Detroit Has A Consent Agreement. What’s Next?

Spirit of Detroit. Credit: flickr user Urban Adventures.

After weeks of debate and sometimes raucous dissent, leaders in Detroit and Lansing finally signed off on a financial stability agreement for the city yesterday.

You can read the full agreement here. But as important as the agreement is, it doesn’t actually solve any of Detroit’s pressing financial problems. It merely lays out the structure and the powers of the new group that will.

So today is when the real work begins.

The Detroit Free Press reports today that the first step in the process is to hire 11 people. Mayor Dave Bing is in charge of finding the first two:

Mayor Dave Bing now has six days to create the positions of the city’s chief financial officer and program management director and 30 days after that to hire the people for the positions. Those holding the jobs must have experience in municipal finance and balancing the books of a government operation of at least $250 million. The candidate list and ultimate hires will have to be approved by Snyder and Bing.

The mayor, governor, state treasurer and city council will also each have a say about who goes on the nine-member financial advisory board that will oversee the city’s finances for the next few years.

Once the team is in place, the next big question is how to salvage Detroit’s finances. That’s where things may get ugly. Continue reading “Detroit Has A Consent Agreement. What’s Next?”

Midwest Memo: Detroit Assembles A Team, Indiana’s Accounting Errors And Chicago’s Tourism Offices

Detroit looking for accountants Detroit has a deal to avoid state takeover. Now, the Detroit Free Press reports leaders have to pick the members of the new panel that will oversee the city’s finances.

Whoopsie An error by the state of Indiana shortchanged county governments by $206 billion over the last year, according to the Indianapolis Star. The paper says it’s the second budget error announced by the state in the last four months. The two mistakes amount to half a billion dollars in accounting miscalculations.

Poised to strike Partner station WBEZ reports teachers at more than 150 Chicago schools are ready to go on strike, if contract negotiations with the Mayor’s office fail. Mayor Emanuel is pushing for a longer school day, a new calender and new teacher evaluations.

Appealing to tourists The city of Chicago will open new tourism offices in Brazil, Germany and Japan this year, according to the Chicago Tribune. Last year, the city launched tourism offices in London, Toronto and Mexico City.

It can happen anywhere WKSU found new oil and gas drilling happening in some unexpected places in Ohio. One of the sites for a new “fracking” operation in the state is right under a school.

Midwest Memo: Detroit Has A Deal, Chicago Has Crippling Debt And Ohio Has Bulldozers

Detroit’s deal Last night, the Detroit City Council voted to approve a consent agreement with the state to avoid takeover by an emergency manager. That means, as long as the governor signs the deal as expected and the courts don’t strike the deal down, Detroit finally has the first step in a plan to avoid bankruptcy. Partner station Michigan Radio reports on what it all means.

Chicago’s debt problem The Chicago Sun-Times went looking for reasons why Chicago would turn to private partnerships to fund its new multi-billion dollar plan to rebuild infrastructure. One major reason: the city’s staggering debt. Chicago can’t take out any more bonds to pay for improvements because the city spends almost 23 percent of its annual budget paying off the $7.3 billion in debt it already has.

Illinois’ turn Illinois is getting into the fracking game. Crain’s Chicago Business says the state could see a natural gas-drilling “boomlet” as companies explore southern Illinois for possible drilling.

Bulldozing blitz Partner station WCPN Ideastream had a story on NPR’s Morning Edition today that looks at the effort to tear down vacant houses in Ohio. The state set aside $75 million from its share of the $25 billion nationwide mortgage fraud settlement to pay for demolitions.

No more coal ash The Ludington Daily News reports the city’s historic car ferry has received a grant to convert its fuel source. Without the grant, the coal powered ferry would have been forced to shut down by the EPA. The historic vessel dumps about 500 tons of coal ash into Lake Michigan every year.

#goodnewsforDetroit Twitter says it will open a new office in Detroit. Michigan Radio’s Jennifer Guerra reported the news in tweet form. You have to hear it.

Midwest Memo: Still No Deal In Detroit, Indiana’s Welfare Woes And Ohio Gas Stats

Still no deal Partner station Michigan Radio reports the Detroit City Council decided not to vote last night on a proposed consent agreement with the state to resolve the city’s financial crisis. A judge has blocked any agreement from going forward. Michigan governor Rick Snyder is appealing that decision. If no deal is reached by the end of the day tomorrow, Detroit will likely face a takeover by an emergency manager.

Indiana in court The state of Indiana is facing off in court with IBM over who was at fault when a $1.4 billion deal to handle the state’s welfare caseload went bad. IBM says the state broke off the deal because of budget problems. A lawyer for the state says IBM failed to meet its obligations, according to the Associated Press. The Department of Labor lists Indiana as the worst state in the nation when it comes to improper payments for welfare assistance. The DoL says Indiana has a 44% improper payment rate. The state disputes that number.

Groupon’s bad week It’s been a rough couple of days for Chicago-based Groupon. The coupon website was forced to revise its previous financial statements, and admit it has “material weakness” in its accounting practices. The SEC is reportedly looking into the problems. And now, the Chicago Tribune says a shareholder has filed a class action lawsuit.

A big fat check Whirlpool will write the state of Indiana an $800,000 check, after deciding to move jobs out of the state.

2.6 billion cubic feet That’s how much natural gas Chesapeake Energy pumped from Ohio shale formations last year, according to BusinessWeek.

Indie-Pop Band Dale Earnhardt Jr. Jr. Gives Its Take On Detroit’s Fiscal Crisis

Dale Earnhardt Jr. Jr. – We Almost Lost Detroit from Dale Earnhardt Jr. Jr. on Vimeo.

By the time you read this, Detroit leaders may have already reached a deal to avoid a state takeover. Or not. City council was scheduled to meet as of this posting to decide whether to sign a consent agreement with Michigan Governor Rick Snyder’s administration.

The agreement could still be blocked in the courts, causing further confusion and panic in a city that’s already had plenty of both. According to state statute, a deal must be signed by midnight Thursday, or the governor will be forced to appoint an emergency manager.

It is against this political and economic backdrop that the Detroit-based electronic indie-pop band Dale Earnhardt Jr. Jr. has decided to release its latest video for the song “We Almost Lost Detroit.”

As the band writes on its website:

“We Almost Lost Detroit” began for us as an homage to one of the great artists of our time, Gil Scott Heron. We were so affected by its continued relevance as a piece of work some 30+ years later that just simply attempting to reinterpret it as a creative exercise seemed like a good enough idea on its own. While the song was originally penned as a reaction to a partial meltdown of a nuclear reactor halfway between Detroit,MI and Toledo,OH, so much of the imagery contained in Gil’s words seemed to ring true with the news of today.

Continue reading “Indie-Pop Band Dale Earnhardt Jr. Jr. Gives Its Take On Detroit’s Fiscal Crisis”

After Tough Times, Detroit’s Hotel Pontchartrain Is Set For A Comeback

Detroit's Hotel Pontchartrain. Credit: flickr user femaletrumpet02

For the past few years, the Hotel Pontchartrain in Detroit has stood shuttered and empty, a looming symbol of the city’s better days. But now, the Pontch looks like it is coming back to life, thanks to a Mexican developer.

The Detroit News reported this morning that the 25-story hotel was purchased by Gabriel Ruiz, a Mexican businessman, and that the hotel will become a Crowne Plaza once more.

Bill Bohde, a senior vice president of the Detroit Metro Convention & Visitors Bureau, said the InterContinental Hotels Group, which runs the Crowne Plaza Hotels & Resorts chain, informed him of the sale last week.

Bohde says he understands the group has an agreement in principle to make it part of the Crowne Plaza chain, and restore it as a 416-room property.

The hotel, nicknamed “the Pontch” by Detroiters, has one of the premium locations in all of downtown, across from the Cobo Convention Center. But it has been shut since 2009, when its air conditioning system failed.  Continue reading “After Tough Times, Detroit’s Hotel Pontchartrain Is Set For A Comeback”

Midwest Memo: Dow Downsizes, Romney’s Winning Streak And The Countdown In Detroit

Dow and out Dow Chemical says it will lay off 900 workers and close five factories worldwide. The Detroit Free Press reports the company wouldn’t say if any of those cuts would be in Michigan. Dow is based in Midland, Mich. One of the plants that will close is in Charleston, Ill.

Decision day It’s primary day in Wisconsin. NPR reports Romney is hoping to extend his winning streak in Great Lakes states.

Broken marriage The Federal Trade Commission has blocked a hospital merger deal in the Toledo area.

Fewer people on welfare Partner station WCPN reports Ohio’s welfare rolls dropped 18 percent in one year. One reason is the improving economy. But the station reports that a bigger reason is tighter welfare rules.

Clock is ticking Less than 72 hours remain for Detroit leaders to reach a deal with Lansing to avoid a state takeover.

How A Law Meant To Protect Property Owners In Michigan Is Holding Detroit Back

Vacant land on Moran St. in Detroit, as seen on Google Street View.

Detroit has a lot of vacant land. That much, you’ve probably heard by now. On Sunday, the Detroit Free Press took a look at efforts to put that land to use, and along the way, the paper rounded up some eye-popping statistics you might not have heard:

  • There are more than 100,000 vacant residential lots in the city of Detroit.
  • If you include commercial property, nearly a third of the city is vacant.
  • If you put all of the vacant land together, the entire city of Paris could fit inside.
  • The vacant land could also fit 25,000 football fields.
  • Only 40% of the real estate parcels in the entire city have owners who pay their property taxes on time.
  • Over the past 30 years in Detroit, 10 residential structures were demolished for every one that was built.

There are plenty of people who want to put this vacant land to use. But that’s proving more complicated than it sounds, thanks especially to a law passed by Michigan voters in 2006.

Continue reading “How A Law Meant To Protect Property Owners In Michigan Is Holding Detroit Back”

How We Think About Public Transportation Is Changing

Chicago is experiencing record ridership of the CTA, and it’s on a drive to spruce up 100 stations. Cleveland has high speed buses from downtown to the Medical Center. In Canada, Toronto has streetcars and every kind of transit you can imagine, including rental bikes.

Toronto rental bikes/photo by Micki Maynard

But Detroit? Well, besides the People Mover, public transportation has never been a big priority. However, mindsets may be changing, according to veteran journalist Rick Haglund.

In a column this weekend, Haglund says the environment for public transportation seems to be changing in Michigan. He cites two reasons: younger people aren’t as interested in driving or owning cars as they once were, and governments and business leaders are lending their support. Continue reading “How We Think About Public Transportation Is Changing”

Midwest Memo: Powering Up Wind Projects On The Lakes, Chicago’s Debt And Detroit In Disagreement

Windmills on the Lakes? The AP reports the federal government will announce a new plan today to speed up development of offshore wind farms on the Great Lakes. The government has signed agreements with five of the eight Great Lakes states to clear up the regulatory requirements for wind power projects in the Lakes. Proposed projects have faced opposition from groups worried that wind turbines will spoil views on the Lakes. Three states have not signed on to the new plan: Ohio, Indiana and Wisconsin.

Chicago’s debt Yesterday, Chicago Mayor announced a $7.2 billion plan to update the city’s infrastructure, without raising taxes. Reuters reports the city will take on new debt to pay for the plan. Chicago already has a higher debt burden than Los Angeles or New York.

Skeptical city council Detroit City Council members got a look at a new proposal from the state to resolve the city’s financial crisis, and it didn’t go well, according to partner station Michigan Radio. The two sides have five days to reach a deal, before the governor is forced to impose a restructuring plan, which would likely include the appointment of an emergency manager. But as Michigan Radio reports, “it’s clear the two sides are still a long way apart.”

Yay! The Michigan economy is at a six-year high, according to the Detroit News.

NATO … more like “NO-DOUGH,” amiright? The Chicago Tribune reports that the federal government usually covers all of the security costs related to hosting a NATO summit. But in Chicago, the government is only covering half the cost. Corporate donors are picking up the rest of the tab.

Ready to flow Ohio is getting its first liquefied natural gas station.