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Originally published July 19, 2013 at 5:50 AM | Page modified July 19, 2013 at 4:17 PM

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Residents worry if bankruptcy will better Detroit

In Detroit, it can take police nearly an hour to respond to a 911 call. Despite razing close to 10,000 vacant houses, three times as many still stand with windows smashed and doors ripped off. At night, many streets and even freeways are dangerously shrouded in darkness because tens of thousands of street lights don't work.

Associated Press

Next steps

Will the lights go out?

The city’s emergency manager, Kevyn Orr, says the city will be open and bills will be paid. And it can do things like keep police on the streets, firefighters on duty and water running.

The question is whether these services will be cut later.

How long will it take?

Detroit is by far the largest city to file for municipal bankruptcy, and because it is, the time frame for the case isn’t known. It could take years to resolve.

What happens in court?

A bankruptcy judge will be appointed to oversee the case. The city will have to come forward with a list of its creditors and how much it owes them. That wasn’t included in the initial Chapter 9 filing. It will also have to prove that it can’t pay its bills. Orr has said previously that the city wasn’t going to pay some of its debt.

A judge also will likely stay lawsuits against the city. Bankruptcy could change pension and retiree benefits, which are guaranteed under state law.

What will the judge do?

If the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment. The city would propose a reorganization plan. The wide-ranging plan could include anything from selling assets, layoffs, changing union contracts and more. Then, the city would need the support of creditors to emerge from bankruptcy.

The Associated Press

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DETROIT —

In Detroit, it can take police nearly an hour to respond to a 911 call. Despite razing close to 10,000 vacant houses, three times as many still stand with windows smashed and doors ripped off. At night, many streets and even freeways are dangerously shrouded in darkness because tens of thousands of street lights don't work.

This is Detroit, an insolvent city seeking to find its way through the uncertainty of the largest city in U.S. history to file for bankruptcy.

For decades, residents have heard one city official after another vow to improve city services but little would be done. On Friday - a day after the city filed the unprecedented bankruptcy - they were given a deadline.

Gov. Rick Snyder and Detroit emergency manager, Kevyn Orr, promised weary residents that they would see better city services in 30 to 60 days.

"Now is our opportunity to stop 60 years of decline," Snyder said Friday during a press conference just north of downtown.

Though Thursday's bankruptcy filing had been feared for months, the path ahead for the once mighty Motor City is still uncertain. As Detroit starts the likely lengthy process of shedding its debt, residents, businesses owners and retirees nervously wonder if they'll see improvements after years of neglect or if another round of promises will go unfulfilled.

ROWS OF VACANT HOMES

Resident Dennis Talbert has waged a battle to improve his northwest side neighborhood of Brightmoor for years, pleading with city officials to raze rows of vacant homes that have been stripped of electrical wiring and plumbing.

So far, none have been torn down.

Mayor Dave Bing continues with his plan to demolish 10,000 empty houses before his term ends in December, and some private companies are jumping in to tear down dangerous buildings. But it's costly and the city's inventory is too massive to make a real dent.

"I don't think the trickle-down theory works in Brightmoor," Talbert said. "The whole issue of bankruptcy will not impact poor people. Only when organizations start moving our way will those houses be removed."

DECLINING PROPERTY VALUES

In the heyday of its industrial power, Detroit used to boast of having one of the highest owner-occupied housing rates in the country thanks to the then-booming auto industry that offered well-paying jobs and a gateway to the middle class. In the 1950s, 1.8 million people lived here. Now, the population struggles to stay about 700,000. With neighborhoods in neglect, property values have plummeted.

One pocket of promise is in the Woodbridge neighborhood between the city's rebounding Midtown and downtown areas. The homes on Woodbridge's tree-lined Avery Street are mostly occupied and well-kept - something that attracted Daniel Mercer to a structurally sound but cosmetically needy two-story Victorian built in 1900.

"I used to come driving up and down the street all the time because I work in the area ... and I happened to see a (for-sale) sign, and it went up that day," said Mercer, 54, a painter and handyman. "There are a lot of people that have the same love for these old houses that I have ... and the passion to fix them up."

He bought the home about six weeks ago and plans to move in with his wife on Aug 10. The fact that he's moving in at the same time the city is filing for bankruptcy isn't lost on him.

He believes property values will climb even if they take an initial dip because of bankruptcy.

"We've got a 10-year plan, to be honest with you," he said. "There's a lot of work to do."

PAYING THE BILLS

Buried in the hundreds of pages of bankruptcy documents is the name Hercules & Hercules, Inc. For more than two decades, the janitorial supply company has done business with the city, but on occasion, Detroit couldn't pay and the company allowed it to forego payments. For Belinda Jefferson, president of the family-run firm, the bankruptcy doesn't change its commitment.

"We know the city is facing challenges and we're going to stick by them," said Jefferson, who declined to reveal how much Hercules & Hercules is owed.

The company is one of more 7,000 vendors listed among the 100,000 creditors documented in the bankruptcy filing. Those with debt tied to revenue streams like water and sewerage fees will get paid. Unsecured debt holders like Hercules & Hercules will have to stand in line and see what remains if a judge gives Detroit the OK to proceed with bankruptcy.

"We will treat everyone in the unsecured class equally because that's what's required under the law," Orr said. "How that breaks out is a function of the math."

RETIREE ANXIETY

The phones are lighting up at the offices of the Retired Detroit Police & Fire Fighters Association.

"The thing we can tell them right now is: `Nothing's happened yet. Our pension hopefully will be there on Aug. 1 when it comes in,'" said the group's vice president, Greg Trozak.

Detroit has about 10,000 workers and 18,000 retirees, and Snyder called the amount of money Detroit spends on health care and pensions "unsustainable."

For retirees like Trozak, city-funded health care may become a thing of the past.

"How can we make sure there are alternative health care programs?" Snyder said. "There is basically zero funding that has been set aside for the health care liabilities in the city of Detroit."

PUBLIC SAFETY

Rosalind Childs called 911 last year after her teenage son came home to find their home had been burglarized. The thieves took off with a laptop computer, money and a designer handbag.

"I got home four hours later and he was sitting there with a butcher's knife in my house waiting for the police to come," Childs said of her son.

After two more calls, the 51-year-old Childs was told she would be better off making a report at the closest precinct.

Childs is doubtful bankruptcy will change anything.

"We already are getting poor city services. Last week, they didn't even pick up our trash," she said. "I don't think bankruptcy is really going to make a difference. You can't put a band aid on a gunshot wound."

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Associated Press reporters David Eggert, Jeff Karoub, Mike Householder and Tom Krisher contributed to this report.

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