on the table that is at risk to save the DIA’s art and help the pensions … but it’s at risk.


    1:57 p.m.: Here’s a livestream of Kevyn Orr in Philadelphia addressing Detroit. Should start shortly.

    freeplive on livestream.com. Broadcast Live Free


    1:50 p.m.: The Plan of Adjustment really threw a wrench into our breakfast and lunch plans. Coffee and almonds it is.  

    Screen Shot 2014-02-21 at 1.47.58 PM              

    1:42 p.m.:


    1:41 p.m.:


    1:29 p.m.:


    1:17 p.m.: Could Detroit be rid of its blight in three years?


    1:03 p.m.:  Here’s a recap of what we’ve learned in the last hour.

    Orr is offering an incentive to retirees for timely settlement. Detroit police/fire retirees would get 96 percent of pension while Detroit general retirees would see pensions cut an estimated 26 percent if timely settlement is reached, sted of 34 percent. (@RobertSnell_DN, Detroit News)

    As part of its restructuring plan, Detroit is seeking $300 million in new financing as it leaves bankruptcy to help it provide city services. (BrentSnavely, Detroit Free Press)

    Detroit would put $526.5 million into a trust over 20 years to provide health care for current/future city retirees and dependents. (@RobertSnell_DN, Detroit News)

    Only 30 percent of businesses operating in the city of Detroit have “valid licenses,” according to the disclosure statement. (@NathanBomey, Detroit Free Press)

    Under Detroit debt-cutting plan, city would stop providing cost of living adjustments for retirees for at least 10 years. (@RobertSnell_DN, Detroit News)

    The Detroit health care trust would be ruled by board of trustees. City will stop offering life insurance or death benefits to retirees. (@RobertSnell_DN, Detroit News)

    The city of Detroit had $246.5 million in uncollected property and income taxes and fees in 2011, according to the disclosure statement. (@NathanBomey, Detroit Free Press)        


    12:56 p.m.: Orr said what? Orr said this. We broke down his official statement:

    Devotes $1.5 billion over 10 years to capital improvements, blight removal and equipment and technology upgrades. 

    During the next five years, up to $500 million of the $1.5 billion will go toward blight removal.

    Proposes 20 percent payment to unsecured, non-retiree creditors in the form of new securities from the city and a pledge to increase that if the city’s finances improve.

    Assumes $465 million from third-party donors and the Detroit Institute of Arts toward the pension funds over two decades, subject to city and pension fund agreement and conditions.

    Includes Gov. Rick Snyder’s proposal to send $350 million of state money to Detroit over 20 years.

    Allows that if police and fire pensioners agree to the plan and there is some settlement with the state, they could receive more than 90 percent of their pensions with the elimination of cost-of-living allowances.

    General retirees cold receive in excess of 70 percent of their pensions after elimination of cost of living allowances.

    Moves current city employees into defined benefit plans.          


    12:30 p.m.: Required reading so far: Michigan Governor Rick Snyder and Democratic Governor Candidate Mark Schauer weigh in. [Freep]

    Schauer says: the proposal shows Snyder is “not on the side of Michigan seniors.” Snyder says: The plan is “a critical step forward as we look to resolve problems decades in the making,”

    The general city pensions are taking a bigger cut than police and fire. [Freep]

    Detroit city retirees in the general retirement system will face up to a 34% cut to monthly pensions. Police and fire retirees face up to a 10% cut, according to the proposed bankruptcy blueprint filed Friday morning.

    So where do we go from here? [Detroit News]

    Q. What’s next?

    A. U.S. Bankruptcy Judge Steven Rhodes will set a hearing on the adequacy of the disclosure statement and whether the average creditor, such as a retiree, can understand how he or she will be affected by the plan, said Laura Bartell, a bankruptcy law professor at Wayne State University.

    According to the Plan, it would protect DIA’s art… but it’s not a done deal. [Freep]

    While Orr’s plan codifies the fundamentals of a much-talked-about deal to prevent the forced sale of any masterpieces and spin off the city-owned museum into an independent nonprofit, several critical steps remain before a final settlement would guarantee the city-owned museum safe harbor in Detroit’s historic bankruptcy.

    $1.5 billion in capital improvements in the next 10 years, according to the plan [Detroit News]

    About $520 million will be dedicated to blight removal during the next six years, according to the disclosure statement. The city expects the infusion of money would result in demolitions ramping up to 400 to 450 a week from the current pace of 114 a week. “The City intends to focus its initial demolition efforts around schools and other areas identified by the Detroit Works Project and the Detroit Future City project,” according to the disclosure statement.


    12:24 p.m.: This is what Kevyn Orr’s office has to say:

    “There is still much work in front of all of us to continue the recovery from a decades-long downward spiral.  We must move swiftly to emerge from bankruptcy so that the financial distress harming the City can end,” Kevyn Orr said in a statement. “We maintain that the Plan provides the best path forward for all parties to resolve their respective issues and for Detroit to become once again a city in which people want to invest, live and work.”


    12:21 p.m.: So what does the Plan of Adjustment actually look like? This!

    Screen Shot 2014-02-21 at 11.19.27 AM    

    12:16 p.m.: Oakland County says this: “The City of Detroit had not given Oakland County any preliminary drafts of its plan of adjustment filed in U.S. Bankruptcy Court today; we just obtained a copy of our own. It is premature for Oakland County to comment on any section of the plan of adjustment until we have taken the time to evaluate its contents thoroughly.”      


    12:04 p.m.:  It’s been about an hour now. Here’s another recap:

    The city of Detroit is still pursuing bankruptcy financing with a hope of securing $20 million per month for investments. (@NathanBomey, Detroit Free Press)

    City anticipates investing $1.5 billion over 10 years for improvements, including reducing crime, fighting blight and turning on lights. (@haimerlad, Crain’s Detroit Business)

    Under the plan, Detroit says police and fire retirees will retain 90% of pensions while general retirees retain 70% of pensions. (BrentSnavely, Detroit Free Press)

    The city of Detroit had $246.5 million in uncollected property and income taxes and fees in 2011, according to the disclosure statement. (@NathanBomey, Detroit Free Press)

    Only 30% of businesses operating in the city of Detroit have “valid licenses,” according to the disclosure statement. (@NathanBomey, Detroit Free Press)

    Plan of adjustment would have the pensions use an estimated 6% rate or return instead of the 8% they had been using for calculations. (@haimerlad, Crain’s Detroit Business)

    Plan offers carrot to police and fire pensioners: Vote for plan early, and we’ll add 4%, so you would only lose 6% value on your pension. (@haimerlad, Crain’s Detroit Business)          


    12:00 p.m.:


    11:55 a.m.:  We talked to Alex J. Pollock from the American Enterprise Institute: “It’s only one more complicated step in a highly contentious, precedent-setting, politically charged dispute with a long way yet to go.  All the various lawyers involved will do fine as arguing about how to divide up the inevitable losses continues.”


    11:49 a.m.:  So what exactly is the Plan of Adjustment and this disclosure statement we’re talking about? Here are the definitions.


    11:47 a.m.:  Governor Rick Snyder chimes in. Says:

    “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.”


    11:46 a.m.:  Unions weigh in with strong words:

    And also this:


    11: 42 a.m.: Blight gets a nod to the tune of $520.3 million over six fiscal years:


    11:25 a.m.: It’s been live for 20 minutes. Here’s what we know so far (thanks to Twitter):

    Kevyn Orr on debt-cutting plan: “Still much work in front of all of us 2 continue recovery from decades-long downward spiral.” (@RobertSnell_DN, Detroit News)

    Also Orr: “We must move swiftly to emerge from bankruptcy so that the financial distress harming the city can end.” (@RobertSnell_DN, Detroit News)

    Detroit’s police and fire pension system would receive 20.8-29.8 percent of their unfunded claims, general pension board would receive 27.5-33.3 percent. (@NathanBomey, Detroit Free Press)

    Detroit Plan of Adjustment calls for COP holders to get 40 percent of principal but COP Swap claims “to be determined shortly” (@ChadHalcom)

    The $100 million expected from the DIA is in the plan. To be paid out over 20 years. (@haimerlad, Crain’s Detroit Business)

    City of Detroit proposes 20 percent recovery for limited-tax and unlimited-tax general obligation bondholders. (@NathanBomey, Detroit Free Press)

    The city of Detroit will not seek to terminate its two pension boards, according to plan of adjustment. (@NathanBomey, Detroit Free Press)

    Detroit police and fire retirees would take a 10 percent pension cut under city’s debt-cutting pension plan (@RobertSnell_DN, Detroit News)

    Detroit general retirees would take a 34 percent pension cut under city’s plan of adjustment (@RobertSnell_DN, Detroit News)


    11:23 a.m.:


    11:12 a.m.:


    11:11 a.m.:


    11:05 a.m.: The Plan of Adjustment is here… all 120 pages of it. Read it:

    Detroit PoA 2.21.14


    10:58 a.m.:


    10:48 a.m.: Was Detroit even eligible to file for bankruptcy? Today the 6th Circuit Court of Appeals agreed to answer that question, raised by a group of pensioners. The panel in Cincinnati said it would hear the group’s appeal which is a challenge to the December decision from Bankruptcy Judge Steven Rhodes who ruled Detroit was authorized to pursue its landmark bankruptcy case. If you really want to read the 30-page appeal, here it is.


    10:22 a.m.: Kevyn Orr won’t be in town today.

    10:00 a.m.: Let’s sum up the stories so far this morning around Detroit’s bankruptcy — “Detroit expected to file Plan of Adjustment today”. We’re in the same boat and waiting patiently waiting for the Plan of Adjustment. It hasn’t dropped yet. In the meantime? What to expect? Amy Haimerl from Crain’s Detroit Business has a lengthy piece on exactly there. Here’s a small piece of it:

    In addition, we’ll find out exactly how deep of a cut Orr expects the retirees to take on their pensions. To date, everything has been speculation. Friday, we find out how effective The Grand Bargain – the deal between the foundations, the state and the Detroit Institute of Arts to raise about $800 million – has been at protecting  pensioners and the city-owned art collection.


    By in Bankruptcy Court, Stick
  • Five Bankruptcy Bits for Monday Morning

    As we anticipate the release of the city’s Plan of Adjustment in the coming week, here are five stories from the weekend that Next Chapter Detroit doesn’t want readers to miss:

    Time to see whether Detroit’s big bet on shedding its debt pays off

    In advance of the city’s restructuring plan, expected in court this week, Stephen Henderson, editorial page editor at the Detroit Free Press, predicts: “If Detroit’s emergency manager has his way, the city will walk from nearly 80% of its debt to banks and insurers. Most important, he will treat bondholders, including those whose debt has never been subject to principal write-downs in a bankruptcy, the same as every other lender.”

    Patrolling a Bruised City

    The New York Times “Vocation” feature talked with a Detroit police officer about what it’s like to patrol the streets of the bankrupt city and live with the uncertainty of the city’s future finances.

    The Looting of Detroit’s Pensions

    The American Enterprise Institute weighs in on the history and future of Detroit’s pension systems and concludes, in part: “It’s hard to know what should be done about Detroit’s pensioners, many of whom would truly be impoverished if subjected to major benefit cuts. But the conventional morality play painting Detroit’s employees as mere bystanders to the city’s fiscal bankruptcy is clearly wrong.” AEI will host a panel discussion in Washington D.C. Tuesday afternoon titled “The Detroit Bankruptcy: Conflicts and implications” that will stream online. More information at: www.aei.org/events/2014/02/18/the-detroit-bankruptcy-conflicts-and-implications/

    Q & A: What is a Bankruptcy Mediator’ Role?

    The Wall Street Journal provides a succinct explanation of what U.S. District Court Chief Judge Gerald Rosen is doing behind the scenes of the bankruptcy negotiations.

    Bankruptcy and Blight: The technology behind the new authority

    Have you wondered exactly how the Detroit Blight Authority is mapping all the city’s properties? Crain’s Detroit Business profiles Loveland Technologies Inc., the new company with new technology … and a new approach.

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org