Detroit Bankruptcy Ruling | MiWeek Full Episode


   >>DETROIT IS
OFFICIALLY BANKRUPT. WHAT WILL THIS MEAN FOR CITY
RETIREES, WHAT ASSETS ARE ON THE TABLE, AND WHAT WILL THE
CITY LOOK LIKE IN A YEAR? JOIN US RIGHT NOW FOR MiWEEK.
>>>MICHIGAN’S TURNAROUND IS BEING POWERED BY THINGS WE
DO BETTER THAN ANYWHERE ELSE IN THE WORLD.
TODAY’S GLOBAL LEADERS ROUTINELY TURN TO MICHIGAN
TO WORK ON THEIR MOST DIFFICULT PROBLEMS, BECAUSE
THE ENGINEERING TALENT THIS THIS PART OF THE WORLD IS
SIMPLY THE BEST. SO MANY POSSIBILITIES LIE
AHEAD FOR MICHIGAN’S FUTURE. THESE OPPORTUNITIES ARE HERE
AND STARTING TO HAPPEN. THE VISION FOR
THE NEW MICHIGAN. SHARE IT.
TALK IT UP. DRIVE IT HOME.
>>>FUND IS ALSO PROVIDED BY DELTA.
§ §
>>GOOD EVENING, AND SANKZ FOR — THANKS FOR
JOINING US FOR MiWEEK. I’M CHRISTY McDONALD.
IT’S THE STORY MAKING HEADLINES AROUND THE WORLD:
DETROIT IS BANKRUPT THE. THE JUDGE RULED THIS WEEK
THE CITY IS ELIGIBLE FOR BANKRUPTCY PROTECTION.
IN A SURPRISE MOVE, THE JUDGE ADDRESSED THE QUESTION
OF PENSION: HE SAID THEY’RE LIKE ANY OTHER CONTRACT IN
BANKRUPTCY COURT THAT CAN BE RESTRUCTURED.
NOW IT’S ALL IN DETROIT EMERGENCY MANAGER KEVYN ORR’S
HANDS, ALONG WITH A TEAM OF LAWYERS, TO CRAFT A PLAN FOR
FINANCIAL ORGANIZATION. IT’S NEVER BEEN DONE BEFORE
IN A CITY THIS SIZE.>>WHAT I WOULD ASK FROM OUR
LABOR PARTNERS TO COME FORWARD WITH US AND TO TAKE
THIS OPPORTUNITY EVEN IN THE PROCESS OF LITIGATION AND
APPEALS TO TRY TO GET AT THE SORELY NEEDED REFORM THAT
THIS CITY HAS GOT TO ACHIEVE SO WE CAN MOVE FORWARD
INTO A NEW DAY, AND WE CAN PREPARE, HOPEFULLY, A
CONSENSUAL PLAN OF ADJUSTMENT AND BE ABLE TO
REMOVE THE RECEIVERSHIP OVER THE CITY SO THEY
CAN GROW AND THRIVE.>>THE GOVERNOR SAID TODAY
THE FEDERAL COURT ALLOWED DETROIT TO STAY ON THE PATH
TOWARD A BRIGHTER FUTURE, WHERE STREETLIGHTS WORK
AND AMBULANCES RESPOND QUICKLY, A CRIME WHERE —
A FUTURE WHERE CRIME AND BLIGHT SHRINK.
THIS WAS A DIFFICULT DECISION, BUT IT WAS THE
LAST VIABLE OPTION TO PROVIDE DETROIT’S
RESIDENTS WITH THE SERVICES THEY NEED AND DESERVE.
WE ARE TALKING BANKRUPTCY TONIGHT — THE PROCESS, WHAT
NEGOTIATIONS ARE HAPPENING RIGHT NOW, WHAT WILL HAPPEN
TO ART AT THE D.I.A., HOW MUCH WILL RETIREES LOSE, AND
WHAT DOES THIS MEAN FOR DETROITERS — IMPROVEMENT OF
DAILY SERVICES AND THE FUTURE OF CITY LEADERSHIP?
WHAT AFFECTS THE LARGEST CITY IN OUR STATE
AFFECTS ALL OF US. JOINING ME ARE MiWEEK
CONTRIBUTORS, NOLAN FINLEY OF THE DETROIT NEWS AND
STEPHEN HENDERSON OF THE DETROIT FREE PRESS.
GOOD TO SEE YOU.>>GOOD TO BE HERE.
>>THIS HAS BEEN A YEAR OF MILESTONES.
THIS HAS BEEN A HUGE DAY FOR DETROIT WHEN THERE WAS A
CONSENT AGREEMENT, WHEN THEY APPOINTED AN EMERGENCY
MANAGER, AND THE FILING, AND NOW THIS NEXT MILESTONE T.
WASN’T A SURPRISE, JUDGE RHODE’S RULING THIS WEEK.
>>NO, I THINK EVERYONE ASSUMED DETROIT, IF ANY
PLACE WAS, WAS ELIGIBLE FOR BANKRUPTCY.
THE JUDGE SAID IT SHOULD HAVE BEEN IN
BANKRUPTCY YEARS AGO.>>THAT STRUCK ME.
HE SAID DETROIT SHOULD HAVE AND COULD HAVE
FILED YEARS AGO.>>IF THEY HAD, THEY WOULD
BE IN A LOT BETTER SHAPE. HE SAID IF THEY HAD SIMPLY
STOPPED BORROWING TO PAY TODAY’S BILLS, IN OTHER
WORDS, STOP BORROWING TO PAY OPERATING COSTS, THEIR DEBT
WOULD BE $700 MILLION, AND THIS WOULDN’T HAVE BEEN
NECESSARY, BUT DETROIT JUST KEPT BORROWING FROM TOMORROW
TO PAY TODAY’S BILLS, AND NOW TOMORROW IS GONE.
>>THE JUDGE SPOKE ABOUT 1-1/2 HOURS WHEN HE
GAVE HIS RULING.>>HE MADE CLEAR THIS IS A
VERY STRAIGHT-LACED, RULE-OF-LAW JUDGE WHO WAS
NOT GOING TO LET THE EMOTIONS OF THE ISSUE
INTO HIS RULING AND INTO HIS COURTROOM.
HE MADE VERY CLEAR THAT FINANCES ARE WHAT THEY
ARE, AND THERE IS NO WAY TO ARGUE ABOUT THEM.
IT AMAZES ME THE NUMBER OF PEOPLE WHO STILL WANT TO
ARGUE ABOUT WHETHER WE OWE 18.5 BILLION OR WHETHER IT’S
12 BILLION OR 6 BILLION — WHAT DOES IT MATTER?
WE DON’T HAVE ANY OF IT! WE DON’T HAVE A DOLLAR.
I MEAN, AS THE JUDGE POINTED OUT, THEY WERE ABOUT TO RUN
OUT OF MONEY WHEN THEY FILED FOR BANKRUPTCY.
I THINK HE DID A VERY GOOD JOB OF ELIMINATING ALL OF
THAT STUFF, ALL OF THIS WHITE NOISE THAT HAS
SURROUNDED THIS, THAT’S EMOTIONAL AND POLITICAL AND
SAID “THESE ARE THE FACTS ON THE GROUND, AND IF ANY CITY
QUALIFIES FOR CHAPTER 9 PROTECTION, DETROIT IS AT
THE FRONT OF THAT LINE.”>>AND YOU KNOW, EVERYONE
HAS SAID, WELL, THIS IS A SAD, TRAGIC DAY FOR DETROIT,
AND IT IS THAT, BUT IT’S ALSO A VERY HOPEFUL
DAY FOR DETROIT. IF IT CAN GET OUT FROM
UNDER TWO-THIRDS OF THAT DEBT OR MORE, IT HAS A
CHANCE TO BUILD A VIABLE CITY FOR THE LONG TERM.
THERE IS NO WAY IT COULD KEEP PAYING 40% OF ITS BILLS
NOUT DEBT SERVICES, AND CITY NEEDS, AND
ATTRACT RESIDENTS.>>AND CHAPTER 9, WHICH
PROTECTS GOVERNMENT ENTITIES, IS VERY DIFFERENT FROM
CHAPTER 7 OR 11, IN WHICH PRIVATE — OR PUBLIC
CORPORATIONS CAN ESSENTIALLY BE STRIPPED CLEAN, AND THERE
IS NO PROVISION THAT SAYS THEY HAVE TO EVEN
SURVIVE THE PROCESS, AND OFTEN DON’T.
>>THIS CITY HAS TO SURVIVE.>>CHAPTER 9 SAYS THE
PROCESS IS SUPPOSED TO BE DESIGNED TO MAKE SURE YOU
HAVE A VIABLE CITY WHEN YOU COME OUT ON THE OTHER SIDE.
THERE’S AN ENORMOUS AMOUNT OF PROTECTION FOR THE
CITY IN THIS PRACTICE.>>IT REALLY IS SLANTED
TOWARD THE CITY AND AWAY FROM THE CREDITORS, WHICH IS
A REVERSE OF PRIVATE-SECTOR BANKRUPTCY, BUT, YOU KNOW,
WE SAW THIS WEEK THE UNIONS PROTESTING OUT IN
FRONT OF THE BUILDING. YOU CAN’T BLAME THEM.
THEY’RE GOING TO BE ASKED TO TAKE THE BIGGEST HIT HERE,
BUT YOU ALSO SAW FOLKS CARRYING SIGNS, “HURT
THE BANKS, NOT US.” PEOPLE ARE MISSING
THE POINT. THE BANKS ARE GETTING
HURT BIG-TIME. THEY’RE GOING TO WALK AWAY
WITH TEN CENTS ON THE DOLLAR OR LESS.
I DON’T KNOW HOW MUCH MORE YOU CAN HURT THEM.
>>BUT YOU CAN’T PUT A FACE ON THEM.
>>BUT YOU CAN’T PRETEND THERE IS SOMEPLACE ELSE TO
GET THE MONEY, BECAUSE THE BANKS ARE GIVING UP
MOST OF THEIR DEBT. EVEN IF THEY GAVE UP 100% OF
WHAT’S OWED THEM, DETROIT WOULD STILL BE BROKE.
>>THE JUDGE SAID THE PENSIONS ARE CONTRACTS LIKE
ANY OTHER CONTRACT THAT CAN BE RESTRUCTURED,
REGARDLESS OF WHAT THE STATE CONSTITUTION SAID.
DID THAT COME AS A LITTLE BIT OF A SURPRISE TO YOU
THAT HE ADDRESSED THIS EARLY ON BEFORE ANY RESTRUCTURING
PLAN WAS FILED? HE COULD HAVE WAITED, BUT
IT HE SAID IT DIRECTLY OUT IN THIS DECISION.
>>IF WAS UNEXPECTED, I THOUGHT HE WOULD DEAL WITH
IT LATER, BUT IT WAS SMART TO SETTLE THAT NOW, TO
SETTLE EVERYTHING AT ONCE, TO GET ALL OF THE APPEALS
GOING AT THE SAME TIME, TO EXPEDITE THIS PROCESS.
THE LAST THING ANYBODY WANTS IS FOR THIS TO DRAG OUT FOR
THREE, FOUR YEARS.>>THERE IS SOMETHING IN THE
STATE CONSTITUTION WHICH SAYS —
>>WELL, JUDGE RHODES SAID IN TERMS OF FEDERAL LAW, THE
STATE CONSTITUTION DOESN’T HOLD SWAY.
THE BANKRUPTCY CODE IS THE SUPREME LAW OF THE LAND
ON THIS MATTER. BUT THAT DOES NOT MEAN, FOR
INSTANCE, THAT THERE AREN’T OBLIGATIONS THAT HAVE TO BE
MET AND THAT THE STATE COURTS, FOR EXAMPLE, CAN
ENFORCE THOSE OBLIGATIONS AGAINST THE GOVERNOR AND
THE LEGISLATURE. YOU’VE GOT THIS OPINION BY
BILL SCHUETTE, OUR ATTORNEY GENERAL, SAYING THIS
PROVISION MATTERS, AND THIS IS A VERY IMPORTANT PART.
WHEN WE START PICKING AND CHOOSING WHICH PARTS OF THE
CONSTITUTION WE’RE GOING TO HONOR OR DISHONOR, WE
BECOME A NATION OF MEN AND NOT LAWS.
THIS IS IS A NATION OF LAWS, AND FEDERAL COURTS HOLD SWAY
OVER STATE PROVISIONS IN TERMS OF FEDERAL COURT,
BUT THAT DOES NOT APPLY ACROSS THE BOARD AT
THE STATE LEVEL.>>DO YOU AGREE WITH HIM?
>>WELL, NOT ENTIRELY. YOU CAN’T BUILD INTO YOUR
INSTITUTION RUNAROUNDS OF FEDERAL LAW.
YOU CAN’T SHIELD YOURSELF FROM FEDERAL LAW BY WRITING
THINGS INTO YOUR STATE CONSTITUTION.
THE JUDGE SAID THE SUPREME COURT HASN’T RULED ON THIS,
AND HE TRIED TO ANTICIPATE THE WAY THE STATE
SUPREME COURT WOULD RULE. WHAT HE HINTED AT: IF HE
WIPES THIS DEBT AWAY FOR DETROIT, IF HE CLEANSES THEM
OF THIS RESPONSIBILITY, IT DOESN’T MEAN THE STATE
CONSTITUTION MIGHT NOT KICK IN TO TRANSFER THAT
OBLIGATION TO THE STATE SO THAT THE STATE THOOZ PICK UP
THESE CONSTITUTIONALLY GUARANTEED —
>>WELL, AND THAT’S WHAT –>>OBLIGATIONS, AND THAT —
>>WELL, THAT’S WHAT OUR STATE CONSTITUTION SAYS.
>>THAT WOULD BE A TREMENDOUS SHIFT OR
DEVELOPMENT, BECAUSE YOU HAVE A LOT OF OTHER
COMMUNITIES WHO WOULD LIKE TO DO THE SAME THING.
>>I’M SURE YOU HAVE CITIES AROUND THE COUNTRY WHO ARE
WATCHING THIS HAPPEN SNOON AND THAT’S THE
PRECEDENT-SETTING PIECE OF THIS.
I MEAN, HOW MUCH OF STATE LAW CAN BE UNDONE IN A
FEDERAL BANKRUPTCY COURT WHEN IT COMES TO
MUNICIPAL BANKRUPTCIES.>>LET’S TALK ABOUT SOME OF
THESE RETIREES, MANY OF WHOM WERE VERY DISAPPOINTED,
OBVIOUSLY, BUT ALSO SHOCKED THAT THIS DECISION WAS MADE.
WERE THEY LIVING IN DENIAL THAT THIS WAS A POSSIBILITY?
>>I THINK A LOT OF PEOPLE DON’T UNDERSTAND
THE COURT PROCESS. THEY SEE THE STATE
CONSTITUTION, THEY SEE THAT PROTECTION THAT’S WRITTEN
VERY EXPLICITLY IN IT, AND THAT’S THE END OF
THE STORY FOR THEM. THEY DON’T UNDERSTAND THE
RELATIONSHIP BETWEEN THE STATE AND FEDERAL LAWS, AND
THAT’S WHAT JUDGE RHODES WAS TRYING TO EXPLAIN, IS THAT
OUR SYSTEM OF GOVERNMENT, YOU KNOW, WITH THE
SUPREMACY CLAUSE, SAYS THAT FEDERAL LAW HOLDS SWAY
IN FEDERAL COURT. I THINK IT IS DISAPPOINTING.
THE FEAR THAT THEY HAVE IS REAL AND JUSTIFIED, BUT,
AGAIN, I BELIEVE VERY STRONGLY NOT ONLY IN FEDERAL
LAW BUT ALSO IN OUR STATE CONSTITUTION TO BE ABLE TO
PROVIDE FOR FULFILLMENT OF THOSE OBLIGATIONS, AND I
SUSPECT THAT’S THE WAY IT’S GOING TO COME DOWN.
>>JUDGE RHODES SAID TO THE CITY MORE THAN TREAD LIGHTLY,
THAT HE’S NOT GOING TO SIGN OFF ON ANY AGREEMENT THAT
TOTALLY GUTS THE PENSIONS. WHAT DO YOU THINK THE
DISCUSSION IS GOING TO BE?>>I THINK THERE’S A LOT OF
THINGS GOING ON RIGHT NOW IN AN EFFORT TO MITIGATE
THE IMPACT ON PENSIONS. I MEAN, EVERYBODY
UNDERSTANDS: THESE FOLKS LIVE ON THESE PENSIONS, AND
FOR A LOT OF THEM, IT’S THEIR OWN SOURCE OF INCOME,
AND THESE ARE REAL PEOPLE WHO WILL SUFFER REAL
CONSEQUENCES IF THE PENSIONS ARE WIPED AWAY.
I SUSPECT THERE WILL BE SOME PENSION REDUCTIONS FOR BOTH
CURRENT AND FUTURE RETIREES. I THINK THE BIGGER HIT WILL
COME IN HEALTHCARE. THAT’S A $6 BILLION UNFUNDED
LIABILITY FOR THE CITY. I THINK THEY’LL GET DUMPED
ONTO THE OBAMACARE EXCHANGES, AND THAT’S GOING
TO COST THEM MONEY, TOO. I DO THINK THE RETIREES ARE
GOING TO PAY THE HEAVIER PRICE, HERE, AND I THINK
JUDGE JERRY ROSEN, WHO IS TRYING TO WORK WITH THE
FOUNDATIONS TO COME UP WITH A WAY TO LEVERAGE D.I.A. ART
TO BOTH PROTECT THE ART FROM SALE AND SAVE THE
PENSIONS — WE OUGHT TO BE PAYING A LOT OF ATTENTION TO
THOSE EFFORTS AND ENCOURAGING THE
FOUNDATIONS TO ENGAGE HERE AND MAKE IT HAPPEN.
>>ALL RIGHT, SO LET’S DIVE INTO THAT CONVERSATION ABOUT
THE ASSETS OF THE D.I.A. NEW REPORTS ARE COMING OUT
JUST THIS WEEK THAT THERE MIGHT BE A DEAL IN PLACE OF
FOUNDATIONS, LOOKING AT ABOUT $200 MILLION.
ORIGINALLY WE HAD TALKED ABOUT FIVE.
IS THAT STILL WHERE YOU THINK IT WILL BE, WHEN
THE CONVERSATIONS ARE AROUND TWO?
>>I THINK FIRST OF ALL, THE FOUNDATIONS —
EVERYONE THINKS, WELL, THE FOUNDATIONS JUST HAVE
MONEY, GIVE IT TO US. WELL, IT DOESN’T
REALLY WORK THAT WAY. THEY ALL HAVE BOARDS.
>>THEY ALL HAVE MISSION STATEMENTS ABOUT WHAT THEY
WANT TO GIVE FOR AND –>>THEY DON’T JUST
WRITE CHECKS. THE EFFORT IS TO TRY TO
RECONCILE THOSE MISSIONS AND THE MISSIONS OF THEIR BOARD,
THE EXPECTATIONS OF THEIR BOARDS, WITH SOMETHING LIKE
THIS, WHICH IS COMPLETELY UNPRECEDENTED.
I MEAN, I CAN’T THINK OF ANY OTHER SITUATION IN WHICH THE
NON-PROFIT COMMUNITY AND PHILANTHROPIC COMMUNITY HAS
BEEN ASKED TO COME IN AND MAKE GOOD ON THAT DEBT.
>>AND IT’S NOT LIKE YOU’RE ASKING PEOPLE “GIVE THIS
MONEY FOR AN ENDOWMENT THAT WILL SUPPORT
THIS INSTITUTION.” WHAT YOU’RE ASKING FOR THEM
IS “GIVE THIS MONEY FOR AN ENDOWMENT THAT WILL SUPPORT
PENSIONS SO THAT IT KEEPS THE WOLF AWAY FROM
THE ART.”>>EXPLAIN EXACTLY HOW THIS WOULD WORK.
>>I DON’T THINK ANYONE KNOWS.
>>WE DON’T KNOW YET. BUT WHAT THEY’RE LOOKING AT.
WHAT RHODES HAS BEEN LOOKING AT FOR WEEKS NOW IS A WAY TO
GET TO USE THE ART, WITHOUT SELLING IT, TO RAISE ENOUGH
MONEY TO OFFSET WHAT THEY’RE GOING TO NEED
FROM THE PENSIONS. AND BASICALLY WHAT IT WOULD
BE WOULD BE A FUND WHERE PEOPLE WOULD EITHER LEASE
THE ART AND GIVE IT BACK OR BUY THE ART AND GIVE IT BACK
TO THE INSTITUTION, BUY THE ART MUSEUM FROM THE CITY AND
PUT IT INTO A NON-PROFIT — THERE’S A LOT OF DIFFERENT
IDEAS BEING FLOATED AROUND, BUT BASICALLY, THEY’RE
TRYING TO GET LOCAL AND NATIONAL FOUNDATIONS TO COME
UP WITH THE MONEY TO PROTECT THE D.I.A. SFLOON I WAS
REMINDED THIS WEEK WHEN PEOPLE STARTED TALKING ABOUT
THIS, ABOUT SOMETHING THAT KEVYN ORR SAID VERY EARLY IN
THIS PROCESS, WHEN THE ART FIRST CAME UP, HE SAID “YOU
HE KNOW, PEOPLE VALUE THE MUSEUM, THEY DON’T WANT TO
SEE IT CLOSE OR THE ART GO AWAY, BUT DETROIT HAS
ESSENTIALLY HAWKED EVERYTHING IN THAT
MUSEUM SIX TIMES OVER, OVER ABOUT 40 YEARS.”
ESSENTIALLY NOW WHAT WE’RE TRYING TO DO IS GET IT OUT
OF HOC, AND IT’S A REALLY INNOVATIVE IDEA TO SAY TO
THE FOUNDATIONS, ESSENTIALLY, “TAKE US TO THE PAWN SHOP.”
>>”COME IN AND HELP US OUT.”
>>BUT IT CAN’T JUST BE JUDGE ROSEN AND THE
FOUNDATIONS WORKING THIS OUT.
THE D.I.A. HAS BEEN DRAGGING ITS FEET, VERY RELUCTANT TO
ENGAGE IN THESE TALKS, TO FIND SOLUTIONS, THEY’VE HAD
THEIR HEADS IN THE SAND TRYING TO PRETEND, YOU KNOW,
“YOU CAN’T TOUCH OUR ART.” KEVYN ORR SAID “I’M DONE
WITH THEM, THAT’S OUR ART, THAT’S OUR ASSET, AND WE’RE
GOING TO COME UP WITH A SOLUTION.”
>>HE HAS NEVER MET WITH ANY OFFICIAL AT THE
MUSEUM –>>WHY NOT?>>THAT’S A GREAT QUESTION.
HE HAS NOT MET WITH ANY OF THEM.
>>HE CLAIMS HE HAS SEND HIS FOLKS OVER THERE.
>>AND ALL THEY DO IS DEMAND MONEY.
>>AND THERE ARE PRESS RELEASES, THIS SOLUTION
WON’T WORK, THAT SOLUTION WON’T WORK.
>>WOULD IT BE DIFFERENT IF, RATHER THAN
SENDING PEOPLE –>>BUT HERE’S THE ISSUE: IF
YOU SELL A SINGLE PIECE OF ART OUT OF THAT MUSEUM, THE
FIRST THING YOU DO IS YOU AVOID THE MILLAGES WHICH
WORKED HARD LAST YEAR WHICH ESSENTIALLY
CLOSES THE MUSEUM. SELLING ONE PIECE OF ART IS
TANTAMOUNT TO SELLING IT ALL, AS A PRACTICAL MATTER.
>>AND THE JUDGE SAID IN THE RULING, HE CAUTIONED
THAT THAT WAS A TEMPORARY SOLUTION.
>>THAT’S WHAT THE ASK WAS, GET THIS $500 MILLION, AND
THE ONLY WAY TO RAISE THAT KIND OF MONEY, REALLY
S A SALE. SO THE MUSEUM HAS BEEN PUSHED
INTO A CORNER BY THE NEGOTIATORS, AND UNABLE TO
GET TO KEVYN TO SAY, HEY, THAT’S NOT GOING TO
WORK, WHAT ELSE MIGHT.>>SO CHRISTIE’S HAS BEEN
APRAISING THE ART, AND THEY’RE LOOKING AT A RANGE
OF 400 TO 800 MILLION. IS THAT LOW TO YOU?
>>YEAH, I THINK THEY LOW-BALLED THAT.
I THINK THAT’S GOING TO CAUSE A PROBLEM FOR THEM.
I THINK THE CREDIT YORDZ ARE — THE CREDITORS
ARE GOING TO SAY –>>THEY’LL WANT THEIR
OWN APPRAISAL?>>WELL, YOU’VE GOT ONE
PAINTING FOR THAT IN AUCTIONS, FOR GOD’S SAKES.
>>I THOUGHT THE NUMBER — THE NUMBER SHOCKED ME,
TOO, BUT IF YOU THINK OF IT THIS WAY, WHAT THEY’RE
LOOKING AT IS: WHAT WOULD HAPPEN IF YOU PUT ALL THAT
STUFF OUT THERE TOGETHER? ESSENTIALLY, YOU
WOULD GLUT THE MARKET. THERE ISN’T UNLIMITED
INTEREST OR MONEY –>>TO BUY ART OF
THAT CALIBER.>>IF YOU SOLD THESE PIECES,
YOU KNOW, 50 PIECES OUT OF THE MUSEUM, YOU WOULD
REDUCE THEIR MARKET VALUE SIGNIFICANTLY BY VIRTUE OF
DOING IT THAT WAY, AND I THINK THAT HAS SOMETHING TO
DO WITH THE NUMBER.>>SO THESE CONVERSATIONS
ARE ONGOING, AND WE’LL BE WATCHING THAT.
I WANT TO TALK A LITTLE BIT ABOUT THE UNIONS RIGHT NOW.
WE ALREADY HAVE AFSCME AND OTHERS, AND THEY’RE ALL
GOING TO HAVE TO SIT DOWN AND TALK TO KEVYN ORR.
HE SAYS NOW IS THE TIME FOR THE HEAVY LIFTING NOW
AND INTENSE NEGOTIATION.>>NOW IS THE TIME
TO GET IT DONE. IF THEY COME IN NOW AND GET
A DEAL DONE THAT THEY SIGN OFF ON, THEY’RE GOING TO BE
IN A LOT BETTER SHAPE THAN IF THEY WAIT AND HAVE
SOMETHING ENTERED INTO THE COURT HERE THAT THEY’RE
NOT SO CRAZY ABOUT. THEY COULD LOSE EVERYTHING.
>>DO YOU THINK THEY’RE GOING TO WAIT AND FIGHT?
>>I DON’T THINK IT WILL END UP BEING A FIGHT, BECAUSE
YOU CAN’T JUST SELL STUFF OUT OF THE MUSEUM, AND, YOU
KNOW, KEVYN DOESN’T WANT TO BE THE PERSON
WHO RUINED THE D.I.A. I MEAN, THINK ABOUT WHAT
THAT WOULD LOOK LIKE.>>THEY’RE TALKING ABOUT
COMING UP WITH CREATIVE SOLUTIONS, AND THAT’S ONE OF
THE POINTS I MAKE, IS THAT THE MUSEUM NEEDS TO BE PART
OF THIS, AND THEY NEED TO GET OVER THIS IDEA THAT
THEY CAN AVOID BEING PART OF THIS, AS DO THE UNIONS.
THE UNIONS HAVE DRUG THEIR FEET IN TERMS OF NEGOTIATING,
THEY’RE COUNTING ON BEING RESCUED SOMEHOW BY ANOTHER
COURT, THEY KEEP FILING LAWSUITS, MOTIONS.
THIS THING IS NOW GOING TO GO TO THE SIXTH CIRCUIT
WHERE I SUSPECT JUDGE RHODES’S RULING IS
GOING TO BE UPHELD. HE’S A GOOD JUDGE, HE MADE A
VERY CAREFUL RULING, AND THE UNION IS GOING TO BE FACED
WITH THE REALITY HERE THAT YOU GOT TO MAKE A DEAL.
>>EVERYONE — BUT THAT’S –>>THEY’RE VERY FRUSTRATED
ABOUT THIS INABILITY TO GET THE UNIONS TO COME TO ANY
SORT OF UNDERSTANDING THAT BANKRUPTCY IS A WHOLE
DIFFERENT ENVIRONMENT.>>THE INK’S NOT DRY ON THIS
OPINION YET, AND WHEN IT DOES DRY AND WHEN THE SIXTH
CIRCUIT SAYS THAT IT’S FINE, YOU’RE GOING TO SEE AN
ATTITUDE CHANGE AMONG ALL OF THE CREDITORS, BECAUSE AGAIN,
CHAPTER 9 IS STRUCTURED IN A WAY THAT GIVES THE CITY
TREMENDOUS ADVANTAGE OVER THE PEOPLE THAT IT OWES, AND
STRIKING A DEAL, CUTTING DEALS IS GOING TO BECOME
THE SORT OF PRIMARY MOTIVATION FOR EVERYBODY.
THAT’S THE BANKS, THAT’S THE PENSIONERS,
THAT’S GOING TO BE –>>THERE ARE KEY THINGS THAT
HAVE TO HAPPEN HERE. THIS ARRANGEMENT TO UNTANGLE
THE SWAPS DEAL THAT KWAME KILPATRICK MADE AND FREE
UP — MAKE SURE THAT CASINO MONEY IS FREE, THAT’S GOING
TO BE KEY TO THE ABILITY OF KEVYN ORR AND MIKE
DUGGAN TO CONTINUE RESTRUCTURING SERVICES
AND UPGRADING SERVICES.>>AND THAT LEADS TO THE
LAST PART OF THIS BIG PICTURE IS GETTING THE
MONEY AND MAKING SURE YOU HAVE THAT MONEY YOU CAN
INFUSE BACK INTO THE CITY, CITY SERVICES.
KEVYN ORR SAYS WE’RE GOING TO SEE IMPROVEMENTS WITH THE
LIGHTING GRID IN THE NEXT YEAR, THAT’S ONE OF THE
BIGGEST PLACES THAT PEOPLE WILL START TO SEE A CHANGE.
>>WELL, WE NEED TO SEE THAT CHANGE, AND WE NEEDED TO
BEFORE NOW, QUITE FRANKLY. IF YOU GO BACK TO WHEN HE
GOT HERE, HE WAS TALKING 60 TO 90 DAYS BEFORE
PEOPLE WOULD START TO NOTICE A DIFFERENCE.
THE STORY HAS CHANGED, AND THAT HAPPENS TO
EVERYBODY WHO COMES TO DETROIT WHO THINKS THEY CAN
FIX THIS VERY QUICKLY. THESE ARE COMPLEX PROBLEMS,
AND THEY DON’T HAVE EASY SOLUTIONS, THEY DON’T
HAVE CHEAP SOLUTIONS. HE’S MOVING THINGS, I THINK,
INTO PLACE THAT WILL PAY BIG DIVIDENDS FOR
DETROITERS DOWN THE ROAD. I WOULD CAUTION HIM
AGAINST PROMISING A QUICK RESULT ANYMORE, BECAUSE
THERE AREN’T — THE LIGHTING PROBLEM
IS UNBELIEVABLY COMPLEX.>>HE’S GOT TO DO SOMETHING
TODAY, IMMEDIATELY, ABOUT POLICE RESPONSE TIMES, AND
THEY KEEP BRINGING UP OH, WE’RE DOING BETTER,
WE’RE CUTTING CRIME IN THE DOWNTOWN
PHOTOGRAPHER. THERE WAS A TIME PHOTOGRAPHER
DOWNTOWN, A VERY WELL KNOWN PHOTOGRAPHER WAS SHOOTING
PICTURES FROM THE MAGAZINE. HIS CELL PHONE, CAMERA
EQUIPMENT, EVERYTHING, GOT STOLEN.
HE TRACKED IT BACK TO A HOUSE IN DETROIT.
HE CALLED POLICE, SAID I’M STANDING IN FRONT OF THE
HOUSE, I’M GETTING A SIGNAL FROM MY CELL PHONE, I KNOW
WHERE IT’S AT. POLICE SAID WE DON’T COME
OUT ON THOSE KINDS OF CALLS. YOU CAN’T HAVE PEOPLE DPULG
A CRIME AND HAVING THE POLICE SAY WE DON’T RESPOND.
>>AND THINGS LIKE THAT –>>THAT’S THE PROBLEM, AND
IT’S REALLY UNFORTUNATE THAT THAT HAPPENED
TO THIS GUY WHO IS A VISITOR, BUT THE TRUTH IS
DETROITERS HAVE THAT EXPERIENCE EVERY DAY.
>>PEOPLE ARE NOT GOING TO STAY. THEY’RE NOT GOING TO WAIT.
>>YOU CANNOT GET POLICE TO RESPOND TO CRIME UNLESS IT’S,
YOU KNOW, EMERGENT. THIS IS THE POLICE
DEPARTMENT THAT RUNS FROM EMERGENCY TO EMERGENCY
WITHOUT DOING, YOU KNOW, THE KIND OF CRIME PREVENTION
THAT WE NEED, WITHOUT RESPONDING TO THE KINDS OF
QUALITY OFLIFE ISSUES THAT KEEP PEOPLE IN NEIGHBORHOODS,
YOU’RE STARTING TO SEE BIG-SPLASH KINDS OF THINGS
THAT CHIEF CRAIG IS DOING, BUT YOU ARE REALLY TURNING A
FREIGHTER, YOU KNOW, AROUND 180 DEGREES.
THAT ALSO IS GOING TO TAKE TIME.
YOU’RE NOT GOING TO SEE –>>HOW MUCH TIME PEOPLE ARE
GOING TO GIVE IT, AND THEN PEOPLE DOAN WANT TO MOVE
INTO THE CITY, AND YOU NEED YOUR TAX REVENUE, AND IT’S A
BIG CIRCUMSTANCEAL.>>YOUR NEIGHBOR GETS BROKE
INTO, AND YOU START THINKING MAYBE I SHOULD LEAVE, THE
NEIGHBOR THINKS MAYBE I SHOULD LEAVE, IT
BUILDS ON ITSELF.>>AND IT’S A MASSIVE STORY
THAT, OF COURSE, WE’RE GOING TO CONTINUE TO FOLLOW.
GENTLEMEN, THANK YOU SO MUCH.
THAT WILL DO IT FOR MiWEEK. THANKS FOR WATCHING.
HEAD TO MiWEEK.ORG FOR ANY SHOWS YOU MIGHT HAVE MISSED,
PLUS NOLAN AND STEPHEN’S COLUMNS FROM THE WEEK.
FIND US ON FACEBOOK AND TWITTER.
THAT WAY YOU CAN GET YOUR MiWEEK FIX BEFORE NEXT
THURSDAY NIGHT. I’M CHRISTY McDONALD.
FOR ALL OF US AT DETROIT PUBLIC TV, THANKS
FOR JOINING US. SEE YOU NEXT WEEK.
CAPTIONING PROVIDED BY CAPTION SOLUTIONS, LLC
WWW.CAPTIONSOLUTIONS.COM  

Leave a Reply

Your email address will not be published. Required fields are marked *