Obama admin allocates $52 million to Detroit for urban blight removal while pension funds continue to protest bankruptcy

posted at 7:21 pm on August 20, 2013 by Erika Johnsen

The city of Detroit’s various creditors and pension obligations are certainly not going gently into that good night of their municipal bankruptcy filing. After the city’s emergency manager tried for months to get the relevant unions and pension funds to compromise in financial negotiations meant to help the city avert bankruptcy, they pretty much refused to budge — and now they’re doing everything they can think of to continue to challenge the legality of the bankruptcy declaration in the first place. , obviously, and are challenging the city’s right to even do so. Monday was the deadline for filing objections to Detroit’s application for Chapter 9 bankruptcy protection, and file they did. Via Bloomberg:

One of Detroit’s two main unions was the first major creditor to file a formal objection, questioning the math behind emergency manager Kevyn Orr’s controversial decision to consider the city’s pension funds as unsecured creditors that could be forced to face cuts. Many pensioners didn’t just let unions speak on their behalf—they submitted their own, personal objections, often in handwritten notes. The letters say that they depend on the pensions promised to them, that they turned down higher-paying job offers in the past because of the benefits, and that they rely on the pensions to meet their obligations. Here’s a sampling of their pleas to the judge:

Michael G. Benson said he is a retired employee of the city’s water department and objected “to the use of the retires [sic] pension for any purposes other than retires [sic],” adding that “surely there are other options available to the city.”

Olivia Gillon, who said she had worked for the city for more than 30 years, wrote: “The City of Detroit has too many assets to be bankrupt. … If the Federal court allows our pension fund to be raided, it will open a flood gate for hundreds of other cities. … Please do not allow representatives of the City of Detroit to take retiree’s pensions and declare pensioners just another creditor.”

Of course, the subjects of Detroit’s many unfunded obligations and liabilities were never going to take the bankruptcy lying down — why would they? The city’s lines of red ink are going to mean a lot of real material pain for a heck of a lot of people who built their life plans around these promises, but thwarting the city’s bankruptcy isn’t going to change the fact that decades of these extravagant and unsustainable promises (the consequences of which they’ve probably underestimated!) have left the city with few workable and zero pain-free options. Let other progressive havens take note.

And no, by the way, the Obama administration is definitely not doing anything to give Detroit a direct bailout, per se — but urban blight removal? There’s federal cash for that, natch.

The city of Detroit will receive more than half of $100 million in newly allocated federal funds to tear down blighted structures.

The city riddled with thousands of abandoned buildings will begin demolishing some of them later this month with the help of $52.2 million in federal money, Gov. Rick Snyder said Tuesday.

“This is excellent news for Detroiters and for improved public safety in the city,” said Bill Nowling, spokesman for Detroit Emergency Manager Kevyn Orr. “These funds will be put to immediate use stabilizing neighborhoods and eradicating blight. Next week the the city, with assistance from the state of Michigan, will begin knocking down blighted structures with these funds.”

Advocates have praised the influx of money as a chance for the financially bankrupt city to clear out eyesores, rid neighborhoods of crime havens and to free up open space for new uses. Sen. Carl Levin, D-Detroit, also has said this redirecting of mortgage aid money for Michigan is an example of how the Obama administration can help aid the city that filed the largest municipal bankruptcy in U.S. history.


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Just great. Level that ghetto…

OmahaConservative on August 20, 2013 at 7:25 PM

Can`t they just let it decay, be set on fire as per usual?

ThePrez on August 20, 2013 at 7:26 PM

And no, by the way, the Obama administration is definitely not doing anything to give Detroit a direct bailout, per se — but urban blight removal?

By nuking the city? That would make the place look better. Just let me know ahead of time, as I’m sort of down wind.

rbj on August 20, 2013 at 7:26 PM

There go 52 million straight down the abyss…are the stinkhole.

Schadenfreude on August 20, 2013 at 7:27 PM

er, the stinkhole.

Schadenfreude on August 20, 2013 at 7:27 PM

It will take more than $52 million to get rid of the blight that is Detroit.

myiq2xu on August 20, 2013 at 7:27 PM

Teh-heh

Schadenfreude on August 20, 2013 at 7:28 PM

Open shop bidding on ALL demolition and disposal contracts.

Bruce MacMahon on August 20, 2013 at 7:29 PM

Yeah…sure….urban blight removal

The inevitable results of ‘Community Organizing™’

Bailout by EO…

Go President Four Putt…..

BigWyo on August 20, 2013 at 7:29 PM

Who will supply the funds to eradicate the blight in DC?

Schadenfreude on August 20, 2013 at 7:29 PM

…believe me…it’s wasted!….they have had to return money to DC before…since they didn’t KNOW HOW to use it in the allotted time…so there’s hope!

KOOLAID2 on August 20, 2013 at 7:29 PM

Speaking off funding, is Gov Perry’s goose cooked?

http://www.politico.com/story/2013/08/rick-perry-obamacare-95727.html?hp=f2

loveofcountry on August 20, 2013 at 7:30 PM

It’s still urban blight if there remains a dirt lot strewn with debris where a derelict house used to stand. Knock down enough buildings in an area, and you wind up with that Hiroshima look instead of that of Dresden.

Liam on August 20, 2013 at 7:30 PM

Who will supply the funds to eradicate the blight in DC?

Schadenfreude on August 20, 2013 at 7:29 PM

HEAR, HEAR! Well said. :)

thatsafactjack on August 20, 2013 at 7:32 PM

Motor City Blight Busters does a good job of doing this with no public funding, I believe.

8 weight on August 20, 2013 at 7:33 PM

The Reason We Have a Constitution is to Protect Us from a President Like Barack Obooba

Akzed on August 20, 2013 at 7:35 PM

It will take more than $52 million to get rid of the blight that is Detroit.

myiq2xu on August 20, 2013 at 7:27 PM

It’s not enough. The US government has been ‘investing’ $52 mil per week on cities in Iraq and Afghanistan for the last 10 years. It’s time to redirect all those funds to struggling cities and rural areas in the US. Maybe an occupation of Detroit is also appropriate.

bayam on August 20, 2013 at 7:42 PM

The US government, with the support of my Democrat Party, has been ‘investing’ $52 mil per week on cities in Iraq and Afghanistan for the last 10 years.

bayam on August 20, 2013 at 7:42 PM

Edited for accuracy.

President Barack Obama proposed giving Colombia about $323 million in aid next year, mostly to combat drug trafficking and violence. Detroit, with an 81 percent higher homicide rate, will get $108.2 million.

This is all Bush’s fault, right?

Del Dolemonte on August 20, 2013 at 7:49 PM

Why…WHY? To make room for the millions of new people clamoring to build a home in the city? 100 million to tear it all down and have a giant polluted field of diseased earth leftover, yay I guess.

Bishop on August 20, 2013 at 7:49 PM

If we can really clear the urban blight from Detroit for $52 million, it is certainly worth looking into.

But there are questions which must be asked first – starting with, “Where are they going to put all the citizens of Detroit after they are removed?”

I vote for Canada.

Adjoran on August 20, 2013 at 7:51 PM

It will take more than $52 million to get rid of the blight that is Detroit.

myiq2xu on August 20, 2013 at 7:27 PM

How much to get rid of the blight that is this Toilet Bug???

bayam on August 20, 2013 at 7:42 PM

I got 5 bucks…

BigWyo on August 20, 2013 at 7:51 PM

The only way that $52 mil is going to remove Detroit’s blight is if we use it to bribe Canada to take it off our hands…

JohnGalt23 on August 20, 2013 at 7:52 PM

It’s time to redirect all those funds to struggling cities and rural areas in the US. Maybe an occupation of Detroit is also appropriate.

bayam on August 20, 2013 at 7:42 PM

Struggling blue cities run by blue governments elected by blue electorates.

And you don’t want to occupy Detroit, right now Cairo is safer. Detroit is a blue city, BTW.

Bishop on August 20, 2013 at 7:53 PM

wonder what it is really for, and who is going to really get the money.

RonK on August 20, 2013 at 7:53 PM

It’s not enough. The US government has been ‘investing’ $52 mil per week on cities in Iraq and Afghanistan for the last 10 years. It’s time to redirect all those funds to struggling cities and rural areas in the US. Maybe an occupation of Detroit is also appropriate.

bayam on August 20, 2013 at 7:42 PM

How about letting cities pay their own way for their mistakes? Why should a farmer from North Dakota pay higher taxes to cover the butts of money-squandering politicians in Detroit?

And, yes — I’m opposed to foreign aid except for food. No cash, no high-weapons, no material giveaways like oil drilling equipment. Unless, of course, the country pays cash on the barrelhead for the non-military equipment.

Liam on August 20, 2013 at 7:53 PM

wonder what it is really for, and who is going to really get the money.

RonK on August 20, 2013 at 7:53 PM

The crews tearing down those buildings will be strictly union workers. I bet it’s against city law to use non-union companies to do the work and cart away the rubble.

Liam on August 20, 2013 at 7:54 PM

The crews tearing down those buildings will be strictly union workers. I bet it’s against city law to use non-union companies to do the work and cart away the rubble.

Liam on August 20, 2013 at 7:54 PM

will it even make it that far??

RonK on August 20, 2013 at 7:57 PM

Maybe an occupation of Detroit is also appropriate.

bayam on August 20, 2013 at 7:42 PM

…you must be white!

KOOLAID2 on August 20, 2013 at 7:57 PM

$52.2 million in federal money? Glad I, as an Arkansas resident, can help.

/sarc

Charlemagne on August 20, 2013 at 7:58 PM

It’s not enough. The US government has been ‘investing’ $52 mil per week on cities in Iraq and Afghanistan for the last 10 years. It’s time to redirect all those funds to struggling cities and rural areas in the US. Maybe an occupation of Detroit is also appropriate.
 
bayam on August 20, 2013 at 7:42 PM

 
From the last time you made almost the exact same post about Detroit (and fled the thread as always):
 

There’s no shortage of broken cities in this country, yet the US seems to be investing its efforts in aiding and rebuilding communities in Iraq and Afghanistan.
 
bayam on July 19, 2013 at 1:06 AM

 
+1. Great point, other than where you forgot how annual (and increased) stimulus spending has continued each year since Reid and Obama refuse to pass a budget. Say, I wonder why they’d do that?
 
(Just kidding about the “forgot” part. Here’s a link so you can read about it for the first time.)
 
That’s what, $1.5 trillion in Iraq and Afghanistan vs. $5 trillion (with a “T”) in stimulus spending since Obama took office?
 
But sure, aside from that one teensy little $5,000,000,000,000+ detail your post is well-reasoned and 100% correct.
 
rogerb on July 19, 2013 at 1:34 PM

 
You’re re-posting the same distraction/misinformation that was already addressed, meaning you’re actively embracing ignorance.
 
How religious of you.

rogerb on August 20, 2013 at 8:04 PM

Open shop bidding on ALL demolition and disposal contracts.

Bruce MacMahon on August 20, 2013 at 7:29 PM

Phht. That’s not going to happen. That’s greedy-union work exclusively.

slickwillie2001 on August 20, 2013 at 8:10 PM

Isn’t Detroit where they filmed the show “Life After People”?

William Teach on August 20, 2013 at 8:11 PM

will it even make it that far??

RonK on August 20, 2013 at 7:57 PM

I doubt it. The money has to first go through the ‘administrators’ who oversee the dispersal of those funds, then ‘negotiate the contracts’ with the companies. This might involve overtime, because the union delegates will likely be handling the negotiations.

When it’s all said and done, one large building might be torn down, with the expected ‘cost overruns’.

Fifty-two million doesn’t go very far in Detroit, I imagine.

Liam on August 20, 2013 at 8:16 PM

Detroit should be used as a training center for firemen from around the world. They could set a house or whole blocks on fire and let the trainees learn their craft in a somewhat controlled environment.

Flange on August 20, 2013 at 8:19 PM

Mar 07 2012
Detroit faces loss of cash from federal block grants
Detroit Free Press (Michigan) – by Steve Neavling

An empty house in the Brightmoor neighborhood. Detroit receives about $33 million in CDBG money each year.

Detroit Mayor Dave Bing is paying workers extra to embark on a spending spree of sorts.

That’s because Detroit is in danger of losing more federal grant money — this time more than $20 million — because city officials are more than two years behind in spending Community Development Block Grants (CDBG), which can be used to demolish abandoned houses, revitalize neighborhoods and create new jobs, the Free Press has found.

“This is the third year in a row they haven’t spent enough money,” Lana Vacha, field director of the U.S. Department of Housing and Urban Development’s Detroit office, told the Free Press on Monday. “It is a serious issue if they aren’t timely again.”

Every year, Detroit receives about $33 million in CDBG money. But because the city has failed to spend it, the money has accumulated to nearly $70 million. If the city continues to lag, it could lose more money and future grants, Vacha said.

Flange on August 20, 2013 at 8:24 PM

How religious of you.

rogerb on August 20, 2013 at 8:04 PM

…. HA!

KOOLAID2 on August 20, 2013 at 8:25 PM

The blight that should be removed from Detroit are the elected officials and that could be accomplished for no cost.

driguana on August 20, 2013 at 8:27 PM

Detroit should be used as a training center for firemen from around the world. They could set a house or whole blocks on fire and let the trainees learn their craft in a somewhat controlled environment.

Flange on August 20, 2013 at 8:19 PM

With the added benefit of learning how to also dodge sniper fire!

Liam on August 20, 2013 at 8:27 PM

I’m sure that our military is capable of removing the ‘blight’ from Detroit for one hell of a lot less than $52 million.

GarandFan on August 20, 2013 at 8:31 PM

I’m sure that our military is capable of removing the ‘blight’ from Detroit for one hell of a lot less than $52 million.

GarandFan on August 20, 2013 at 8:31 PM

Save for the use of nuclear weapons… not a chance.

JohnGalt23 on August 20, 2013 at 8:33 PM

Obama admin allocates $52 million to Detroit for urban blight removal while pension funds continue to protest bankruptcy

Just wait until they begin “managing” every American’s 401K or other pension.

Dr. ZhivBlago on August 20, 2013 at 8:38 PM

Lived in Detroitet when Engler cut welfare…

You couldn’t find a UHaul in the entire city as the muck moved out in droves to suckle the teat of the neighboring welfare states.

Detroit sent out a plague of “gimmies”, “babymomma’s” and “saywhats”. I actually thought we had a chance.

It’s hard going back. And dangerous.

Except for coney dogs and the Red Wings, Detroit is a bloated corpse and the armpit of Windsor.

Thank God Obama didn’t let the place go to hell.

patman77 on August 20, 2013 at 8:48 PM

So where are they going to move them to?

claudius on August 20, 2013 at 8:48 PM

Lived in Detroitet when Engler cut welfare…

You couldn’t find a UHaul in the entire city as the muck moved out in droves to suckle the teat of the neighboring welfare states.

Detroit sent out a plague of “gimmies”, “babymomma’s” and “saywhats”. I actually thought we had a chance.

It’s hard going back. And dangerous.

Except for coney dogs and the Red Wings, Detroit is a bloated corpse and the armpit of Windsor.

Thank God Obama didn’t let the place go to hell.

patman77 on August 20, 2013 at 8:48 PM

I think Detroit is pretty much sucking Windsor down with it. Canadians would be smart to blow the bridges.

slickwillie2001 on August 20, 2013 at 8:50 PM

if you use common core math it all works out just fine…

chasdal on August 20, 2013 at 8:54 PM

so TARP funds shinted away from foreclosure prevention to use for this.
then more $$ needed for foreclosure preventions.

detroit bailout part 1 has started.

dmacleo on August 20, 2013 at 9:18 PM

When a city simply shuts down from the effects of government mismanagement, the media say nothing. Detroit has become the poster child of government regulation, welfare systems, and a population that has given up hope.

The media say nothing because they are caught in a dilemma. If they say that the local government’s welfare programs are not really to blame, what does that leave? The unmentionable issue: 82% of the city is Black. So, that means blaming white employers, who discriminate, despite 40 years of Federal anti-discrimination laws. But the main non-employers today are the region’s auto companies, and two of the three are partially owned by the U.S. government. One — GM — is mainly owned by the retirement fund of the United Auto Workers. So, the media are not about to blame the auto companies — not now.

That leaves that other politically incorrect issue: the rate of illegitimacy, which is in the 80% range. That social phenomenon represents a moral collapse, but the participants were all educated by the tax-funded schools.

Who ya gonna blame?

The media pundits cannot decide, so they simply ignore the collapse. “Detroit? Never heard of it.”

The lesson of Detroit is this: the experts do not see a collapse coming. They assume that next year will be like today, give or take 3%. They do not believe that anything as complex as a city can collapse. So, they believe that things will continue, as they always have. Taxes need not be cut. Spending need not be cut. Schools should be allowed to educate. Tax-funded welfare programs should be increased. When it comes to tax revenues, “there’s always more where that came from.”

Very few politicians are prepared to level with the American people about our fiscal dead end. Similarly, they will not fully acknowledge the extent that government micromanagement of industry through the tax code and overly restrictive labor and health care policies has severely undermined the ability of U.S. industry to compete internationally. As a result, we have seen a steady disappearance of our manufacturing jobs nationally, just like Detroit has. The big difference of course is that Washington has a printing press. In the end, however, that will make little difference.

roflmmfao

donabernathy on August 20, 2013 at 9:18 PM

if you use common core math it all works out just fine…

chasdal on August 20, 2013 at 8:54 PM

Is that anything like “new math”?

I still remember Charles Schulz back in the day making fun of that in Peanuts.

Twenty years ago they had “whole language”.

Both of these have died quiet deaths, but I’m sure will be reborn in some new package of ivory tower educanese…and it won’t work next time around, either.

Dr. ZhivBlago on August 20, 2013 at 9:26 PM

bayam on August 20, 2013 at 7:42 PM

When are you moving to Detroit? You leftist azzholes never live where you preach that others should.

See where all the filthy rich live in NY and in LA, you hypocritical swine.

Schadenfreude on August 20, 2013 at 9:47 PM

Urban Blight Removal?

Stop voting democrat, take personal responsibility, work, take care of your property, respect other’s rights.

Murphy9 on August 20, 2013 at 10:00 PM

Panic In Detroit.

Bmore on August 20, 2013 at 10:20 PM

What if the Detroit Tigers go on to win the World Series? The victory parade would be problematic. a hazardous march past cheering throngs of rats, wild dogs, stray cats, predatory muggers and cockroaches. Through weed-choked empty lots infested with ticks, mites, spiders, leeches, mosquitoes, poison ivy and poison oak. After that experience they’ll have to change their name to the Detroit Redskins.

MaiDee on August 20, 2013 at 10:52 PM

The NRE Weather Service has issued a Crying River Flood Warning for Detriot’s unions and pensioners. They should consult Delphi salaried retirees on how to survive bankruptcy.

As for the urban blight removal, instead of weed-choked lots with half-standing buildings, they’ll be empty weed-choked lots. The results will be as disappointing as they are predictable.

Steve Eggleston on August 21, 2013 at 12:52 AM

To the union pensioners:

Tell it to the people whose pensions were illegally stiffed by Obama’s GM and Chrysler bailouts. I am sure they’ll be pleased to listen and offer help.

Stuff happens. You’re gonna have to live with it. Of course, you could take some blighted Detroit real estate as payment. Otherwise getting blood from this stone is likely to be hard. And all your suits are doing is depleting the pool of money for creditors.

{^_^}

herself on August 21, 2013 at 6:06 AM

Steve Eggleston on August 21, 2013 at 12:52 AM

It won’t save Detroit, but those abandoned houses are used for a lot of crime, so tearing them down would make the city safer. Plus it makes selling/rehabbing other houses easier if there isn’t half burned out homes next door.

Flange on August 21, 2013 at 8:09 AM

here’s our first “demolition ready project” brought to you by executive order…

Keith_Indy on August 21, 2013 at 8:52 AM