Detroit’s assets: how they could be impacted by the city’s financial crisis & possible bankruptcy
Detroit’s Emergency Manager Kevyn Orr has a plan to dig Detroit out of debt–a debt that some say could go as high as $20 billion.
But it may not be enough, and that likely puts us on the brink of bankruptcy.
In the first part of our special series, Detroit 2020 looks at the city’s major assets, and how they could be affected.
Detroit is a city filled with precious assets…assets that many people want to protect
Belle Isle…The Detroit Institute of Arts…
And with a possible Chapter 9 bankruptcy looming for the city…some are concerned…those gems will be out of Detroit’s hands.
“You would absolutely gut the heart and sole of Detroit if you made them sell the art work at the DIA…if you took Belle Isle and sold it for developers,” said Oakland County Executive L. Brooks Patterson.
So what else does the city of Detroit own??
Joe Louis Arena…which sits on a prime piece of riverfront property. With the Red Wings planned move to a new entertainment district along Woodward in a few years…could that be on the block? The city is evaluating alternatives.
Coleman Young Airport will likely be kept to avoid a costly fee to the federal government.
Parking garages and lots..and metered parking spaces—thousands of ‘em. The city’s parking department is projected to lose nearly $6 million this fiscal year.
So Detroit may sell or lease the spaces and meters to private operators.
And then there’s the water department.
“This is the point at which Detroit’s financial crisis really hits home for all of us,” State Rep. Kurt Heise told Detroit 2020.
Detroit and 127 communities are served by Detroit’s water system…
Emergency Manager Kevyn Orr wants to turn the city’s water and sewerage department into a regional authority. That could save the city more than 50 million dollars every year.
But Heise, from Plymouth Township, wants to make sure everyone has enough representation on a new board. “It really is taxation without representation if we are going to be paying directly to DWSD or the city for the right to use the system, then I think the communities, including the people of Detroit, deserve a greater say in how the system is run,” he said.
So if there’s a regional authority, what would happen with water rates? “If we don’t have oversight, if we don’t have accountability, I’m afraid that water and sewer rates are going to go up, in order to bail out Detroit and help them with their financial situation,” Heise said.
As for Belle Isle…it costs the city about $6 million a year to maintain and operate.
Earlier this year…there was a plan to lease it to the state…and turn it into a state park. But when city council failed to vote on it…the plan was scrapped.
But now…under Orr’s plan…it’s back on…as the city plans to lease it to the state…on the same terms as the earlier proposal.
Bankruptcy attorney Doug Bernstein believes it’s at least part of the solution. “It’s a piece of the puzzle…but if you have enough six million dollar savings, they add up for the whole,” Bernstein said.
In the debate over Detroit’s assets, perhaps nothing has sparked more of a firestorm than the possibility that the art collection at the DIA could be sold. The museum says the art is held by a public trust…and can’t be used for any other purpose than exhibition or to enhance and maintain the collection.
So is the sale of D-I-A art on the table?
“We’re going to confront what the DIA role, if any, plays in this process in due course. But for purposes right now, we’re not going to speak to the DIA,” Orr said.
There are no comments on this entry.