It’s an ambitious and unprecedented plan: $365 million from private foundations, $100 million raised from the Detroit Institute of Arts, $350 million from the state of Michigan, paid over two decades in $17.5 million annual appropriations. The funding is included in Detroit Emergency Manager Kevyn Orr’s proposed Plan of Adjustment, filed with the bankruptcy court last month, and seeks to ensure some funding for pensions so that the museum’s collection isn’t sold to pay retirees.
The $815 million deal is called “the grand bargain” and, as The Detroit News columnist Daniel Howes writes today,
It would cushion a harsh blow to city pensioners even as it would protect the DIA’s envied collection from the predations of creditors.
One of the deal’s architects is Chief U.S. District Judge Gerald Rosen who is acting as mediator in the bankruptcy case.
But it’s far from a done deal, and as the city’s bankruptcy case progresses, Orr is needing to secure terms of the deal, Howes writes. So is Gov. Snyder, who first proposed the state contribution in his budget presentation to the legislature’s Joint Appropriations Committee in February but has largely gone silent, at least publicly, on the plan.
Howes says the deal needs to be getting done in Lansing before bankruptcy proceedings get much further:
Put another way: any meaningful threat to the DIA fund and whether it can be used to bolster city pensions emanates from the state capitol, not bookish foundation heads or timorous board members unnerved by unhappy financial heavyweights in New York or the confrontation of a bankruptcy process unspooling with predictable rancor and litigation.
Judge Rosen’s audacious gambit to tie a DIA rescue to a public-private plan to bolster city pensions is still very much alive. But it won’t last in perpetuity because it can’t — a fact the city’s unions, pension funds and retirees ignore at their peril.