July 13, 2014

Art is key to Detroit's future

The Grand Bargain appears to provide a quick way for Detroit to get out of bankruptcy. The more important issue is whether it provides the residents a future. Kevyn Orr is a hired gun. Once the bankruptcy is done so is his job and he goes back to Jones Day. The city still has a population where 70% of its adult citizens either do not have a high school degree or they are not employed. The Detroit public schools still have 80% of its children in poverty.

The Grand Bargain does not address this and I fear the Grand Bargain may negate an opportunity for the citizens of Detroit to make a better life for themselves. It is crucial that the city and its citizens have a handle on the value of the art at the DIA and whether Detroit has the legal right to do with it as they wish. This has not been determined. $15 billion would go a long way towards making the city a better place to raise a family.

The arts' value has not been determined. There has been much speculation and only one appraisal done at the request of Kevyn Orr putting the arts' worth near $4.9 billion. Keep in mind Mr. Orr's job is to guide the city out of bankruptcy and go back home to his family. Mr. Orr will in the future be at his home either in D.C. or Florida reading about Detroit. He will not be living in Detroit nor will he be working for Detroit.

In the early stages of Mr. Orr's tenure as the Emergency Manager a value between $10 and $15 billion was being bantered around and discussed in the local newspapers. If this is the case, and the city has control of it, including disposing of it, The Grand Bargain becomes a Grand Ripoff of the city. The city would be giving away $15 billion in assets for the forgiveness of $800 million in debt.

Before Judge Rhodes opines on the case you can expect the creditors to order their own appraisal and for sure it will be be greater than the one paid for by the city.
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