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July 26, 2014

Election of Michigan Governor and value of art

This falls election of Governor is going to swing on the progression of Detroit's bankruptcy. If it is determined that the Grand Bargain is actually not so grand and may do more harm than good to Detroit, Snyder loses.

Despite the hype, it is not clear whether the deal concocted by Snyder and Orr is best for the future of the city. The determining factor will be the real value of the art owned by the city and whether their is anything preventing the city using their assets stored at the DIA in the best manner it sees fit.
There presently is one completed appraisal of the art and that was ordered by Kevyn Orr. The value came in at $4.8 billion. My experience in real estate is the entity paying for an appraisal has a significant influence on the result. A second appraisal needs to be ordered by someone else.

The creditors have yet to order an appraisal, however when Orr first arrived in town last year there was talk that the city's art had a value between $10-$15 billion. If this is closer to reality the Grand Bargain is a sham. The above estimation of value was stated in an editorial by Nolan Finley last year. http://lstrn.us/TFZgRI

The city needs a lot of money coupled with a solid plan and implementation to become a city where middle class families want to live. If this fails to happen, Detroit and a significant portion of its citizens will remain impoverished.

We need to understand the Grand Bargain before this falls election not after.
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**Revised July 27, 2014: There is now a second appraisal at $8.5 billion

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