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“Motor City” goes BUST

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Kiwithrottlejockey
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« on: July 19, 2013, 11:17:27 pm »


From the Los Angeles Times....

Detroit declares bankruptcy, with $18 billion in debts

The city files for Chapter 9 four months after the appointment of an emergency
financial manager. "Let me be blunt: Detroit's broke," says Michigan's governor.


By TINA SUSMAN and MATT PEARCE | 6:06PM - Thursday, July 18, 2013

The global headquarters of General Motors is visible from one of Detroit's many abandoned lots. The city declared bankruptcy Thursday. — Photo: Jeff Kowalsky/Bloomberg.
The global headquarters of General Motors is visible from one of Detroit's many abandoned lots.
The city declared bankruptcy Thursday. — Photo: Jeff Kowalsky/Bloomberg.


NEW YORK — Detroit on Thursday became the largest American city to declare bankruptcy, officially succumbing to job losses in the auto industry, decades of population flight, and the collapse of revenue to cover everything from policing to street lighting.

"Let me be blunt: Detroit's broke," Michigan Governor Rick Snyder said as he recited a litany of ills that helped steer the decision and that made Detroit — once a gleaming example of American industry — into an urban wreck with debts of $18 billion.

The announcement came four months after Snyder named Washington bankruptcy expert Kevyn Orr — who represented Chrysler during its successful restructuring — as Detroit's emergency financial manager to try to heave Detroit out of its fiscal morass.

Orr at the time insisted that the city could "rise from the ashes."

But the destruction proved too great. Two days ago, Orr sent a letter to the governor saying he saw no alternative to filing for Chapter 9, blaming decades of fiscal mismanagement, plummeting population, decaying infrastructure and failing services.

"Detroit today is a shell of the thriving metropolis that it once was," wrote Orr, a summation that few who have witnessed the city's decline could challenge.

Snyder outlined the failures Thursday: Detroit has been among the nation's 10 most violent cities for 24 of the last 27 years. Average police response time is 58 minutes, compared to a national average of 11 minutes. And when it comes to crime, only 8.7% of cases are cleared.

At its peak, Detroit was the nation's fourth-largest city, with more than 1.8 million people. Population losses began in the 1960s with migration to the suburbs, picking up after a bloody race riot in 1967. The exodus gained further momentum as the automobile manufacturing industry, once the path to the middle class for an aspiring workforce, shrank.

Now, Detroit has about 700,000 people and thousands of abandoned buildings with acres of neglected lots. Thirty-eight cents of every city dollar goes to debt repayment and unfunded liabilities, the governor said.

By 2017, Snyder said, that would jump to 65 cents per dollar.

"That's not a sustainable situation," said the governor, who called Chapter 9 "the opportunity for a fresh start," not just for Detroit but for Michigan, a state whose fortunes are tied to those of its biggest city.

"For Michigan to be a great state, Detroit needs to be a great city," he said.

Detroit's action displaced Stockton, California, as the largest city to go bankrupt. San Bernardino also filed bankruptcy last August.

In Detroit, city and state officials greeted the decision with despair and resignation, but also a bit of hope, with many saying it had been expected.

"The best way to solve our PR problem is to fix the damn problem," said Sandy Baruah, chief executive of the Detroit Regional Chamber, who called the bankruptcy "without a doubt" the best way forward.

For the last three years, Baruah has seen signs of life shooting up around him: His office building in downtown Detroit has gone from half-empty to full. The walk to Comerica Park, three-quarters of a mile away, is filled with new businesses, new restaurants, and new faces.

But Detroit has still been held back by its failure to capture foreign investors, scared away by the city's ills.

"The first step in solving a problem is recognizing that you have a problem, and the second step is actually doing something about it," Baruah said.

In Washington, Senator Carl Levin (Democrat-Michigan), a Detroit resident, noted that the city was known for its grit and resilience.

"I know deep in my heart that the people of Detroit will face this latest challenge with the same determination that we have always shown," Levin said.

Senator Debbie Stabenow, his fellow Democrat from Michigan, expressed a similar sentiment. "This is certainly one of the greatest challenges Detroit has faced in its long history," she said, "but the people of Michigan's largest city have met and overcome tremendous challenges in the past. There are so many positive things happening across the city, and I have every confidence that Detroit will emerge even stronger and more resilient."

Detroit has long been known as Motor City, but automobile production has been leaving the area for decades. U.S. auto companies, like all automakers worldwide, have increasingly become global operations.

During the recession, GM and Chrysler were bailed out by the U.S. government and saved from bankruptcy. Their sales have rebounded strongly, but the automakers have in the process become much leaner operations.

Only the reopening of factories and other facilities will help the city reverse its slide, said Chrysler Chief Executive Sergio Marchionne, when he discussed the automaker reinvestment in the region in March.

"You've got to invest in plants and businesses in the area to effectively cause the repopulation of your residential areas, and people that live close to the plant live here, and effectively start rebuilding this city as a viable community. … The more people who do this, the better Detroit ultimately will be," Marchionne said.

Detroit's woes extend beyond the auto industry's exodus, and the city hasn't been helped much by some of its recent civic leaders.

Between 2002 and 2008, then-Mayor Kwame Kilpatrick ran what prosecutors later described as a "private profit machine" out of City Hall by taking bribes and rigging millions of dollars of contracts for a friend's excavating company. One fundraiser, Emma Bell, testified that she gave Kilpatrick more than $200,000 in political donations, pulling cash from her bra during private meetings. Internal Revenue Service agents said Kilpatrick had managed to spend $840,000 beyond his mayoral salary.

In March, Kilpatrick was convicted of 24 charges, including racketeering conspiracy; he awaits sentencing.

The current mayor, David Bing, who was elected in 2009, began tearing down abandoned buildings as part of a revitalization effort for the city, but he lamented what he called a sense of "entitlement" among some residents who he said were unwilling to accept painful moves, such as leaving homes in abandoned neighborhoods and helping repopulate other parts of Detroit.

Bing has announced that he will not seek re-election when his term expires at the end of 2013.


L.A. Times staff writers Brian Thevenot in Los Angeles and Richard Simon in Washington contributed to this report.

http://www.latimes.com/news/nationworld/nation/la-na-0719-detroit-bankruptcy-20130719,0,2569644,full.story
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« Reply #1 on: July 20, 2013, 05:43:59 pm »


From the Los Angeles Times....

Detroit bankruptcy fuels wider battle over pensions

Detroit's bankruptcy filing, along with two in California, enters into unchartered legal
territory in the battle between public pension funds and financially ailing governments.


By RICHARD SIMON and ABBY SEWELL | 6:38PM - Friday, July 19, 2013

Detroit's bankruptcy filing raises legal questions for which there is no precedent, analysts say. — Photo: Paul Sancya/Associated Press.
Detroit's bankruptcy filing raises legal questions for which there is no precedent, analysts say. — Photo: Paul Sancya/Associated Press.

WASHINGTON — Detroit's historic bankruptcy filing — already thrown into turmoil by a Michigan court Friday — has ignited a largely uncharted legal front in the closely watched battle between public employee unions and governments across the country struggling to meet costly pension obligations.

In Detroit, city pension funds sued Republican Governor Rick Snyder and the city's emergency manager, saying they could not use bankruptcy to reduce the pensions of about 30,000 current and retired workers to help ease the city's $18-billion debt. They contended that the pensions were protected by the state constitution.

The uncertainties ahead came into focus Friday when a state judge ruled in favor of the pension fund suits, saying that the bankruptcy filing the day before had violated the Michigan Constitution. The governor lacks the power to "diminish or impair pension benefits," according to the ruling by Ingham County Circuit Judge Rosemarie Aquilina.

The state attorney general's office filed an emergency appeal with the Michigan Court of Appeals late Friday.

The first salvo in the legal battle has public employee unions and pension funds, including CalPERS, on edge.

"All bets are off in bankruptcy," said Jack Dean of the Orange County-based PensionTsunami.com. "That's why the unions are so panicked. And CalPERS is panicked. Because they don't know what's going to happen."

In Sacramento, Amy Norris, a spokeswoman for CalPERS, formally known as the California Public Employees' Retirement System, said Friday, "We will be watching what happens in Detroit." So are the cities of Stockton and San Bernardino, which have also filed for bankruptcy protection.

Detroit unions cheered the court ruling.

"There is too much at stake to play political games with the hard-earned retirement security of Detroit's public workers," said Lee Saunders, president of the American Federation of State, County and Municipal Employees.

The Detroit unions said the city had failed to negotiate in good faith. And while pension fund officials contend the state constitution protects pensions, others argue that federal bankruptcy law trumps state law.

In addition, current and retired public employees could find themselves competing with municipal bondholders for payment.

"Bondholders have been pretty immune until now," said Richard Lehmann, president of Income Securities Advisors, a bond advisory and research firm in Miami Lakes, Florida. "The question here is what prevails — the guarantee to bondholders or the guarantee to pensioners."

The Detroit battle comes after a number of governors have gone to war with unions to limit public employees' collective bargaining rights or to require government workers to pay more for healthcare and pensions to ease state fiscal woes.

In fiscal 2010, the gap nationwide between states' assets and their obligations for public-sector retirement benefits was $1.38 trillion, up nearly 9% from 2009, according to the most recent figures available from the Pew Charitable Trusts. Of that, $757 billion was for pension promises, and $627 billion was for retiree healthcare.

In Detroit the underfunded pension liability has been estimated to be $3.5 billion.

Experts say the Detroit battle could ultimately reach the U.S. Supreme Court.

"Detroit could be a step in destroying public pensions, though the law says you can't cut benefits," said John Logan, director of the labor studies program at San Francisco State University. "If they a find a way around that, it opens Pandora's box, and the battle on whether to dump bank loans or dump pensions may go all the way to the Supreme Court."

In California, CalPERS contends that its retirement system is "an arm of the state … different than other creditors."

Still, CalPERS chief counsel Peter Mixon expressed concern in a recent interview that municipalities could "seize on a ‘bankruptcy solution’ if they felt like the state laws ... could be avoided."

Stockton has continued making its payments to CalPERS since filing for bankruptcy protection in June 2012, despite the objections of bond investors who argued that the city should have sought concessions from the pension fund beforehand.

San Bernardino stopped paying into CalPERS after it filed for bankruptcy protection in August, faced by a $46-million general fund deficit. The city started making its payments again this month, but still owes $14.2 million from last year, according to Norris. It remains unclear what the ultimate impact on the city's retirees will be.

Public employee pension funds have argued that cities should not be allowed to treat their pensioners like other creditors while in bankruptcy.

The courts have yet to decide the issue. San Bernardino is still trying to make its argument to the court that it is eligible for bankruptcy. In Stockton, the question of pensions will probably become a key piece of the proceedings as the city moves forward with its plan in September.

"Truth be told, we know nothing," said Karol Denniston, a San Francisco-based attorney who specializes in municipal bankruptcy. "We know that under bankruptcy code there's an ability to impair creditors, but whether or not that extends to pension obligations — there is no answer."


Simon reported from Washington and Sewell from Los Angeles. L.A. Times staff writers Ken Bensinger and Cindy Carcamo contributed to this report.

http://www.latimes.com/news/nationworld/nation/la-na-0720-detroit-pensions-20130720,0,4649529.story
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« Reply #2 on: July 21, 2013, 09:15:17 am »

Detroit: a city destroyed by Union GREED.
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« Reply #3 on: July 21, 2013, 09:24:12 am »

Detroit: a city destroyed by Union GREED.


What a load of crap....the GREED of capitalists destroyed Detroit.

However, I guess we've established one thing....that you would be happy to be the humble, grovelling servant and take whatever crumbs your employer offered you.

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« Reply #4 on: July 21, 2013, 09:55:20 am »

Detroit: a city destroyed by Union GREED.


What a load of crap....the GREED of capitalists destroyed Detroit.

However, I guess we've established one thing....that you would be happy to be the humble, grovelling servant and take whatever crumbs your employer offered you.



Perhaps you should take your rosy coloured glasses off and have a read of the inflexibility of the public sector unions in Detroit (let alone the overly generous auto manufacturers union demands and refusals to back down.)

At least when unions get too greedy in the private sector the company collapses or goes where unions are less greedy. When it is public sector unions they can extort the public purse, but as Detroit and perhaps the USA has learned even the public purse has limits.
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« Reply #5 on: July 24, 2013, 06:29:13 pm »


What a load of total shit.

MANAGEMENT are the greedy bastards, not the workers.....just take a look at the salary levels and retirement scheme funds of the managers to see who REALLY stuffed-up industries in Detroit. Unions are merely acting of bargaining agents for the workers they represent. I guess the alternative could be employment lawyers, but I somehow think employers would find it extremely unpalatable to have to deal with thousands of individual lawyers than a handful of unions.

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« Reply #6 on: July 24, 2013, 06:29:44 pm »


From the Los Angeles Times....

Detroit's bankruptcy may lead to more chaos

Some hope bankruptcy will get Detroit on the road to recovery. But the city
remains broken, and its public employees now worry for their future.


By ALANA SEMUELS | 8:03PM - Friday, July 19, 2013

Downtown Detroit in 2008. Five years later, the city is seeking bankruptcy protection, and its problems have only gotten worse. — Photo: Carlos Osorio/Associated Press.
Downtown Detroit in 2008. Five years later, the city is seeking bankruptcy protection, and its problems have only gotten worse.
 — Photo: Carlos Osorio/Associated Press.


DETROIT — Jose Covarrubias has tried to keep his small house on a semi-deserted street in southwest Detroit a bastion of calm, but it has gotten more difficult every day.

He installed a chain-link fence with a lock to prevent wandering vagrants from using his yard as a short cut; someone kicked it down. He threatened to call the police on a stranger who showed up with a ladder and tried to steal his antenna; the thief laughed in his face, reminding him that police rarely have time to respond to calls that don't involve dead bodies.

He woke up Sunday to what's become a typical scene in Detroit these days — arsonists had set the house on the corner on fire, and it burned a bright, hot yellow.

"We laugh and say, ‘It's Detroit’ — but it's hard," he said, standing outside his house, which, with its pots of flowers and coat of fresh paint, stands out on a block of boarded-up and burned-out homes. "The cops don't come, and you can't leave your house without thinking someone will steal something."

For many in Detroit, Thursday's bankruptcy filing raises questions about whether things could now get even worse — or whether a court-ordered financial overhaul in what was once America's fourth-largest city could finally reverse the city's long decline.

A Michigan judge ruled Friday that the bankruptcy violated the state constitution and ordered the city to withdraw its petition, a decision that was immediately appealed by the state attorney general.

City unions expressed dismay at the bankruptcy, accusing the city's emergency manager, Kevyn Orr, of rushing to file before negotiations over pension liabilities were completed. The White House weighed in, with Press Secretary Jay Carney saying Detroit's bankruptcy would be worked out between the city's leaders and creditors, but that the federal government would look for ways to help.

"We're paying close attention to the challenges that Detroit is facing," he said.

The bankruptcy filing is especially stressful for city employees, who are waiting to hear whether the city could take away their pensions. Police officers and firefighters do not pay into Social Security, so if the city seizes their pensions in bankruptcy, many say they'd be left with little money for retirement.

Even without the bankruptcy filing, public employees are stretched thin. Detroit has the highest rate of violent crime of any city with more than 200,000 people. The average police response time was 58 minutes this year, compared with an average of 11 minutes nationally. The city has about 11,000 fires a year, though the Fire Department "lacks equipment ordinarily regarded as standard," according to the city's proposal for creditors, released in June.

"See that one? The nozzle doesn't spray water," said fireman Thomas Kaiser, pointing to one of the two fire engines in the firehouse in the southwest district where he works. There's no money to fix the truck. In fact, money is so short that many onetime officers in the Fire Department have been demoted and had their pay cut, as less senior firemen lose their jobs.

"We're the busiest fire department in the world, but when was the last time we had a raise? Twelve years?" Kaiser asks. "We risk our lives and they're changing the rules halfway through."

He'd already been out on two calls in the first five hours of his 24-hour shift. In many city fire departments, firefighters are sent home after two calls. The city, which measures 139 square miles, is so spread out that this ladder company once traveled 30 minutes to get to a fire.

It is not even the shortest-staffed emergency department in the city. The firefighters hear calls come in over the scanner, begging for ambulances for people passed out on the street, or for car crashes on the freeway, only to hear in response that there are no paramedic services available. In the first quarter of the year, only 10 to 14 of the city's 36 ambulances were in service.

"You hear it all the time," said Denny Dooley, another fireman.

The slow response times and high crime rates have escalated Detroit's troubles. More and more families have fled the city, eroding property tax revenues and leaving more homes empty to be either stripped for parts or set on fire. About 40% of the city's streetlights do not work. There are 78,000 vacant structures in a city whose population is about 687,000.

Kaiser moved his family out of Detroit because he said it got too dangerous for his children to walk around the block by themselves. He used to mow his lawn with a gun strapped to his belt. Dooley still lives in Detroit, but says that in the winter, when darkness falls early, he goes between his house and his car with a hunting rifle.

"There's trouble everywhere," he said.

Those who want to live in Detroit are thwarted by an unemployment rate reaching 16%. Jeff Windon used to be able to get by collecting and selling scrap metal from factories. When the factories began to close, he moved to Texas about a decade ago to find work. He returned to Detroit this year, and says he barely recognizes it.

"It looks like Beirut," he said, looking out the window of a barbershop north of downtown, where scraggly weeds have taken over blocks of vacant lots, dotted by the occasional house covered with graffiti.

Government officials say that the bankruptcy will allow Detroit to reinvent itself.

"It's time to say enough is enough," Michigan Governor Rick Snyder, a Republican, said at a news conference Friday morning.

It's unclear how long the process will take. U.S. Bankruptcy Judge Steven Rhodes was appointed Friday to handle the case, but this marks only the beginning of the legal wrangling that is sure to occur as creditors including retirees, unions and banks fight over what they're owed.

Fred Hooper, 39, isn't waiting around to watch the battle play out. Though Hooper lives in the house his mother left him when she died, he plans to move out of Detroit this summer to a suburb.

"There's no police presence in any of these neighborhoods. I have my own gun; that's just the way it is," he said, gesturing to a barefoot woman sitting on a bridge at the end of his street who he said had just finished smoking some crack.

He had already vowed never to work in Detroit again after he was held up at gunpoint when thieves robbed an ATM at the last place he worked. Police didn't have the resources to look into the case, he said.

"You can't go more than a block without seeing abandoned, vacant, torn-apart, burned homes, and that's the everyday norm here," Hooper said. "It's a long time before there's a change coming."


http://www.latimes.com/news/nationworld/nation/la-na-detroit-bankruptcy-20130720,0,3410260.story
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« Reply #7 on: July 24, 2013, 06:29:57 pm »


From the Los Angeles Times....

Opinion-Editorial: It's not so simple in Detroit

In assessing the city's decline, there's plenty of
blame to go around — and not a lot of answers.


By GARRY GOLDMAN | 5:00AM - Saturday, July 20, 2013

Windows of an abandoned office building in downtown Detroit. The city filed for Chapter 9 bankruptcy, making it the largest city to file for bankruptcy in U.S. history. — Photo: Bill Pugliano/Getty Images.
Windows of an abandoned office building in downtown Detroit. The city filed for Chapter 9 bankruptcy, making it the largest city
to file for bankruptcy in U.S. history. — Photo: Bill Pugliano/Getty Images.


THERE'S a scene in the movie version of "The Grapes of Wrath" that's stuck in my head. It's where a guy in a suit drives out to tell Muley the sharecropper that he and his family have to get off the land they've been farming for three generations.

MULEY: You mean get off my own land?

THE MAN: Now don't go blaming me. It ain't my fault.

MULEY'S SON: Whose fault is it?

THE MAN: You know who owns the land — the Shawnee Land and Cattle Company.

MULEY: Who's the Shawnee Land and Cattle Comp'ny?

THE MAN: It ain't nobody. It's a company.

SON: They got a pres'dent, ain't they? They got somebody that knows what a shotgun's for, ain't they?

THE MAN: But it ain't his fault, because the bank tells him what to do.

SON: All right. Where's the bank?

THE MAN: Tulsa. But what's the use of picking on him? He ain't anything but the manager, and half-crazy hisself, trying to keep up with his orders from the East!

MULEY: (bewildered) Then who do we shoot?

Good question. Perfectly understandable. And it's a perfectly understandable reaction to the Detroit bankruptcy filing too. But while several candidates come to mind, the question just does not have a satisfactory answer.

We could blame the relentlessly moronic City Council or the thuggish and rapacious former mayor, Kwame Kilpatrick (currently in custody awaiting sentencing for extortion, bribery, fraud and racketeering). But a council of Mensa members with doctorates wouldn't have made a difference. And if Detroit could get back every penny Kilpatrick stole, with penalty and interest, it wouldn't make a dent.

We could blame the generations of politicians who gimmicked the budget and made promises they couldn't keep. But who wouldn't have done the same thing in their shoes? Few of us control multimillion-dollar budgets. But it's fair to look at the budgets we do control to make a prediction about how we would have acted. How many of us have saved adequately for retirement? How many are going to cut down our drinking and start that diet and exercise program just as soon as we get through this one temporary crisis?

We could blame racism and white flight. That's a popular theme. And there is certainly plenty of racism out there. But it wasn't just white folks who left Detroit. There are very few people who will stay in a poor neighborhood if they don't have to. As the city went from a population of nearly 2 million in the 1950s to about 700,000 today, many thousands of black families left, just like the white ones, in a perfectly legitimate effort to find safer neighborhoods and better schools.

We could blame the employees and their unions. Tea party types like to do that. But, contrary to what tea partiers say, public sector employees earn less than comparably educated private-sector employees. The tacit arrangement was always that the public sector made up for its reduced salary with increased job security and improved pension benefits. In Detroit, that job security evaporated long ago, and now the pensions are in play.

We could blame the banks. It's hard not to hate the banks. But even there things are not so simple. If Detroit walks away from its bonds, it won't just make it more difficult for Detroit to raise money to build anything in the future, it will make it more difficult for any municipality to raise money to build anything in the future. And though there is a certain appeal to the idea that the bondholders should be the ones who take the biggest hit, that appeal is substantially diminished if we recognize that many of the bondholders we are talking about are pension funds.

A wise old professor once told me that all simple political explanations are fundamentally optimistic. The idea is that there is a madman at the wheel. If we could only knock out the madman and grab the wheel, everything would be OK. The sad truth, he said, is that there is no madman. And there is no wheel.


Barry Goldman, an arbitrator and mediator, served as deputy director of the Human Rights Department in former Detroit Mayor Coleman Young's administration.

http://www.latimes.com/news/opinion/commentary/la-oe-goldman-detroit-bankrupcty-20130721,0,5510777.story
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« Reply #8 on: July 24, 2013, 06:46:34 pm »


From the Los Angeles Times....

Detroit bankruptcy: Bailout unlikely, mayor and Michigan governor say

By LISA MASCARO | 12:44PM - Sunday, July 21, 2013

Michigan Governor Rick Snyder, right, and state-appointed emergency manager Kevyn Orr leave a news conference in Detroit about the city's bankruptcy filing. — Photo: Carlos Osorio/Associated Press.
Michigan Governor Rick Snyder, right, and state-appointed emergency manager Kevyn Orr
leave a news conference in Detroit about the city's bankruptcy filing.
 — Photo: Carlos Osorio/Associated Press.


WASHINGTON — Michigan’s Republican governor said Sunday he does not expect — or necessarily want — a federal bailout of Detroit as the city struggles to provide services and pay pensions for city workers after becoming the largest U.S. city to file for bankruptcy.

Governor Rick Snyder pledged that city operations would continue, but he sought to lower expectations that Washington might step in to save the iconic American city. In 2009, the federal government intervened to rescue much of the U.S. auto industry, which is headquartered in Detroit.

The bankruptcy filing “is a very tragic situation, and this was a very difficult decision, but it's the right one,” Snyder said on “Face the Nation”.

“If the federal government wants to do that, that's their option,” he said, referring to a bailout. “The way I view it is I want to partner with all levels of government to stay focused on services to citizens.”

Some have compared the city’s plight to that of a natural disaster, worthy of federal intervention.

But the city’s mayor, David Bing, said Sunday that “it's very difficult right now to ask directly for support.”

“Now that we've done our bankruptcy filing, I think we've got to take a step back and see what's next,” Bing said on “This Week with George Stephanopoulos. “There's a lot of conversation, a lot of planning, a lot of negotiations that will go into fixing our city.”

Vice President Joe Biden said last week it was unclear whether the federal government could play any role in helping Detroit provide services or pay its retirees.

Federal law governing municipal bankruptcies does not provide for the kind of quick restructuring that occurred in the auto industry rescue. Moreover, a federal bailout of Detroit would probably require legislation passed by Congress, which seems almost impossible in the current political environment.

Detroit filed for Chapter 9 bankruptcy last week after Snyder’s appointed turnaround expert, Kevyn Orr, said there was no other alternative. Decades of falling population and fiscal mismanagement, he said, had left the city $18 billion in debt.

The once-thriving home of the U.S. automotive industry has seen its population drop steadily for more than half a century, to 700,000 now from more than 1.8 million at its peak in 1950, leaving the city struggling to provide police, fire and general services across a huge metropolis now pocked with vacant lots and swaths of abandoned buildings.

Orr, who represented Chrysler during its successful restructuring, said the city had few expectations that a federal bailout was coming from Washington.

“We are not expecting the cavalry to come charging in,” Orr said on “Fox News Sunday”. “We are out here on outpost and we have to fix it because we dug the hole. And that's the assumption that we are operating on, on how we're going forward.”

Some 30,000 current and retired city workers face a future with reduced pensions. Basic city services exist, but not at “normal” levels, Snyder said.

At the same time, what to do with decayed structures of Detroit’s core have been a subject of both economic and artistic scrutiny.

Pension liabilities make up the bulk of Detroit’s debt, and Orr, who has been the city’s emergency financial manager for the past four months, said there would likely be changes in the payments retired city workers receive.

“There are going to be some adjustments,” Orr said on “Fox News Sunday”. “We don't have a choice. We've crossed the Rubicon on the level — we have $18-plus billion — $18 billion to $19 billion in debt and no funding mechanism for it.”

The path forward, however, remained uncertain after a judge in Michigan on Friday ordered a halt to the bankruptcy proceedings, saying they violated the state’s constitution, which bars reductions in public pensions. The state’s attorney general vowed to appeal.

The battle over funding the city’s pensions may reverberate in other troubled cities, including California’s Stockton and San Bernardino, which have also filed for bankruptcy protection.


http://www.latimes.com/news/politics/la-pn-detroit-bankruptcy-michigan-governor20130721,0,6807766.story
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« Reply #9 on: July 24, 2013, 07:56:15 pm »


From the Los Angeles Times....

Sale of Detroit Institute art debated in light of city's bankruptcy

By DAVID NG | 7:40AM - Monday, July 22, 2013

Auguste Rodin's “The Thinker” on view in front of the Detroit Institute of Arts in Detroit. — Photo: Jeff Kowalsky/Bloomberg.
Auguste Rodin's “The Thinker” on view in front of the Detroit Institute of Arts in Detroit. — Photo: Jeff Kowalsky/Bloomberg.

THE Detroit Institute of Arts is back in the national spotlight after city leaders said Thursday that the city had filed for bankruptcy. At the heart of the museum-world debate is whether the city should sell valuable works of art in the DIA's collection to pay off some of the city's debt.

Selling items from a public museum is frowned upon by the art world. In June, Michigan Attorney General Bill Schuette stated that the art in the DIA is held in the public trust and therefore cannot be sold.

The Michigan state Senate passed a bill in June that would stop any sale of art unless the items were transferred to a comparable institution. But the bill hasn't been approved by the state's House of Representatives.

The DIA is one of the top art museums in the country and has 60,000 objects dating from the Renaissance to the 20th century. The museum is headed by Graham W.J. Beal, who once served as director of the Los Angeles County Museum of Art.

Detroit is facing debt estimated at $19 billion. News of the possible art sale was first reported in May by the Detroit Free Press. The city's emergency manager, Kevyn Orr, was reportedly considering selling objects from the museum and had set in motion an appraisal of works of art in the permanent collection.

Prominent leaders in the museum world have criticized any possibility of a sale. But others believe selling art would benefit the city and its inhabitants.

A Forbes commentator wrote on Sunday that "yes, of course [the museum] should sell" works from the collection. Tim Worstall wrote that much of the debt could be paid down "by moving around some paint daubed pieces of canvas. That looks pretty much like a no brainer to me as a start. What is it that we’re supposed to care about? A few pieces of canvas or real lives as they are actually lived?"

On Thursday, DIA posted an official statement in reponse to the city's decision to declare bankruptcy:

"Like so many with deep roots in this city, the Detroit Institute of Arts (DIA) is disappointed that the Emergency Manager determined it was necessary to file for bankruptcy. As a municipal bankruptcy of this size is unprecedented, the DIA will continue to carefully monitor the situation, fully confident that the emergency manager, the governor and the courts will act in the best interest of the City, the public and the museum. We remain committed to our position that the Detroit Institute of Arts and the City of Detroit hold the DIA’s collection in trust for the public and we stand by our charge to preserve and protect the cultural heritage of all Michigan residents."


http://www.latimes.com/entertainment/arts/culture/la-et-cm-detroit-institute-of-art-20130721,0,2641900.story
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« Reply #10 on: July 24, 2013, 07:57:04 pm »


From the Los Angeles Times....

Detroit bankruptcy: Court fight begins over pensions

By RICHARD SIMON | 1:30PM - Monday, July 22, 2013

Ingham County Circuit Court Judge Rosemarie Aquilina adjourns a hearing on a lawsuit filed by Detroit pension funds trying to keep city retirees' payments from being cut during bankruptcy proceedings. — Photo: Kathleen Galligan/Associated Press.
Ingham County Circuit Court Judge Rosemarie Aquilina adjourns a hearing on a lawsuit filed by Detroit pension
funds trying to keep city retirees' payments from being cut during bankruptcy proceedings.
 — Photo: Kathleen Galligan/Associated Press.


WASHINGTON — While a legal battle has begun over whether Detroit can use bankruptcy to slash city pensions, an effort has been launched in Congress to hold hearings into what one lawmaker said is the "increasing use" of bankruptcy by municipalities.

Detroit Congressman John Conyers Jr., the top Democrat on the House Judiciary Committee, asked Committee Chairman Robert W. Goodlatte (Republican-Virginia.) to call hearings, expressing concern that bankruptcy is being "misused" to deny about 30,000 current and retired Detroit workers their pensions.

"Certainly people are  very fearful," Representative Gary Peters, a Democrat who also represents Detroit, said in an interview.

Detroit city pension funds sued Republican Governor Rick Snyder and the city's emergency manager, saying that bankruptcy could not be used to reduce the pensions of about 30,000 current and retired workers to help ease the city's $18-billion debt. They contended that the pensions are protected by the state constitution.

"I feel very betrayed," Metro Detroit AFL-CIO President Chris Michalakis said in an interview, "and I know a lot of workers in Detroit feel that way, too."

Ingham County Circuit Judge Rosemarie Aquilina on Monday put off a hearing until July 29th on the lawsuit brought by the pension funds.

Some legal experts contend that federal bankruptcy law trumps state law.

In the meantime, the federal judge overseeing the bankruptcy case, Steven W. Rhodes, set a hearing for Wednesday on Detroit emergency manager Kevyn Orr’s request to put lawsuits challenging the bankruptcy on hold.

Conyers said that congressional hearings should examine, among other things, whether bankruptcy can be used to override state constitutional pension guarantees.

The issue, he said, is significant "not only to the financial community but to all Americans who transact business with, work for, and live in municipalities across the United States."


http://www.latimes.com/news/nation/nationnow/la-na-nn-detroit-bankruptcy-court-20130722,0,4915210.story
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« Reply #11 on: July 24, 2013, 08:38:59 pm »


From the Los Angeles Times....

A bankrupt Detroit, maybe down but never out

By ROBIN ABCARIAN | 11:08PM - Tuesday, July 23, 2013

Buildings stand in the skyline of Detroit, Michigan. — Photo: Jeff Kowalsky/Bloomberg.
Buildings stand in the skyline of Detroit, Michigan. — Photo: Jeff Kowalsky/Bloomberg.

LAST WEEK, with a massive $18-billion debt, Detroit became the largest American city to seek bankruptcy protection, and once again we are reading obituaries of the late, great Motor City.

I don’t pretend to be an expert on Detroit, where I once worked for three years, but the widely circulating conservative analyses that lay blame for the city’s woes at the feet of Democrats and big labor are infuriatingly off base.

The decline of Detroit is an American tragedy with many causes, chief among them the foundering of the U.S. manufacturing sector. That’s not a Detroit problem; that’s an American problem.

Detroit is a spread-out city — covering some 142 square miles — and as its population has plunged from a high of 1.8 million people in the 1950s to fewer than 700,000 today, its neighborhoods have a hollowed-out feel. There just aren't enough people to fill the space; some estimate that a quarter of the city is empty.

But there are no simple answers when it comes to Detroit. The recent spate of municipal corruption is appalling, but does little to explain the overall state of decay in Detroit.

As my former colleague Scott Martelle, author of “Detroit: A Biography”, wrote last March in The Times: “The emptying of Detroit stems from a complex mix of intractable racism, corporate and governmental decisions, failed institutions and crime levels that have driven most of the middle class to the suburbs. Local governments have regularly undercut each other with tax deals to lure jobs.… These deals have helped corporations at the expense of communities like Detroit, causing the city’s tax base to shrink faster than the city government could adapt and leaving it with massive debt, annual operating deficits, a demoralized workforce, an impoverished population base — and no plan for how to fix things.”

To help stem the red ink, Michigan Governor Rick Snyder has called for deep pension cuts for the city’s 21,000 retirees. Many American cities and counties with heavy pension obligations of their own are watching closely as the fight over the pensions takes center stage in court. The retirees argue that the Michigan Constitution does not allow their pensions to be cut. A federal judge is expected to decide whether the city can break its promise to the retirees.

In the late 1980s, I spent some of the most rewarding years of my career in Detroit, working for one of the city’s great newspapers. The place was in decline even then. White flight after the traumatic 1967 riots and middle-class migration was about to reduce the city’s population to below a million, the tax base was shriveling, the crack epidemic was in full swing and abandoned homes were a blight on many city blocks.

As the region's industrial base crumbled, public schools struggled and the crime rate soared. Nothing seemed to work, but the city never stopped telling itself it was on the verge of a comeback. (There’s a reason the city’s biggest building project, funded in the 1970s by Ford Motor Company was called the Renaissance Center.)

There were hopeful signs, some weirder than others. The city had completed a new public transportation system — the People Mover — an elevated rail line that took people in a mile-long circle around downtown. Funded with federal money, it just went in a big circle around the downtown, with no spokes out to the neighborhoods or beyond to the affluent suburbs. “We got the hole without the doughnut,” as some joked at the time. The People Mover never got the ridership that was predicted and never became profitable.

Last fall, I spent a few days in Detroit when I was in Michigan to report on the presidential campaign, and its native son, the GOP candidate Mitt Romney. (He lost big in Michigan, having badly hurt himself by urging the federal government to let the car companies go bankrupt in 2008. My old newspaper, the Detroit Free Press, had left its longtime building years before and moved down the street into the building of its one-time competitor, the Detroit News, with whom it has had a joint-operating agreement. The old Free Press building is abandoned now, its windows boarded, big planters on the sidewalk outside sprouting weeds.

Yet there were many signs of life in the city’s core: a new stadium for the Tigers, a renovated opera house, lots of new business including the headquarters for Quicken Loans, which had moved thousands of employees downtown from the suburbs. Other great city institutions have committed to long-term growth and investment. Henry Ford Hospital has announced a billion-dollar expansion, Wayne State University a $90-million tech center and so on.

But the plight of the city’s residential neighborhoods still came as a shock. While Detroiters have objected to what they see as a prurient interest in the city’s decay — “ruin porn” they have dubbed it — it’s worth anyone’s while to drive around Detroit to see what happens when a city implodes.

Dilapidated houses with collapsing roofs and porches are a common sight. Many have been bulldozed, leaving pock marks on every block. In some places, the empty lots give the impression that the still-intact homes have huge, impressive yards. Some residential streets in the middle of the city looked like country lanes.

One of the saddest aspects of the Detroit dynamic is the contrast between the suffering black city and its affluent white suburbs. Not that other cities are not segregated; of course they are. But the racial segregation is so stark, and the contrast between city and suburb are so dramatic, that you feel you are witnessing something akin to a passive form of apartheid. Venture across the city’s northern boundary, Eight Mile Road, or across the city’s eastern boundary into the Tony Grosse Pointes, and you feel you are in a different world. It’s hard to believe the places are related by a common economy.

Detroit is not my city and it never will be.

But it will always claim a small piece of my heart. If you've ever spent a meaningful amount of time there, you can’t help but love the place.

Like America herself, it’s a city that’s often down, but never out.


http://www.latimes.com/local/lanow/la-me-ln-a-bankrupt-detroit-maybe-down-but-never-out-20130723,0,3356932.story
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« Reply #12 on: July 24, 2013, 08:55:56 pm »


From the Los Angeles Times....

Opinion-Editorial: Detroit — what a city owes its residents

Detroit's bankruptcy may define what level of basic services a city should provide.

By MICHELLE WILD ANDERSON | 12:01AM - Wednesday, July 24, 2013

Detroit filed for Chapter 9 bankruptcy protection. Above: A person walks past the remains of the Packard Motor Car Company. — Photo: Spencer Platt/Getty Images.
Detroit filed for Chapter 9 bankruptcy protection. Above: A person walks past the remains of the Packard Motor Car Company.
 — Photo: Spencer Platt/Getty Images.


THOUGH IT IS the biggest city in U.S. history to file for bankruptcy, Detroit is only one of 26 urban municipalities that have gone into bankruptcy or state receivership for fiscal insolvency since 2008. Detroit should draw attention and debate to a challenging issue underlying all these public insolvencies: What level of public services will we protect and guarantee for U.S. cities?

The Bankruptcy Court will have to face that question. It will have to determine whether Detroit can cut into current services any more than it already has. Unless the state or federal government steps in with funds for operating costs, the bankruptcy will function as a zero-sum game, with residents fighting creditors for a share of city revenue. Creditors have contracts to monetize what they are seeking, but how should the court determine the public spending that residents need today and tomorrow?

Politicians and judges who manage local fiscal crises speak of maintaining basic services and ensuring residents' minimal health and safety, but these concepts are short on specifics. While our laws provide an entitlement to a public education, and we have long struggled to interpret what constitutes a legally adequate education, there is little to nothing that would tell us what other services the local public sector must provide.

As a matter of law, there is no such thing as a crime rate that is too high or an ambulance response time that is too long. Should there be?

For now, it is left to politics and moral judgment to determine whether it is acceptable that less than one in three streetlights are operational in Detroit or that the city has 80,000 abandoned and blighted structures that it cannot afford to demolish. In Detroit, as in many other struggling cities, dramatic police layoffs mean that the average wait time after a 911 call for a police officer is 58 minutes, and a resident can rarely summon an officer at all if the reported crime is not in progress and violent.

As for other public functions that a high-poverty city (especially one with severe winters) might hope to have — such as reliable bus service, playground equipment, indoor basketball courts, after-school programs, active libraries and community centers for the elderly — these services are decades into deep cuts and widespread closures. Indeed, having curtailed everything beyond emergency services, it would be tempting to refer to a government like Detroit's as a night-watchman state — the libertarian ideal of a government focused only on public safety.

That is, we'd be tempted to use such a term for Detroit, and cities like it, were it not such a cruel irony: Detroit had more than 15,200 violent crimes and 500 acts of arson in 2012. The night watchmen are understaffed and underpaid. According to a 2012 study by economists Aaron Chalfin and Justin McCrary, public spending in Detroit on each police officer (including all wages, benefits and retirement costs) is less than two-thirds what it is just 45 miles away in the prosperous university town of Ann Arbor.

As a political and moral matter, as much as a legal one, Detroit represents an opportunity to take a stand for urban habitability. What belongs on our list of minimum standards for a city? Detroit invites us to have a public conversation about what services and public spaces we expect from city governments for human dignity and for humans to flourish. We have a chance to say that no one should have to wait hopelessly for an ambulance, that a violent crime in a neighborhood every few hours is intolerable.

Paying for such commitments should not just be the burden of creditors. Many of the city's creditors are rank-and-file public employees and retirees who have counted on a public pension and are not eligible for Social Security. Detroit's bankruptcy plan could send them into poverty in their old age.

Basic services and safety in our cities are the responsibility of states, the federal government, the private sector and voters. It is all of them — all of us — who have a role to play in the stabilization that Detroit is seeking through bankruptcy. All of us have a responsibility to help them give basic health and safety real meaning, and to make this bankruptcy a safety net, not a punishment.


Michelle Wilde Anderson is an assistant professor of law at UC Berkeley School of Law.

http://www.latimes.com/news/opinion/commentary/la-oe-anderson-detroit-bankruptcy-20130724,0,1915404.story
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« Reply #13 on: July 25, 2013, 05:30:11 pm »


From the Los Angeles Times....

Judge rejects challenge, says Detroit bankruptcy can proceed

By ALANA SEMUELS | 3:36PM - Wednesday, July 24, 2013

Sharon Levine, attorney for the AFSCME union at Detroit's bankruptcy hearing, speaks with the news media after Bankruptcy Judge Steven Rhodes ruled that the city's bankruptcy petition may proceed. — Photo: Bill Pugliano/Getty Images.
Sharon Levine, attorney for the AFSCME union at Detroit's bankruptcy hearing, speaks with the news media after Bankruptcy
Judge Steven Rhodes ruled that the city's bankruptcy petition may proceed. — Photo: Bill Pugliano/Getty Images.


A JUDGE has ruled that Detroit’s bankruptcy can proceed, days after a state court judge ruled that the bankruptcy was unconstitutional.

U.S. Bankruptcy Judge Steven Rhodes, who was named as the judge on the bankruptcy case last week, said that his courtroom was the exclusive venue for the case and that, although he wasn’t ruling whether the bankruptcy violated state law, it was up to him to decide the case.

There are still many steps to be taken before Detroit’s petition for bankruptcy is granted, and Wednesday's ruling does not mean that Rhodes will allow the city to receive Chapter 9 protection, said Andrew D. Gottfried, a partner in the bankruptcy and restructuring practice of the law firm Morgan Lewis.

But the ruling does remove the first of what is sure to be many obstacles for the city in proceeding with its case.

“He hasn’t ruled on the merits of the petition yet,” Gottfried said. “He’s just saying he has jurisdiction.”

Detroit filed for bankruptcy on July 18th, becoming the largest municipality to ever file for Chapter 9. It said at the time that it had debts of $18 billion and that it had pension liabilities of $3.5 billion.

But the same day the city filed for bankruptcy, groups representing public retirees filed lawsuits in Ingham County, which does not include Detroit but includes the state’s capital, Lansing, challenging the bankruptcy’s constitutionality. The following day, Judge Rosemarie Aquilina ruled that the bankruptcy had violated the Michigan Constitution because pensions are protected by state law. The state’s attorney general immediately appealed that ruling.

The lawsuits and Wednesday's ruling foreshadow the battles that are sure to ensue as Detroit makes its claim in bankruptcy court.

Before he grants Detroit bankruptcy protection, Rhodes will have to find that the city has been authorized by the state to file for bankruptcy, that the city is insolvent, and that it has negotiated in good faith with creditors, said Gottfried. Creditors and the city disagree on nearly all of these issues.

“The filing is unconstitutional,” because the state constitution expressly protects pensions, said Sharon Levine, a lawyer for the American Federation of State, County and Municipal Employees, which represents city workers.

Unions, including AFSCME, have also said that the city did not try to negotiate with unions before filing.

“We don’t believe that there were any meaningful negotiations that took place prior to the bankruptcy,” Levine said.

Even the amount of pension liabilities at stake is under debate.

The Detroit Firefighters Association said Wednesday that the city had inflated the pension liabilities of police and firefighters, accusing emergency manager Kevyn Orr of engaging in a “propaganda campaign.” The actuary for the Retirement System of the City of Detroit has said the city’s pension liabilities are about $977 million, rather than the $3.5 billion Orr has listed, said Daniel McNamara, president of the firefighters union.

Calculating pension liabilities can be an art rather than a science, because it takes into account future returns on investment and what liabilities will come due when.

Because Detroit is the largest municipality to ever file for bankruptcy protection, Rhodes has little precedent as the case moves forward. In 43 states, municipalities are prohibited by law from filing for bankruptcy, but Michigan is not one of them.

But laws about Chapter 9 also make clear that in order to qualify for bankruptcy protection, cities must have a state’s OK.

“This is untrod ground we’re on right now,” Gottfried said. “There isn’t a lot of precedent.”


http://www.latimes.com/news/nation/nationnow/la-na-nn-detroit-rhodes-bankruptcy-20130724,0,3810277.story
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« Reply #14 on: November 07, 2013, 09:45:50 pm »


from the Detroit Free Press....

10 people shot at Detroit barbershop, at least 2 dead

By GINA DAMRON, ANN ZANIEWSKI and ELISHA ANDERSON | 11:08PM CST - Wednesday, November 06, 2013

MAP

THEY WERE playing dice inside Al’s Place Barber Shop on Detroit’s east side when gunfire rang out Wednesday evening.

Someone opened the door.

As bullets came in, many of the people who were gathered inside ran for their lives, taking cover at nearby businesses, including a party store across the street.

When it was over, 10 people had been shot — at least two fatally — a particularly bloody scene in a city well-known for its rampant shootings. It served as another reminder of the violence in Detroit, second only to Flint nationally in homicide and violent crime rate, at a time when elected leaders and others are focusing on ways to reduce the bloodshed that’s all too common in many neighborhoods.

No arrests had been made by Wednesday night. Police said the business is known for gambling, but the motive for the shooting wasn’t clear, nor did investigators know whether anyone in the barbershop was targeted.


Police investigate outside Al's Place Barbershop after a multiple shooting on 7 Mile on Wednesday, November 6th, 2013. — Photo: Andre J. Jackson/Detroit Free Press.
Police investigate outside Al's Place Barbershop after a multiple shooting on 7 Mile on Wednesday, November 6th, 2013.
 — Photo: Andre J. Jackson/Detroit Free Press.


Lorne Carter, 48, was smoking a cigarette against the wall of a nearby business when he said he heard about 30 to 40 shots fired around 6 p.m. near the barbershop in the 5200 block of East Seven Mile.

“It sounded rapid,” he said.

Detroit Police Chief James Craig said all of the victims are male, but no ages or names were released. Police first said there were three fatalities, but changed it to two just before 8 p.m.

Police are looking for at least two shooters and two Chevrolet Impalas — one black and one white — which may have bullet holes in the back.

“I can’t even imagine what would cause this type of violence,” Craig said.


Police gather at a scene of a multiple shooting at Al's Place barbershop on Wednesday, November 6th, 2013, in Detroit. — Photo: Andre J. Jackson/Detroit Free Press.
Police gather at a scene of a multiple shooting at Al's Place barbershop on Wednesday, November 6th, 2013, in Detroit.
 — Photo: Andre J. Jackson/Detroit Free Press.


The shooting started near the rear of the barbershop, according to a police source familiar with the investigation. The black Impala pulled into the alleyway, followed by the white Impala and a third vehicle, the source said.

Two people from the white Impala began shooting at the third vehicle, the source said. At some point, the door of the barbershop opened, and people inside were shot.

The bodies of the two people shot and killed were still in the barbershop at 8 p.m. as police continued their investigation.

Police were interviewing witnesses, but it’s unclear how many people were inside or outside the barbershop at the time of the shooting, police spokesman Sergeant Michael Woody said.

The victims were transported to multiple hospitals, including Detroit Receiving. The 10th victim came to a Detroit hospital just after 10 p.m. with a gunshot wound.

One is listed in critical condition, police said.


A small crowd gathers near a scene of a multiple shooting near Al's Place on 7 mile on Wednesday, November 6th, 2013, in Detroit. — Photo: Andre J. Jackson/Detroit Free Press.
A small crowd gathers near a scene of a multiple shooting near Al's Place on 7 mile on Wednesday, November 6th, 2013, in Detroit.
 — Photo: Andre J. Jackson/Detroit Free Press.


A distraught mother, who did not want to give her name, said she believes one of the men who was killed is her 40-year-old son. She said her three sons were in the barbershop at the time of the shooting, and one escaped and ran home to tell her and she rushed to the scene.

“I heard he’s dead … they won’t let me up there,” she said from a gas station near the scene.

That son had gone to the business to get bus money from his brother, she said. Her other two sons made it out uninjured.

Lonzetta McGeorge, 24, was leaving her home to go to a business by the barbershop when she heard the gunfire.

“It’s just so sad,” she said.


http://www.freep.com/article/20131106/NEWS01/311060167/Shooting-Detroit-7-Mile
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« Reply #15 on: December 26, 2013, 02:19:17 pm »


From the Los Angeles Times....

Detroit's abandoned buildings draw tourists instead of developers

Detroit has seen an uptick in history buffs and photographers visiting its ruins since its bankruptcy filing.

By ALANA SEMUELS | 4:33PM PST - Wednesday, December 25, 2013

Jesse Welter frequently takes visitors to this abandoned church in Detroit, which has been stripped of all but one pew.
Jesse Welter frequently takes visitors to this abandoned church in Detroit, which has been stripped of all but one pew.

DETROIT — He'd heard stories of ruin and blight, but that didn't prepare Oliver Kearney for what he saw:

Prostitutes roaming the streets at 8 a.m., rubble-strewn parking lots overrun with weeds, buildings taken over by bright pink graffiti, the message scrawled on blackboards in deserted schools: "I will not write in vacant buildings."

He took 2,000 photographs his first day.

"No other American city has seen decline on this scale," Kearney said. "It's really a once-in-a-lifetime thing you're going to see."

And he saw it all on a tour.

Kearney, an 18-year-old aspiring architect, persuaded his father to travel with him from Britain to Detroit to participate in one of the city's few burgeoning industries: tours of abandoned factories, churches and schools.

Led by tour guide Jesse Welter, they crawled on their hands and knees to peek inside a train station closed long ago; they squeezed through a gap in a fence to climb the stairs of what was once a luxury high-rise; they ducked under crumbling doorways to see a forgotten ballroom where the Who held its first U.S. concert.

"In Detroit, you can relate, you can see traces of what's happened, you can really feel the history of a city," Kearney said. "In Europe, when things become derelict, they'll demolish them."

That's not possible here. The city estimates it has 78,000 vacant structures, and demolishing each derelict residential building costs $8,000 — money the bankrupt city can't afford.

The city says that 85% of its 142.9 square miles had "experienced population decline" over the last decade, and efforts to persuade investors to buy commercial buildings and rehabilitate them have been mixed, at best. For example, plans to turn the Michigan Central Depot, a once-grand train station, into a casino and then into police headquarters have gone nowhere, and it's stood empty since 1988.

Photographers have flocked to the city to capture the decline; two French photographers even produced a book, "The Ruins of Detroit". But since the city declared bankruptcy in July, hotels say they've seen an uptick in visitors inquiring about the ruins. So have restaurants in the up-and-coming district of Corktown, near the abandoned train station.

Welter says he had to buy a 12-seat van to accommodate the growing interest.

Welter once worked as an aircraft mechanic and then an ATM repairman. He dabbled in photography and began venturing into the city from his home in the suburb of Royal Oak, taking pictures of derelict buildings and selling the shots at an artists market.

The photos, though grim, brought back sweet memories: Viewers would remember passing through the train station in its glory, or recall photographs of their grandparents honeymooning at a posh hotel, depicted in Welter's photos as a decaying tower.

Welter, 42, figured that if other people were interested in seeing the buildings, he could guide them around and, perhaps more important, keep them safe. In October, two tourists were carjacked while visiting an abandoned factory; others have been assaulted there.

Welter guided his first tour in late 2011, but the business has really picked up this year. His clients pay $45 for a three-hour tour and explore some of Detroit's most famously blighted structures: the Packard Automotive Plant, the train station and the East Grand Boulevard Methodist Church, which features peeling paint and vast balconies.

Welter, who is bearded and slim, knows how to sneak into buildings closed to the public. He knows which neighborhoods are plagued by packs of feral dogs, and which ramshackle building contains a recording studio with equipment still set up as if its occupants just left for lunch. He knows the churches so well that he helped a young couple find an abandoned one in which to conduct their wedding.

It's not legal, per se, to enter these buildings. Police will give $225 tickets for trespassing if people enter schools, Welter says, but have otherwise told him they don't mind him going into other buildings.

On a recent weekday morning, he brought a visitor to one of his favorite spots, St. Agnes Catholic Church, a rotting structure where graffiti vandals have made their mark. A beam of sunlight shone through the windows, falling on the one remaining pew in the church, a haunting image that illuminated the church's destruction. Then Welter heard a motor idling outside and quickly ushered his guest toward the exit.

"Someone's pulling up out there; let's start walking this way," he said, moving toward the crumbling staircase that leads to the church's courtyard, which was littered with soda cans and food wrappers.

He's not afraid of the authorities — they're in short supply in this cash-strapped city — but of scavengers, vagrants and others who might take advantage of someone with an expensive camera. That's why he usually begins his tours at 7 a.m., the best time to avoid other humans, he says.

Next, he headed into a girls' school attached to the church, climbing the stairs to a hall of classrooms where rubble was everywhere, as if a bomb had gone off. Some books and magazines dated to 1962 and told outdated stories of boys living on the prairie. A bird's nest sat in one of the large windows where a pane used to be.

Locals use a derogatory term, "ruin porn," to describe the phenomenon of people gawking at the decay. They want visitors to see the positive parts of Detroit, such as the vacant fields that enterprising farmers have turned into urban gardens. If tourists are going to look at the ruins, they should then volunteer in the community, many Detroiters say.

"The decay is not cool, not arty-farty," Jean Vortkamp, a community activist and onetime mayoral candidate, said in an email. "I see the lady with bags and three layers of clothes on, and then I see a group of white young people climb out of their dad's cars with cameras that are worth so much."

Some Detroiters, including a group of urban explorers, have a beef with Welter in particular. They scrawled a message on the walls of the St. Agnes Church, "Go Home Jesse … We HATE you and your tour bus".

Welter says he's opening visitors' eyes to the problems of Detroit, which could potentially drum up political will to help the city.

"People are going to do this anyway. Why not do it in a way that's going to be safer, easier for everyone?" he said.

Jason Schlosberg went on a tour with Welter when he was visiting Detroit on a business trip. Schlosberg, a lawyer and photographer from Washington, D.C., said he had long looked forward to exploring the "mecca" of run-down buildings that is Detroit.

But his experience touring crumbling ballrooms and onetime high-end residences caused him to think long and hard about what lessons Detroit can teach the rest of the country.

"It makes you question your mortality as a species. We try to make our mark on the planet by building these concrete and brick structures, but Rome obviously fell," he said. "What is Manhattan going to look like in 300 years? Is it still going to be a bustling metropolis?"

Whether Detroit will seek to capitalize on the tourists, or stop them, is unclear. The office of Kevyn Orr, the state-appointed emergency manager of the city, declined to comment for this story. Another city full of ruins, Gary, Ind., has taken advantage of the photographers flocking to its abandoned buildings. It charges $50 for a photography permit.


http://www.latimes.com/nation/la-na-detroit-ruin-tours-20131226,0,7211471,full.story
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« Reply #16 on: February 23, 2014, 11:46:21 am »


From the Los Angeles Times....

Detroit bankruptcy plan cuts pensions, payments to creditors

By ALANA SEMUELS | 10:30AM PST - Friday, February 21, 2014

The Detroit skyline is seen from the city's midtown. Detroit's creditors and residents got their first official glimpse Friday of a planned road out of bankruptcy. — Photo: Carlos Osorio/Associated Press.
The Detroit skyline is seen from the city's midtown. Detroit's creditors and residents got their first official glimpse Friday of a planned road out of bankruptcy.
 — Photo: Carlos Osorio/Associated Press.


DETROIT hopes to emerge from bankruptcy this year in part by significantly cutting city workers' pensions and payments to bondholders, according to a blueprint filed Friday to restructure the city's $18-billion debt.

Detroit is to invest $1.5 billion over a decade to provide basic services, attract new residents and businesses, reduce crime and demolish blighted properties, according to a statement explaining the plan for the largest municipal bankruptcy in U.S. history.

“The plan contemplates the city’s emergence from Chapter 9 this year and represents a crucial step toward the city’s rehabilitation and recovery from a decades-long downward spiral,” the statement said.

The plan treats various classes of creditors differently, which could cause tensions among retirees and current city employees.

It proposes reducing benefits to retired police and fire beneficiaries by 10%. It freezes the accrued pension of current police and fire employees, and then reduces that pension by 10%.

But other city employees and retirees, who hold claims through the general retirement system, could see pensions reduced by around 34%. The city will give additional benefits to those pension holders most in need, the plan says.

In an effort to resolve the bankruptcy quickly, the city said it would reduce the pension payments by less than proposed if pension holders “enter into a timely settlement with the city and state of Michigan.”

The city said “a variety of practices that contributed considerably to the underfunding of the pension plans,” singling out the general retirement system plan, which covers 5,600 active workers and 12,000 retirees.

The city says pension plans are underfunded by $3.5 billion, though unions dispute this number.

"There is still much work in front of us to continue the recovery from a decades-long spiral," city Emergency Manager Kevyn Orr said in a statement. "We must move swiftly to emerge from bankruptcy so that the financial distress harming the city can end."

Michigan Governor Rick Snyder also praised the plan and the work of Orr, whom he appointed.

"Detroit's comeback is underway," he said in a statement.

The union representing state and city employees was quick to criticize the big cuts proposed in the plan.

“The proposed plan of adjustment is a gut punch to Detroit city workers and retirees. The plan essentially eliminates healthcare benefits for retirees and drastically cuts earned pension benefits. Retires cannot survive these huge cuts to the pensions they earned. The plan is unfair and unacceptable,” said Al Garrett, the president of AFSCME Council 25.

There are still many steps that must be taken before the plan is approved.

First, U.S. Bankruptcy Judge Steven Rhodes must approve that the disclosure statement is adequate and presents enough information to creditors, said Andrew Gottfried, a partner in the bankruptcy and restructuring practice of the law firm Morgan Lewis.

Then, ballots will go out to creditors, who have the opportunity to vote for or against the plan. At least one class of impaired creditors must vote in favor of the plan for it to go forward, he said.

Some bondholders might object to the fact that they are getting less money than the pensioners, said George South, a partner at DLA Piper in New York. According to the disclosure plan, bondholders will get 20 cents on the dollar, less than either of the pension funds. Bondholders could object, saying that Judge Rhodes already declared that all creditors were equal under bankruptcy law.

"They could argue that you can’t distribute more to one set of creditors that are equal in priority to another set of creditors under the bankruptcy code," he said.

The plan also takes into account a proposed settlement that uses money from foundations and the state of Michigan to save the Detroit Institute of Arts from having to sell off artwork, and contributes to the pension plans. That may be another issue going forward; some creditors may object to the idea that the city can use money to pay one group of creditors but not another, South said.


http://www.latimes.com/nation/nationnow/la-na-nn-detroit-bankruptcy-union-pension-cuts-20131203,0,5624338.story
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« Reply #17 on: October 13, 2016, 10:51:36 pm »



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