User:St8fan/sandbox

The Grand Bargain and the End of Bankruptcy

See also: Detroit Institute of Arts § Impact of Detroit Bankruptcy on the Museum

One of the biggest issues facing litigators of Detroit's bankruptcy was which assets belong to the city outright and those that were available to creditors in order to satisfy liabilities. Nowhere did this question loom larger than the fate of the Detroit Institute of Arts. The DIA holds 66,000 valuable pieces; however, only five percent of this collection was bought with city money. Judge Rhodes had to decide if the other 95% of this collection could be be monetized in order to satisfy the claims of the bankruptcy creditors. In particular interest, was whether the art collection would be needed to satisfy the pension claims of its retirees. http://dealbook.nytimes.com/2014/05/12/pensions-vs-art-in-detroits-bankruptcy/

Chief Judge for the Eastern District Michigan Gerald Rosen, who had taken on the role chief mediator, and Rhodes sought quick end to the bankruptcy fearing a process that could take years to resolve. On November 5th, 2013 Rosen convened a meeting at the federal courthouse in Detroit with the leaders of some of the largest foundations in the country. Among those in attendance were the Ford, Knight and Mott Foundations. It was here that Rosen laid out his plan that would become know as the grand bargain. Rosen's plan sought commitments for over $800 million over the next 20 years from foundations, private donors, the DIA, the state that would be used to shore up underfunded pensions. This would save the DIA from selling it's art, the DIA would become a private organization, releasing it from city ownership protecting its collection forever.

When asked why they donated Darren Walker, president of the Ford Foundation said "If you don't have great cities, you won't have great nations," he said. "Detroit is a metaphor for America, for America's challenges and America's opportunities. It is a hothouse for new innovation, for ingenuity and risk taking. That doesn't happen in a lot of American cities. We need to be in Detroit because of that." In total foundations would commit $366 million over 20 years to the Foundation for Detroit's Future the non-profit set up to act as the fiduciary for the funds.

On December 22 Rosen rejected a $230 million settlement negotiated between the city and Bank of America Merrill Lynch and UBS. The city owed the banks $290 million due the an investment by former mayor Kwame Kilpatrick. The city and banks would settle for on the 24th for $185 million in the Rosen negotiated deal. But Rhodes would stun those following the proceedings, in what would be known as the Christmas Eve Massacre, when three weeks later he would reject the settlement as being "just too high a price to pay". After Orr threatened to sue the two banks, they would end up settling for $85 million.By January 2014 the city would reach a deal with some of its toughest opponents in three bond insurers to whom they owed $388 million on he city's general obilagtion bonds by 74%.

The DIA would initially offer $50 million toward the grand bargain, however the city, governor and others pushing for the deal viewed that as too low in order to get the state legislature on board. Ultimately, the DIA would agree to contribute $100 million.

In May 2014, legislation giving Detroit's retirement systems a $194.8 million lump sum as part the state's $350 million commitment was introduced. As part of the deal if pensioners accepted they they would not be able to sue the state over pension reductions, this was seen as a key piece to getting support from the Republican majority legislature. Some Republicans like Speaker of the House Jase Bolger wanted unions to make contributions to help in the Detroit settlement. Governor Snyder called the legislative package an opportunity to change the direction of Detroit.. The state Senate would follow on June 3 and soon after . Upon passage, the Detroit News called the final legislative package a "grand piece of work," and the Detroit Free Press opined that the deal showed lawmakers "get it.". In total Judge Rosen's plan was able to raise 816 million from the various entities.

Early negotiations the retirees saw them being threatened with in cuts of 50%. However, with the grand bargain those cuts were reduced to a 4.5% with no cost living increases. Over the spring and summer of 2014 more than two-thirds of Detroit retirees voted in favor of the deal.

On September 10, Detroit reached a deal with three Michigan counties over regional water and sewer services that could eliminate one roadblock to federal court approval of the city's plan to adjust its debt and exit bankruptcy. The deal with Oakland, Wayne and Macomb counties created the Great Lakes Water Authority, a new regional water and sewer authority, but allows Detroit to maintain control of its local system. The deal was crucial to adjusting the city's $18 billion of debt and exit the biggest-ever municipal bankruptcy.

Detroit would reach deals with of more of its creditors throughout the fall. In September it would come to terms with bond insurer Syncora that had $400 million claim, they would receive $25 million in cash and bonds. They also received a 20 year lease extension their operation of the Detroit-Windsor Tunnel and 30 year lease of the underground garage at Grand Circus Park.

On October 16 lawyers for the city and Financial Guaranty Insurance Company (FGIC), a bond insurer with a $1 billion claim, disclosed in court that they had reached a deal to settle the company's claims. Under the deal, the city and state would pay for the demolition of the city-owned Joe Louis Arena once the Red Wings move into the new arena. After demolition, FGIC would receive the arena site and an adjacent parking lot, giving the company nearly 9 acres (3.6 ha) for redevelopment.

On November 7, 2014 Judge Rhodes accepted the city's plan of adjustment, 17 months after the city had filed bankruptcy a far shorter time frame that had been predicted based on other municipal bankruptcies. At the hearing Rhodes remarked, "We have used the phrase the grand bargain to describe the group of agreements that will fix the city's pension problem. That description is entirely fitting. In our nation, we join together in the promise and in the ideal of a much grander bargain. It is the bargain by which we interact with each other and with our government, all for the common good. That grander bargain, enshrined in our Constitution, is democracy. It is now time to restore democracy to the people of the City of Detroit".

On December 10, the ownership of DIA transferred to the non-profit DIA, Inc. The following day Detroit exited bankruptcy protection with finances returned the control of city subject to oversight by the Detroit Financial Review Commission for at least three years. The Commission

The Renaissance CenterThome of the world headquarters of General Motors and the tallest hotel in the Western Hemisphere, sits along the International Riverfront.

In 1993 Young retired as Detroit's longest serving mayor, deciding not to seek a sixth term. That year the city elected Dennis Archer, a former Michigan Supreme Court justice. Archer prioritized downtown development and easing tensions with Detroit's suburban neighbors. A referendum to allow casino gambling in the city passed in 1996; several temporary casino facilities opened in 1999, and permanent downtown casinos with hotels opened in 2007–08..The city's riverfrontof redevelopment, following successful examples of other older industrial cities. In 2001, the first portion of the International Riverfront was completed as a part of the city's 300th anniversary celebration, with miles of parks and associated landscaping completed in succeeding years.

The city would see more long vacant building like Book Cadillac Hotel and the Fort Shelby Hotel. However city would struggle to

The 2008 financial crisis however would slow this progress as projects were cancelled or delayed. The crisis would also residential neighborhoods 

.

21st century

The early 2000's would see the beginnings of a revival for downtown Detroit. One the largest projects was the creation Campus Martius, a reconfiguration of downtown's main intersection as a new park. The plan for the park was announced in 2001, it was opened to the public in 2004. The park has been cited as one of the best public spaces in the United States.. As part of that project computer company Compuware agreed to build a new headquarter at the site of the north of the park and relocating 4,000 employees from suburban Farmington Hills

The development did little to stem Detroit's protracted decline. has resulted in severe urban decay and thousands of empty buildings around the city. sparsely populated that municipal services. Solutions suck as removing street lighting from large portions of the city; and encouraging the small population in certain areas to move to more populated locations have been proposed.but a found very little public support. Roughly half of the owners of Detroit's 305,000 properties failed to pay their 2011 tax bills, resulting in about $246 million in taxes and fees going uncollected, nearly half of which was due to Detroit; the rest of the money would have been earmarked for Wayne County, Detroit Public Schools, and the library system.

Westin Book-Cadillac Hotel during extensive restoration. The hotel tower reopened in 2008.

In September 2008, Mayor Kwame Kilpatrick (who had served for six years) resigned following felony convictions. In 2013, Kilpatrick was convicted on 24 federal felony counts, including mail fraud, wire fraud, and racketeering, and was sentenced to 28 years in federal prison. The former mayor's activities cost the city an estimated $20 million.

Bankrupt and the Grand Bargain

The city's financial crisis resulted in the state of Michigan taking over administrative control of its government. The state governor declared a financial emergency in March 2013, appointing Kevyn Orr as emergency manager. On July 18, 2013, Detroit became the largest U.S. city to file for bankruptcy. It was declared bankrupt by U.S. District Court on December 3, 2013, in light of the city's $18.5 billion debt and its inability to fully repay its thousands of creditors..

One the biggest questions pensions and the fate the then city owned Detroit Institute of Arts and whether Orr would use the museum's asset to pay of the city's debut

On November 7, 2014 the city's plan for exiting bankruptcy was approved. The following month on December 11 the city officially exited bankruptcy. The plan allowed the city to eliminate $7 billion in debt and invest $1.7 billion into improved city services.

One of the largest post bankruptcy efforts to improve city services has been work to fix the city's broken street lighting system. At one time it was estimated that 40% of lights were not working. The plan calls for replacing outdated high pressure sodium lights with 65,000 LED lights. Construction began in late 2014 and by the end of 2015 around 60,000 lights have been replaced. Work is scheduled to be complete by the end of 2016.

The 2010's Since 2006, $9 billion has been invested in downtown and surrounding neighborhoods; $5.2 billion of that has come in 2013 and 2014. Construction activity, particularly rehabilitation of historic downtown buildings, has increased markedly. The number of vacant downtown buildings has dropped from nearly 50 to around 13. the David Broderick Tower; and the David Whitney Building.

Little Caesars Arena a new home for the Detroit Red Wings, with attached residential, hotel, and retail use is under construction set to open in fall 2017. The plans for the project call for mixed-use residential on the blocks

In the 2010s, several initiatives were taken by Detroit's citizens and new inhabitants to improve the cityscape by renovating and revitalising neighbourhoods. Such include the Motor City Blight Busters and various urban gardening movements.

The well-known symbol of the city's decade-long demise, the Michigan Central Station, is renovated with new windows, elevators and facilities since 2015. Several other landmark buildings were fully renovated and transformed into condominiums, hotels, offices or for cultural uses. Detroit is mentioned as a city of carination and renaissance.