Update on Detroit
Publisher: Against the Current
Date Written: 01/05/2014
Year Published: 2014
Resource Type: Article
Cx Number: CX20404
Feeley provides an update on the economic situation in Detroit as the city declares bankruptcy and is suffering from foreclosures, evictions, pension and funding cuts.
Orr had asked federal bankruptcy judge Stephen Rhodes to approve a $280 million deal to get out of a swap agreement city officials signed with Bank of America and UBS AG in 2005, but the judge found that too sweet a deal for the banksters. Orr then negotiated a $165 million settlement; again the judge declined -- perhaps indirectly reflecting the angry public mood -- suggesting instead that Detroit sue the two banks.
Orr declined and came back with a third settlement, this time for $85 million, which the judge approved.
At the same time, the city just gave 39 properties with an assessed value of $2.9 million to Mike Ilitch's Olympia Development Corporation for one dollar so they could build a new downtown hockey arena. Sixty percent of the $650 million complex will be underwritten by city and state funds, yet the corporation will pay no rent or Detroit property taxes -- the city will not even collect a portion of the parking fees or concession sales!
There are elements of resistance, including frequent demonstrations against the Emergency Manager and some successes in stopping evictions, but not on the scale needed to block the steamroller. A portion of the 139-mile city will be gentrified while some neighborhoods will continue to decay. The pattern is clear: generosity toward banks and corporations, with an iron fist for working people.