jje1000
Senior Member
Using an old theatre as a parking garage is not my idea of preservation.
It's shameful, but it's far better than letting the entire building rot like the Lafayette Hotel- the theatre can still be restored in the future.
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Using an old theatre as a parking garage is not my idea of preservation.
It's shameful, but it's far better than letting the entire building rot like the Lafayette Hotel- the theatre can still be restored in the future.
^^some houses in Detroit are essentially worthless. One of the reasons that so many have been burned.
The city of Detroit filed for Chapter 9 bankruptcy protection in federal court Thursday, laying the groundwork for a historic effort to bail out a city that is sinking under billions of dollars in debt and decades of mismanagement, population flight and loss of tax revenue.
The bankruptcy filing makes Detroit the largest city in U.S. history to do so.
The city of Detroit has filed for bankruptcy protection, becoming the largest city in U.S. history to do so.
State-appointed Emergency Manager Kevyn Orr on Thursday asked a federal judge permission to place the city into Chapter 9 bankruptcy protection.
The filing would begin a 30- to 90-day period that will determine whether the city is eligible for Chapter 9 protection and define how many claimants might compete for the limited settlement resources that Detroit has to offer. The bankruptcy petition would seek protection from creditors and unions who are renegotiating $18.5 billion in debt and other liabilities.
Detroit Emergency Manager Kevyn Orr, who in June released a plan to restructure the city's debt and obligations that would leave many creditors with much less than they are owed, has warned consistently that if negotiations hit an impasse, he would move quickly to seek bankruptcy protection.
Michigan Gov. Rick Snyder would have to sign off on the filing. A spokeswoman did not immediately return telephone calls Thursday.
Orr's spokesman Bill Nowling would not confirm Thursday that the filing is imminent. However, he said, "Pension boards, insurers, it's clear that if you're suing us, your response is 'no.' We still have other creditors we continue to have meetings with, other stakeholders who are trying to find a solution here, because they recognize that, at the end of the day, we have to have a city that can provide basic services to its 700,000 residents."
This week, the city's two pension funds (which have claims to $9.2 billion in unfunded pension and retiree health care liabilities) filed suit in state court to prevent Orr from slashing retiree benefits as part of a bankruptcy restructuring.
Ambac Assurance Guaranty, which insures some of the city's general obligation bonds, has also objected to Orr's plan to treat those bonds as "unsecured," meaning they're not tied directly to a revenue stream and would receive pennies on the dollar of their value. Ambac, and other creditors, have threatened to file suit.
Sources agree that Orr's deal with creditors, widely reported to be Bank of America Corp. and UBS AG, to pay a $344-million swap with a $255-million debtor-in-possession loan, is instrumental in the timing of the potential bankruptcy filing.
The deal gives the city access to $11 million a month in casino tax revenues that Orr has said is key to maintaining city services while negotiations, in or out of bankruptcy court, take their course with other creditors and unions.
Plunkett Cooney bankruptcy lawyer Doug Bernstein, who is not involved in the bankruptcy and is not representing any parties related to it, said Thursday he had no direct information about whether or when the city would file, but said he understands the strategy if the city were to do so Friday or perhaps over the weekend.
On Monday, an Ingham County Circuit Court judge is scheduled to hold a hearing on the city workers' and retirees' challenge to stop the city from filing bankruptcy.
The employee groups, and separately the city's two pension funds in another lawsuit, argue that the governor — who under Michigan law must authorize any bankruptcy filing — cannot do so if the filings include plans to reduce pension benefits, because the state's constitution explicitly protects public pensions.
Bernstein said preventing the court hearing Monday is probably a key part of the strategy behind a Chapter 9 petition by the city, because a ruling in favor of the employees could put a halt, at least temporarily, to any moves by Orr and Snyder to proceed with a bankruptcy petition. A bankruptcy filing immediately stays all such court proceedings.
"The stay kicks in as soon as the filing, whether it's Friday or Monday," Bernstein said. "The key is taking advantage of the automatic stay. Because of the lawsuit filed by the pension funds and the hearings coming up Monday, it became a factor, so to the extent that (Orr) wanted to continue negotiations with creditors, now the city is forced to" file a Chapter 9 petition.
The 30- to 90-day eligibility fight could be prolonged beyond that time frame if creditors mount a significant challenge to Detroit's eligibility for bankruptcy. In other communities that have filed for Chapter 9 protection, such fights have extended the process a year or more, including Jefferson County, Ala., and Stockton, Calif., two of the largest municipal bankruptcy filings so far in the United States.
Detroit's would be by far the largest municipal bankruptcy in U.S. history, in terms of the city's population of about 700,000 and the amount of its debts and liabilities, which Orr has said could be as high as $20 billion. Because of the stakes involved, and the impact on residents statewide, as well as 30,000 current and retired city workers and Detroit's ability to stay in business, the case could be precedent setting in the federal judiciary. It could also set an important trajectory for the way troubled cities nationwide settle their financial difficulties.
Bernstein noted that Orr has said repeatedly his office would "negotiate with creditors until and unless we find that the negotiations won't bear fruit, with the understanding that the city has a limited amount of time" for those talks.
Downtown Detroit is gentrifying right now, attracting new residents and jobs. There are some blocks where you feel you could be in downtown Toronto: all the buildings are occupied, it's orderly and reasonably clean and the streetscape is a similar mix of architecture as in Toronto. But it has a long way to go as the number of parking lots and especially multi-storey parking garages rivals the number of actual buildings.
The rest of the city is depopulating and apparently further decaying. One can be optimistic for Detroit in that a strong downtown can do a lot, attracting more investment to spill outward into the surrounding areas--some of which are still good neighbourhoods. One thing that Detroit nailed was the revitalization of Campus Martius Park. It's hard to think of a comparable public space in Toronto so central, with a bold monument and fountain, a restaurant and bistro tables everywhere. The urban design is exemplary.
Downtown Detroit is gentrifying right now, attracting new residents and jobs. There are some blocks where you feel you could be in downtown Toronto: all the buildings are occupied, it's orderly and reasonably clean and the streetscape is a similar mix of architecture as in Toronto. But it has a long way to go as the number of parking lots and especially multi-storey parking garages rivals the number of actual buildings.
The rest of the city is depopulating and apparently further decaying. One can be optimistic for Detroit in that a strong downtown can do a lot, attracting more investment to spill outward into the surrounding areas--some of which are still good neighbourhoods. One thing that Detroit nailed was the revitalization of Campus Martius Park. It's hard to think of a comparable public space in Toronto so central, with a bold monument and fountain, a restaurant and bistro tables everywhere. The urban design is exemplary.
It wasn’t de-industrialization that bankrupted Detroit, wrote Paul Krugman in a New York Times column yesterday. If that was all there is to it, then how do you explain the fact that Pittsburgh, once so dependent on the steel industry, is now recovering? No, what brought Detroit to this low point, more than the loss of factory jobs, was decades of unsustainable development patterns.
A generation ago, Pittsburgh and Detroit were in similar straits, but Pittsburgh managed to keep its central city relatively strong, while the Detroit region saw a full-scale exodus from the city core. That allowed Pittsburgh “to adapt to changing circumstances,†wrote Krugman:
Detroit’s disaster isn’t just about industrial decline; it’s about urban decline, which isn’t the same thing. Sprawl killed Detroit.
And he’s right. There are many factors that distinguish Detroit from Pittsburgh, but the sprawl factor can’t be ignored. Very simply, Detroit’s assets can no longer keep up with its liabilities. Plenty of cities have pension obligations, but what Detroit lacks, more and more, is a tax base. And that is directly tied to the way the region developed over the last few decades — namely, further and further from Detroit.
A study released by the Brookings Institution this year found that Detroit has the worst job sprawl in the country. Now, many regions are sprawling, but Detroit is unusual, because it sprawled while the region wasn’t growing. The Detroit metro region, including its suburbs, has shrunk in population by 1.2 percent since 1970.
When the Detroit region sprawled, it wasn’t adding new people, the way Houston sprawled. It was drawing existing residents from the center to the periphery. Homes in the central city were abandoned — and the tax revenues that came from those households evaporated. Detroit, unlike some of its wealthy suburbs in Oakland County, only saw one side of this migration — the losing side. And it was poorly equipped to deal with the fallout.
The Washington Post reported earlier this month that in just the last five years, Detroit’s property tax collections declined 20 percent and its income tax revenues fell by a third. How does a city prepare for that? The answer is, it can’t, no matter how savvy the management may be.
The really discouraging part is, an emergency manager stripping people of their pensions won’t fix the long-term revenue drain at the heart of Detroit’s fiscal problems. On top of that, metro Detroit still does not seem to have mustered the political will to change what needs to be changed — its sprawling development patterns.
A telling example came last month when the Southeast Michigan Regional Council of Governments — the regional planning body — decided to greenlight some $4 billion in highway widenings, over the protests of Detroit, a handful of its inner-ring suburbs, and Ann Arbor. The regional agency justifies these highway widenings by citing congestion — congestion that was caused by people and jobs moving ever further from the city center. So this expense — $4 billion in public funds — will simply keep feeding the sprawl machine without addressing any of Detroit’s very pressing problems.
And here the federal government — in addition to the regional government — deserves part of the blame. Some of SEMCOG’s leaders, in relating their decision on the matter, expressed concern that the region would lose federal dollars if they voted down the highway projects. The sad truth is, they might be right. The federal government, even with the progress the Obama Administration has made, doesn’t say no to wasteful, sprawl-inducing highway projects. So while Detroit’s roads become increasingly potholed, the region has a perverse financial incentive to appeal to the federal government for more money to build more roads.
Andrew Burleson at the nonprofit Strong Towns wrote earlier this month that Detroit’s bankruptcy is a symptom of the “Growth Ponzi Scheme†— the essence of which is that we’re building and building without considering whether we can provide for the long-term maintenance costs of it all. The problem is that the pattern isn’t unique to Detroit, but a feature of the way we’ve been designing places around the country. Detroit is simply an extreme example, he says:
The truth is, people everywhere are afraid of what’s happening in Detroit, because to one extent or another we’re all Detroit. In every part of the country we’ve spent trillions of dollars on infrastructure to promote unproductive places that will be dead weight on our backs.