Whether it is with despair, empathy or schadenfreude, the nation watches one of it’s premier cities falter through corruption, decay and population decline, fail through bankruptcy and moved toward a hoped for renewal. An early price tag for the physical restructuring of the city was just presented by the Obama appointed Detroit Blight Removal Task Force. The 139 square mile city is facing a recommendation to tear down 30% of its buildings. The demolition cost is estimated at $850 million. And that is just phase one. The remaining demolition could cost another $1 billion. See details: Detroit Urged to Tear Down 40,000 Buildings
Meanwhile, Detroit is fighting in court for the approval of its bankruptcy plan. The court must decide whether the city of Detroit will be allowed to split its debtors into two classes and treat them differently, offering a $0.60 on the dollar return for the city employee pensioners and $0.10 for unsecured financial creditors, like corporations. The court is scheduled to begin this critical round of hearings and decisions in a trial scheduled to start on July 24, 2014 and overseen by Bankruptcy Judge Steven Rhodes. The bankruptcy proposal developed by Detroit emergency manager Kevyn Orr, would allow the city to reinvest over $1.4 billion in demolition, reconstruction and public services, including police and fire, over the next decade. See details: Detroit Forcefully Defends Bankruptcy Plan in Filing.
It will be a hard summer for Detroit. We hope it brings a new beginning for this once proud USA capital of manufacturing and industry. Although it is the biggest city to go into bankruptcy, it isn’t the first, nor is it likely to be the last. America’s cities are aging. Most are little more than 100 years old. But without a policy to finance maintenance and capital improvements, they won’t last another century. Detroit is the urban equivalent of the “canary in the coal mine”.
Follow Barbara Thornton @assetstewards