No roadmap to recovery for bankrupt Detroit
Motor City residents fear for the future
Even by the desolate standards of Detroit’s inner city wastelands, the maze of potholed streets around the Obedient Missionary Baptist Church are a desperate sight.
This is ground zero in the collapse of a city that has just declared the largest municipal bankruptcy in history, buried beneath up to $20 billion in debts and liabilities, including underfunded pension plans and unfunded health costs for retirees.
The cradle of the automobile industry in the early decades of the last century, Detroit put the world on wheels and even found time to give birth to the Motown music phenomenon.
But Motor City has been struggling for decades and Thursday’s declaration of bankruptcy only confirmed the glaringly obvious.
Michigan’s governor, Rick Snyder, has admitted that the city cannot even provide the most basic services to its 700,000 residents, a figure that has shrunk from nearly two million in the 1950s.
Murders are at a 40-year high and nearly 80,000 abandoned buildings blight the landscape.
On Friday, Snyder and Detroit’s 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.
The decline he spoke of is only too clear at the junction of West Chicago and Livernois avenues; a railway crossing where trains have long since stopped running.
When it gets dark each night, it really gets dark: only the occasional street light works. Discarded furniture is strewn outside boarded up homes; empty lots are turning back to prairie.
The district earned the unenviable distinction this year of being named the most dangerous in America, according to FBI statistics.
Locals say they would be better off calling a hearse than an ambulance or police car.
Across Detroit, the average police response time to a call-out is 58 minutes, while just one-third of its ambulance service is in use.
“It’s a good day around here if the cops respond in 58 minutes,” said Joyce Copley, 65, a lifelong resident. “More like an hour and 58 minutes.
“We’re at breaking point here. Will bankruptcy help us? I don’t know, but I’m not sure it can get much worse.”
It was this plight that Orr addressed Friday.
He is seeking refuge from the city’s creditors — most notably union pension funds — so that he can focus on the “health, safety and welfare” of Detroit’s citizens.
But the city is a case study in municipal failure, industrial decay, corruption and incompetence. The economic meltdown and housing crisis of 2008 dispatched Detroit into the abyss.
The city was not raising the money to keep even the most basic services going.
Orr calculated that at least $9 billion of Detroit’s liabilities are underfunded pensions and unfunded health costs for retirees.
It is money, he said, that the city simply does not have.
His bankruptcy decision has infuriated unions and will mean that former city workers, many of them already struggling to get by, will face drastic cuts to pensions and health care.
“It’s fine for him to come in here with his Washington fees and spout these figures, but we are the ones who are losing our pensions for our retirement after working for this city for all our lives,” said a foreman at a station on Livernois Avenue.
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 the company is owed.
No major city has sunk into insolvency with such large debts and there is no road map back to recovery. The city’s prized art collection may have to be sold under deals struck with the judge overseeing the bankruptcy.
It is perhaps no surprise many locals are as yet unconvinced with Orr’s recovery plan.
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.
She doubts bankruptcy will change anything.
“You can’t put a Band-Aid on a gunshot wound,” she said.