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.

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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.

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.

Watch Live: Governor Snyder To Take Questions From Detroiters At 11 a.m.

Watch live streaming video from snyderlive at livestream.com

On Monday, the state appointed financial review team for Detroit held its final meeting, and members got an earful from Detroiters who are worried that their city could face a takeover. Today, governor Rick Snyder is speaking in the city, and he’s expected to take questions. The governor has until April 5th to reach a consent agreement with Detroit leaders. If that doesn’t happen, he’ll likely appoint an emergency manager to run the city.

The event will stream live at 11 a.m.

Midwest Memo: Amazon Invests In Indiana, Snyder Takes Questions And Cash Mobs Swarm Stores

Amazon’s deal Amazon will build a $150 million distribution center in southern Indiana. The decision to build came after Indiana agreed to let the retailer go two more years before forcing it to collect Indiana sales tax. BussinessWeek reports the distribution center could eventually have 1,000 jobs.

Ask Snyder Partner station Michigan Radio reports that governor Rick Snyder will take questions from Detroiters today. The governor says he wants people to know the facts about the state’s negotiations to fix the cities finances. Many Detroiters worry they’ll lose local control.

Judge assists A judge in Michigan says the state was wrong to cut off about 11,000 families from welfare assistance last year. The families were cut off because of a new federal five-year limit on receiving benefits. But the families were still eligible for the benefits under state law.

Still planning to protest An official with the Chicago Police says there’s been no drop in interest from protesters since the announcement that Chicago would not host the G-8 Summit. He says just as many protesters are planning to show up for the NATO meeting.

Ready for tourists Cleveland has a new five-year plan to attract more tourists to the city. Partner station WCPN Ideastream takes a look at the ideas.

The good mob Reuters looks at a new trend in local boosterism: cash mobs.

Have We Reached The Final Countdown For Detroit?

Detroit's financial review team listened to impassioned arguments during public comment at yesterday's meeting. Credit: screen shot of streaming coverage from wdiv.com.

We told you yesterday would probably be a historic day for the city of Detroit. Well, not so much.

The state-appointed financial review team for the city did hold a meeting, as expected. It was a pretty raucous meeting, as our partner station Michigan Radio reported. The reviewteam was required by law to make a recommendation to the governor about how to handle Detroit’s “fiscal crisis.”

There were basically two options: Recommend a consent agreement with the city, or recommend appointing an emergency manager who has the power to toss out union contracts, sell assets and balance the books. At the time of the meeting, no consent agreement had been reached with the city, so the emergency manager option – an option no one really wants – was starting to look more likely. But instead of taking option 1 or 2, the review team took option 3: Restate that there is a fiscal crisis in the city, restate that the team prefers a consent agreement and restate the obvious fact that there is currently no consent agreement. Not exactly a historic decree.

Essentially, the team kicked the can.

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Midwest Memo: No News In Detroit, Michigan’s $1 Billion Year And Transit Worries In Chicago

Nothing yet There’s still no consent agreement between the city of Detroit and the state of Michigan. The team that’s been reviewing the city’s finances re-affirmed yesterday that they believe the city is in severe financial stress. But they did not recommend that the governor should appoint an emergency manager. Partner station Michigan Radio says the state and the city now have 10 days to reach a deal, before the governor is forced to take action.

Pure money Michigan’s tourism bureau says the Pure Michigan ad campaign helped attract a record $1 billion in travel sales last year. Partner station Michigan Radio reports that number is up from $605 million the year before.

Tripping up transit Chicago could lose $1.2 million per day if Congress doesn’t approve an extension of the country’s transit legislation by Saturday. The Chicago Tribune says the funding shortfall could jeopardize plans to buy buses, and modernize railway equipment in the Windy City.

Bigger, faster A study panel in Wisconsin has recommended a $207 million dollar expansion for the Lake Parkway in southern Milwaukee County.

Lottery online Illinois became the first state to sell lottery tickets online. The state made $15,000 on the first day of online lottery sales, according to NBC Chicago.

Off the hook Ohio legislators are considering a law that would allow phone companies to drop landline phone service in some areas of the state. Partner station WCPN Ideastream reports a collection of consumer groups say the change would hurt seniors and low-income people who don’t have cell phones.

Answers To The 9 Most Important Questions In Detroit Right Now

Downtown Detroit. Credit: David Tansey.

One way or the other, today is likely to go down as a historic – and possibly transformative – day for the city of Detroit. The city is burning through its cash, and fast approaching bankruptcy. By the end of the day, we could know more about what approach the state will take to help avoid that bankrupcty.

But the negotiations over Detroit’s future have taken a lot of confusing turns in the past couple of weeks, so we’ve tried to put together some answers to the city’s most pressing questions.

What’s happening today? Today is the deadline for the city to sign off on a proposed consent agreement with the state. The agreement would lead to the creation of a new panel to restructure Detroit’s finances.

What’s actually in the consent agreement? A lot. Sarah Cwiek at partner station Michigan Radio has an explainer.

What happens if the consent agreement isn’t signed today? Some say the state’s financial review team will be forced to recommend that Gov. Snyder appoint an emergency manager. Then, the governor will have 10 days to do so. But the Detroit Free Press says some of the details are still up for debate.

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