Finance, Ferguson, and Orr
Week 76 of the Occupation
Governor Snyder, his Emergency Manager Kevyn Orr and the corporate interests who back them all breathed a sigh of relief last week as Syncora blinked. The bond insurer agreed to support the bankruptcy plan last week.
David Heiman, a Jones Day attorney, told Judge Steven Rhodes that these “passionate adversaries” have “laid down the swords.” Synacora offered a formal apology to the court for having accused it of “naked favoritism.” Heiman told the judge “It takes a lot of emotional and mature effort to do that.” This deal, Heiman said, was an important step in settling Detroit’s bankruptcy and would hasten the time when the process would “return the city to its citizens.”
Really. After this deal with Syncora, the creation of the Regional Authority to run the water department, the transfer of more than 45,000 parcels of land to the Land Trust, the giveaway of city parks, schools and municipal buildings, and the extension of tax breaks to corporate interests, it is fair to ask: “What will be left of the city to return to its citizens?
Much of what has been used to get Synacora to “emotional maturity” is still unclear. We do know that the deal involves a transfer of city land and extension of the Detroit-Windsor Tunnel lease to a Syncora subsidiary and a 30-year lease of a parking garage below Grand Circus Park. Syncora will also get $6.25 million in settlement credits to be used on eligible properties including Joe Louis Arena, other parking assets and real property located within three miles of the tunnel.
Meanwhile, Financial Guaranty Insurance Company of New York, another bond insurer, said that they intend to continue their objections to the city’s reorganization plan.
So more closed-door sessions are in store as Jones Day lawyers offer up more of the city’s assets to appease Wall Street interests.
At the beginning of the bankruptcy trial, Judge Rhodes said he was not going to allow crisis thinking to control the process. He sent Orr and company back twice to rethink their generosity to banks. He said he would not accept a plan that did not seriously look at how to leave the city in a stronger position after bankruptcy.
Now we are in a feeding frenzy. Syncora and Financial Guaranty Insurance are not only being given assets, but they are also laying claim to income streams. All of this is to protect their business of insuring banks that made questionable deals.
The essence of Kevyn Orr’s plan to get money to run the city includes depending on increased parking fines, outrageous fees for truancy and curfew violations, collection of back water bills from the poorest citizens, and refinancing debt.
Perhaps Mr. Orr has been too busy preparing for court to have paid much attention to the news over the summer. He might have missed the fact that one of the main reasons for the hostilities between the police and the community of Ferguson was the simple fact that Ferguson tries to finance its budget through fees and fines. This is the number two item in their annual budget.
This is the direction Orr and company are pushing Detroit. Everything of value will be given away. Everything that could be turned into an asset to support the city will go to banks, corporate creditors and new authorities. Services from water and education to fire and police protection will be financed on a pay as you use basis. The historic tensions between the police and community will be intensified, as they become the new “tax collectors” with a vested interest in more arrests, more tickets, and more fines.
No open, democratic process would support any of these decisions. Voices for a fair, just, inclusive city are finding new ways to be heard. We have a vision of a different kind of city.