When you look back at the long history of Detroit, yesterday may not have been quite as significant as July 24, 1701.
That was the day Cadillac and his men beached their canoes, scrambled up the riverbank near where the Cobo Center now stands, and started building a fort. But yesterday comes somewhat close.
Yesterday was the day the last major holdout creditor came to terms with the city, in a way that should help improve the city’s chances to make it after the bankruptcy process ends.
This also seems to remove the last threat facing the Detroit Institute of Arts. Financial Guaranty Insurance Company will get the land where Joe Louis Arena now sits, the place where the Red Wings play and where, 34 years ago, I saw Ronald Reagan nominated for President. Eventually, when a new hockey arena opens, this will be torn down and a gleaming new luxury riverfront hotel built here, surrounded by condos and some new retail.
Detroit had owed Financial Guaranty more than a billion dollars. For a long while, a deal seemed unlikely. But the insurer feared that a judge-imposed settlement, called by the lovely name of a “cramdown,” would be worse.
This settlement seems to be tailor-made for both the creditor and the city, which, if all goes according to plan, will have a new convention-attracting and tax revenue generating property.
One note of caution: We’ve seen a few grand riverfront development schemes come to considerably less than advertised. More than 30 years ago, Toledo bet its future on a similar combination of offerings on its attractive downtown riverfront. They called it the Portside Festival Marketplace, and it soon failed.
But Detroit has far more going on. This anticipated hotel is years away, however. The trial is still not quite over, and the judge’s final ruling may not come for weeks. And he may well want some changes in the city’s proposed “plan of adjustment.”
But still, all signs are that things are proceeding almost astonishingly smoothly. There’s one bit of legal limbo: Now that the elected officials have regained most of their power, City Council has to approve this deal. But Kevyn Orr still has something like emergency manager powers for bankruptcy issues, so if the Council should reject this, he would probably ask the state to overrule them.
There are statues of Cadillac and other founders of Detroit outside my office at Wayne State. We don’t build statues to civic leaders much anymore. The ones we have are mainly visited only by the pigeons.
But if there are two men who deserve statues, they are Kevyn Orr and Steven Rhodes, who together, have led Detroit through what really was a terrifying financial wilderness. They made each other better. Early on, Rhodes made it clear to Orr that he expected the emergency manager to get more concessions from the creditors than Orr first seemed to believe possible. In turn, Orr’s dazzling negotiating skills resulted in the city gaining much more than I once believed possible, and likely will make the judge’s final job easier too.
The bankruptcy may soon be over. And then, of course, the really hard part, Detroit’s future, begins. Stay tuned.
Jack Lessenberry is Michigan Radio’s political analyst. Views expressed in the essays by Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.