TIME Newsmaker Interview

Gov. Rick Snyder Explains How Detroit Was Saved

Michigan Governor Rick Snyder holds a rebate check for $1.2 million dollars to hand to Detroit Mayor Mike Duggan during a news conference discussing the city of Detroit exiting from bankruptcy in Detroit
Michigan Governor Rick Snyder holds a rebate check for $1.2 million dollars to hand to Detroit Mayor Mike Duggan during a news conference discussing the city of Detroit exiting from bankruptcy in Detroit, on Dec. 10, 2014. Rebecca Cook—Reuters

'It was a tough call to decide to go into bankruptcy'

Four years after taking office, the bookish Michigan Gov. Rick Snyder marked the completion of his toughest challenge Wednesday: saving the beleaguered city of Detroit from economic collapse.

While the city’s headwinds are from from over, it emerged from history’s largest municipal bankruptcy with $7 billion fewer obligations and identifying $1.7 billion that could be reinvested over the next decade. Snyder, an accountant and former venture capitalist elected to his second term as a Republican last month, says he now plans to share the Detroit turnaround story to the nation.

“I do want to tell the Michigan message more to the country, of our comeback, because a lot of people don’t recognize what a success we’ve had, what a success Detroit’s becoming. ” Snyder told TIME Wednesday as the paperwork restoring the city’s control over its own finances was being filed. “So it’s important to tell that story.”

But Snyder, who has been talked about as a potential Republican presidential contender, indicated he doesn’t have his eyes on the White House in 2016. “In terms of other offices, I’m very happy being governor,” he said.

Snyder said the country could learn from his philosophy of “relentless positive action,” which he describes as using the goodwill from solving one problem to solving the next.

“There’s too much ‘R’ and ‘D,’ there’s too much ‘liberal’ and ‘conservative,” he said. “We need people to recognize that we’re all Michiganders, and in the country that we’re all Americans, and we should be focused on problem solving.”

“What would Washington be like if everyone agreed not to fight or blame one another,” he added. “There’d be a whole lot of time to get work done.”

Q: What worked in Detroit?

A: What we planned to have happened. Actually it worked well. It was an extremely difficult process. It was a tough call to decide to go into bankruptcy, but again, we set an aggressive timetable. And the good part is, it turned out very well. It was a difficult situation. And I always want to recognize that there are retirees making sacrifices, other people making sacrifices. But for the circumstances we were in, this is a very constructive, positive outcome that really positions the city to start a new chapter and grow.

Q: Are you already seeing the results?

A: There’s a lot of them, and it’s been ongoing. As we’ve gone through this process, developments, particularly in midtown and downtown Detroit continue to rebound. For example, Little Caesar’s just announced a new headquarters building, the first corporate headquarters building being built in a decade, in Detroit. That just got announced today. So, that’s the kind of good thing going on as part of the entertainment district area that they are developing.

I made a trip to China just a couple of weeks ago and it was really interesting. I’ve made four trips in four years to China to build relationships there and when I went four years ago and three years ago and last year, I’d get plenty in a negative context about Detroit. This trip it was largely positive questions and actually not a lot of questions about Detroit [finances], more general interest in Detroit and Michigan.

Q: How did you marshal the various interests in the city, in many cases convincing people to see their benefits cut for the sake of the city’s financial survival?

A: I’m proud of what I’ve done, but I also need to give a great credit to Kevin Orr, the judge, the mediators, there were a lot of great people, the mayor, everyone worked hard on a lot of these issues as time passed. There are at least two key things that you always need to focus on when you deal with a lot of these discussions—they also apply out of bankruptcy, anytime you’re dealing with these issues. The first one is, to get people to really agree on what are the facts. A lot of times people work on an issue or take a position that’s an emotional response or kind of a historical response, versus really digging into what’s the factual context. Because, in the bankruptcy for example, there simply were not the resources, so something had to be reduced, and how do you do that in a thoughtful way. And the second piece is building trust with people, getting people to agree that difficult things may need to be done, but here’s a more constructive way to do it where it’s not about who wins and who loses, but how do you create an environment where people can be successful together over a longer period of time.

Q: Is the city out of the woods yet? How confident are you that in can survive any challenges that come its way.

A: I wouldn’t use the word ‘any,’ because you could think of circumstances that could put any community or any place in the country in difficulty depending on how severe it was. But in the context of saying, now is it in a comparable fashion or in a potentially successful fashion like many other urban areas, it’s clearly well positioned for that. And I say that under two different criteria. One is from a process point of view, that we’ve had a $7 billion reduction in liabilities, about $1.7 billion in reinvestment resources being identified over the next 10 years under a base plan for the city, a financial review commission that’s there to provide an oversight role like what happened in DC and New York City, to help make sure the city government is fulfilling their role responsibly in terms of budgeting. So those are all process/procedural things that are helpful. And then from a people point of view, we have a mayor and city council that have been good partners and successful partners on a number of efforts already and they’re continuing. So I think that’s set the framework for success and the ability to say that people are focusing now on the growth of Detroit.

Q: Now that you have this done, what are your next priorities?

A: A couple of them are wrapping up. We’re working on transportation funding right now, transportation infrastructure funding in the lame duck right now. I’d love to get that done. That’s something I’ve been calling for for a couple of years. But beyond that, I’m exciting about where Michigan’s poised. We’re now a top-tier state. We need to get that message out to the rest of the country. And in terms of priorities, I think we have a huge opportunity to lead the nation in filling skilled trades jobs and re-establishing a career/technical education track in our state second-to-none. Because if you stop to look at one of the great challenges you are seeing now with companies and organizations, they’re out looking for people with the right skills, and we have a lot of people, talented people, looking for work that need those skills. So the jurisdiction that does the best at leading in that is going to have a big advantage. And Michigan is going to be number one in doing that.

Q: When you say skilled trades jobs, are you referring to manufacturing? Is manufacturing coming back?

A: Yeah, and we have been. We’re number one in adding manufacturing jobs and it’s coming back strong. But we also need to redefine the skilled trades, because historically people tended to think of them as the welder, plumber, electrician, and those are great professions, but if you’re in manufacturing today, you’re a skilled tradesperson most likely. If you’re in agriculture today, you’re driving a $250,000 tractor, a $500,000 combine, you’re a skilled tradesperson. So, this is a very pervasive issue. A lot of times we overly-encourage people, and tell all of our young people to go get a university degree when in many cases, they would be just as well off if they’d have looked at a career tech-ed track and being successful there. So we need to have two parallel tracks that are both well-respected and honorable.

Q: You saw what happened in Ferguson and the national conversation that has erupted. What are your views on it?

A: What happened in Ferguson is very troubling, in terms of the whole situation, and it shows that there’s a lot of work that still needs to be done in terms of relationship-building. So I think it really highlights that people thought improvement had happened, but that there’s much more work to be done. And I’m proud to say in Michigan that we’ve been proactive on that. I don’t take it for granted. That’s something you have to actively work on and build those relationships. And we’ve been doing that in a number of our urban areas. I’m proud of the work, again in Detroit, but also in communities like Flint and Saginaw in particular. We’ve spent a lot, both of my time, but also some of our key departments in state government, the Michigan state police, human services being proactive, trying to partner with the local community itself, the leadership there, the local criminal justice system, the courts, the faith-based community, talking about these issues and how do we make sure we’re building bridges, building relationships that are deep enough to be prepared in case you have one of these terrible events happen.

Q: You’re looking to tell Michigan’s story to the nation, but what about you? Are you looking to take on a national role, perhaps a 2016 campaign?

A: As I said, I’m very active on some great next steps for Michigan, in terms of this career-tech education track, some huge initiatives. I also what to get out—I do want to tell the Michigan message more to the country, of our comeback, because a lot of people don’t recognize what a success we’ve had, what a success Detroit’s becoming. So it’s important to tell that story. But in terms of other offices, I’m very happy being governor. What I would say to you is, if you look towards the future in 2016, the best candidate will be a governor most likely in my view, and should be a governor.

Q: Any particular governor?

A: The good part is, there’s a strong group of Republican governors. If you look at the Midwest in particular, there’s a great group there. It’s good to see that this is where good things are happening in government.

Q: What’s your message to Washington and the country in general?

A: This is actually a subset of the bigger Michigan story. In the public sector in particular, but in our political culture, we need to rise above politics. There’s too much ‘R’ and ‘D,’ there’s too much ‘liberal’ and ‘conservative.’ We need people to recognize that we’re all Michiganders, and in the country that we’re all Americans, and we should be focused on problem solving. And that’s where I’ve used my philosophy of ‘relentless positive action’ for four years now and it’s been very successful. And I tell people: ‘I don’t fight with anybody. I don’t blame anybody. You didn’t hire me to do that. You hired me to solve problems.’ And if you solve these problems, it creates a much more positive atmosphere to solve the next problem, and that’s how you get on a very strong comeback path which is what we’re seeing in Detroit and in Michigan.

TIME crimes

Postal Worker Stole 2,000 Pieces of Mail Because ‘I Was Bored’

At least she was honest?

Detroit postal worker Sharon Berrien didn’t steal some 2,000 pieces of mail to collect those $20 birthday checks from Grandma alone. No, there was a deeper motivation: ennui.

“I was bored,” Berrien told investigators after she was charged with stealing mail by federal authorities Monday.

Of course, Berrein took the money, the Associated Press said. The accused said she kept $1,000 to $1,500 and littered the leftover mail — taken out of a Detroit mail processing center — along Interstate 94. Sightings of abandoned greeting cards keyed authorities into the fact that something was amiss. A probe led to the Nov. 21 discovery of 800 pieces of mail in Berrein’s trash.

As a cure for future stints of boredom, might we suggest the podcast Serial?

[AP]

TIME cities

Power Has Been Restored In Detroit Following a 7-Hour Outage

Detroit Power Outage
Detroit fire fighters and EMS responded to the Coleman A. Young Municipal Center to rescue people from elevators and assist others down the stairs after a massive power outage hit downtown Detroit, Tuesday, Dec. 2, 2014. Diane Weiss—AP

Schools, colleges and public transportation are expected to resume normal operations Wednesday morning

Detroit’s electricity grid was restored Tuesday night, after an outage that saw large parts of the city — including schools and hospitals — lose power for about 7 hours.

The power went out at 10.30 a.m. and was completely restored by 5.15 p.m., Associated Press reports.

Among the major institutions affected were Detroit Receiving Hospital, which had to rely on backup power, and Wayne State University, which cancelled all classes for the second half of the day.

The university, and several public schools that were forced to declare a half-day, will reopen Wednesday, according to the Detroit Free Press.

A statement from city authorities said the outage also affected 740 traffic signals and 36 fire stations. It said that the DTE Energy Company has taken over the power grid’s operation and is in the process of an 18-month inspection of the system.

“This is a case where a part of the old system that hadn’t failed before failed,” said city mayor Mike Duggan, “Every month that goes by, we’ll be more and more on a more modern system and the likelihood of this happening will go down. But it’s part of rebuilding the city.”

TIME cities

Detroit Hit by Massive Power Outage

Michigan Gov And Detroit Emergency City Manager Orr Discuss Bankruptcy Filing
A view of Downtown Detroit on July 19, 2013. Bill Pugliano—Getty Images

Fire stations, schools and office towers among the approximately 100 buildings without power

A sprawling power failure in downtown Detroit forced widespread closures and evacuations of buildings across the city on Tuesday.

City officials confirmed that a power grid went down Tuesday morning around 10:30 am, plunging courts, fire stations and office towers into darkness, according to reports by ABC News affiliate, WXYZ Detroit. A spokesperson for DTE Energy told USA Today that roughly 100 buildings had been affected.

The outage has forced some fire stations to switch on back-up generators, USA Today reports, and prompted a growing number of schools to close for the day. Wayne State University listed more than 40 buildings on campus affected by the outage.

Pictures of darkened buildings were shared on Twitter throughout the morning. The exact cause of the outage is still unknown.

 

TIME Sports

Here’s Why the Detroit Lions Always Play on Thanksgiving

Nov. 29, 1954: Bobby Layne, Detroit Lions TIME

The 7-4 team hosted its first Turkey Day game exactly 80 years ago

On Thanksgiving Day, at 12:30 p.m., the Detroit Lions will host the Chicago Bears.

Which, of course, is just a variation on what they do every single Thanksgiving. Football fans will note that the Lions, as well as the Cowboys, host on Thanksgiving every year — and, in fact, the Lions hosted the Bears on the very first Thanksgiving NFL game the team ever played, in 1934.

According to the Pro Football Hall of Fame, playing football on Thanksigiving wasn’t exactly new when the Lions moved to Michigan from Ohio that year. But at the time, college and high-school ball were far more important to American culture than the NFL was; at that point, TIME reported that NFL games were “less colorful than college football and lacking cheering sections, mascots and goalpost scuffles.” (And that’s even though some teams gave away tickets, rather than selling them, in order to fill the stands.) Accordingly, college and high-school teams were the ones that established it as a big day for the sport.

But, in 1934, the owner of the Lions decided to see if he could get his new team noticed, so he scheduled one of the team’s most important games for the holiday, even though there was no tradition of Thanksgiving football in Detroit at the time. The Lions went into the game with a 10-1 record; the Bears were 11-0. The promise of a late-season chance to tie for first in the league, and the opportunity to see it happen on a day off from work, helped tickets sell out. Though the Bears won, the Lions got to keep the tradition of hosting — not least because their owner, a radio executive, had made sure that the game was broadcast nationwide. During the last 80 years, the only Thanksgivings on which the Lions have not hosted were six seasons during World War II. The Cowboys started hosting on Thanksgiving Day in the 1960s and have done so nearly every year since; the NFL began to regularly include a third Thanksgiving game just a few years ago.

Within 20 years of that 1934 game, professional football started to surge past the college game — and the Lions were no longer the little-known team that started the tradition. In fact, they were good enough that a TIME cover story on Thanksgiving week of 1954 proclaimed them the best in the game:

Of all the pro teams, the best (for the last three seasons) is the Detroit Lions. And the best of all the Lions, the best quarterback in the world, is Robert Lawrence Layne, a blond, bandy-legged Texan with a prairie squint in his narrow blue eyes and an unathletic paunch puffing out his ample frame (6 ft. 1 in., 195 Ibs.). Layne, a T-formation specialist, led the Lions out of the National Football League’s cellar, called the plays and fired the passes that won them the national championship in 1952 and 1953. He is currently doing his bruising best to repeat that performance. As of this week, the Lions have been defeated only once (by the San Francisco Forty Niners).

That Thanksgiving — after the story went to print — they would go on to beat the Green Bay Packers 28–24.

Read the full story here, in the TIME Vault: A Pride of Lions

TIME Television

Viola Davis Is Creating a Show About Detroit’s First Female Prosecutor

ABC's 2014 Summer TCA Tour Portraits
ABC's 'How to Get Away with Murder' actress Viola Davis poses for a portrait during ABC's 2014 TCA summer press tour at The Beverly Hilton Hotel on July 15, 2014 in Beverly Hills. Christopher Polk—Getty Images

Kym Worthy has been called 'the toughest woman in Detroit'

Viola Davis, who plays defense attorney Annalise Keating on ABC’s How to Get Away with Murder, is trying her hand at exploring the other side of the courtroom. She’s producing a new ABC drama inspired by Kym Worthy, the badass Detroit prosecutor who has led the charge to investigate the city’s 11,000 backlogged rape kits. (Read more about her quest to revive cold cases here.)

Worthy, who has been called the toughest woman in Detroit, is known for prosecuting former mayor Kwame Kilpatrick for obstruction of justice, conspiracy, and perjury, which led to his resignation from office (along with other high-profile scandals.) A sexual assault survivor herself, she’s also revamped the way her office handles rape cases, pioneering a “victim-centered” approach that puts the emphasis on catching rapists rather than questioning victims.

MORE: Here’s what happens when you get a rape kit exam

Viola and her producing partner Julius Tennon will be joined by Debra Martin Chase (Sparkle) to create the new drama Conviction, which will be written by Jason Wilborn (Damages), Deadline reports. Worthy is on board as a consultant.

[DEADLINE]

TIME Education

Inside Detroit’s Plan to Woo Middle-Class Parents to Its Public Schools

Detroit Public School
Detroit Public Schools has closed more than 80 schools due to severe drops in enrollment. Sarah Butrymowicz—Hechinger Report

A central office war room and customer-service tips from Target

Dara Hill diligently scribbled notes as the principal of Detroit’s Nichols Elementary-Middle School led her and several of her neighbors on a tour of the school. A room for special education students was brimming with stuffed animals, but the hallways were sparsely decorated. Work displayed in the kindergarten classroom was charming and developmentally appropriate. But why were there six students sitting to the side during gym class?

Hill has two more years before she has to pick a school for her four-year-old daughter, but she and her husband are starting their search now because she is overwhelmed by the number of options in Detroit, and underwhelmed by the quality of many of them. To help with the decision, Hill joined The Best Classroom Project, a Facebook group formed to help parents navigate Detroit’s large and under-resourced school system. Since beginning in 2013, the group has grown to more than 250 parents, a mostly middle and upper-middle class mix of life-long residents and recent transplants. Several of them care about sending their children to public schools. And they are precisely the type of people Detroit school officials need to court as the city claws its way back from bankruptcy.

Thirteen years ago, Detroit’s school system had 200,000 students. Today, it has less than 50,000. It’s saddled with a $127 million deficit and its students perform well below the rest of the state. In the 2013-14 school year, for instance, just 14.6% of Detroit third-graders and 7% of city 11th-graders passed the state math test, according to Michigan education data. And graduation rates also lag. Sixty-five percent of students graduated from Detroit public schools in four years in 2012-13. The state average is 77%.

Such numbers make it tough to convince parents like Hill, a professor of education at the University of Michigan-Dearborn, to commit to the city’s public schools. A statewide school choice system allows students in Detroit to attend any school in the district or pick from dozens of charter schools, but it also lets them apply to suburban schools. And many families with the means choose to bypass the system entirely and send their children to area private schools.

Keeping middle class families in the Detroit school system is particularly important because there are only so many of them. About 38% of Detroit households earn more than $35,000 compared to 56% of households across America, according to 2012 American Community Survey figures published by the Census Bureau. For the city to grow its tax base, the schools need to improve. But to significantly improve, the school system needs more students – and the money that comes with them.

“We recognize we’re a central anchor to the city,” says Roderick Brown, the district’s chief strategy officer and the man charged with finding ways to convince more families to pick the public school system. “Our success is tied to the success of the city.”

The War Room

Hill should be an easy mark for the school district. The daughter of German and Jamaican immigrants, she graduated from Detroit Public Schools in the 1980s and fondly remembers a time when black and white students would walk together to the Detroit Public Library after middle school. She met her husband in high school and stayed in the city after graduating, teaching first in the city and then in a nearby suburb.

She watched as Detroit continued a decline that began in the 1960s. And the city’s decades of struggle have been intertwined with those of the school system. Detroit Public Schools was first placed under state control in 1999 and then again in 2009 as test scores continued to falter. The district’s enrollment has fallen to 49,800 students as families moved or opted for charters that promised — but didn’t always deliver — better results. Nearly 40,000 students in the city now attend charter schools. Detroit Public Schools has shuttered more than 80 schools and the state has taken over 15 of the lowest performers in the past 5 years.

On top of that, in May, the district missed the deadline for applying for about $4 million in federal Head Start money because of technical problems. Officials said they would find money elsewhere to offer preschool to all students this school year, not just low-income ones, but to Hill, the incident is indicative of larger administrative problems. “There are things going on that are really good at many of the school levels, but as a district, it’s like, ‘Oh get it together,’” she said. “It just makes you wonder.”

The process of reassuring her begins in a conference room in the school system’s downtown headquarters that has been turned into a campaign-style war room. A translated quote from Sun Tzu’s “The Art of War” hangs on one wall, next to a poster titled., “THE QUESTION: How shall DPS compete and win the marketplace?” The answer: “Empowered DPS employee’s operating via synchronized, lean agile and leveraged work efforts.”

The business jargon is evidence of Brown’s time at General Motors, where he was a manager of strategic facilities planning at the nation’s largest automaker. He’s brought more than the lingo with him to DPS. Brown thinks in terms of markets and supply chains, and argues that along with improving academics, Detroit Public Schools also must improve the overall customer experience for students and parents. That’s why district officials invited Target to train school office workers in customer service. Among the tricks: smile when answering the phone to sound friendlier. “We didn’t do the best job of serving our existing customer base,” Brown says.

The effort to change that started in 2009, when then-Emergency Manager Robert Bobb launched an “I’m in” campaign encouraging families to enroll in Detroit Public Schools. Since then, improvements such as universal pre-kindergarten and increased test scores, have been advertised with flyers, open houses and old-fashioned door-knocking.

“You can’t win this on the defensive,” says Steve Wasko, the district’s assistant superintendent for community relations. “The only way to survive and thrive is to be on the offensive.”

The first step was trying to ensure basics like making schools safe. District officials gathered community volunteers to walk with children to school and are working with the city’s lighting authority to get broken streetlights near schools replaced before all of the other busted ones in town. And they designated 20 schools as community hubs, to be open 12 hours a day as resource-centers for parents.

The district has also launched new academic programs, including the three-year-old Benjamin Carson High School of Medicine and Technology, named for the retired Johns Hopkins neurosurgeon who attended Detroit public schools. Many students there said they returned to the district from charter schools because they were attracted by Carson’s small size and focus on science. Yet even Carson has struggled. In the spring, in the school’s first year of state testing, only 9% of 11th-graders passed the state math test and just 1% passed the science exam. They fared better in reading and writing, with about 40% considered proficient.

Similarly, music or art is now taught at every elementary school, but many schools can’t afford to offer both.

But there has been progress. Last fall, enrollment barely dipped after a more than a decade in which it dropped by about 10% every year. Daily attendance is up to 86%, which is meaningful for a system that in 2011 had to return more than $4 million in state funding for having an average daily attendance rate below 75%. And some schools have begun to make gains on state tests that outpace the rate of improvement in the rest of the state.

Uphill Battle

Three weeks before Hill and her peers observed classes at Nichols, a group of volunteers with the nonprofit group Excellent Schools Detroit wandered around two pre-kindergarten classrooms at Bow Elementary School in a heavily blighted neighborhood in the Northwest of the city. In one room, a handful of children gathered around an iPad, while another group paraded through the classroom playing tambourines and wooden blocks. The volunteers made careful notes as the lights flickered. The day before, the power had gone out entirely. (Some schools in Detroit lost as many as 13 days of school last year because of power outages caused by the city’s outdated electrical grid.)

Bow, where 86% of students receive free or discounted lunch, is emblematic of the obstacles DPS faces as it attempts to shed its poor reputation. The school was one of 29 to receive a D this year in the influential rankings published by Excellent Schools Detroit. Only one K-8 Detroit Public School got an A.

For parents in the neighborhood, with few resources to get their children to schools miles away or little knowledge of how to navigate the school-choice process, the only other option is a similarly low-performing K-8 charter school across the street, which Bow’s former principal, Ernestine Woodward says has been drawing away students for years. Last summer staff from Bow knocked on every door in the neighborhood trying to get families back.

The school is doing the best it can with the resources it has, says Woodward, who retired at the end of last year. There’s not nearly enough money for the technology she would have liked, nor for social workers and other services to meet the needs of her students. But they do have afterschool and arts programs and make an effort to get parents into the school whenever possible.

Yet with a reputation for poor performance, it’s a school that Hill would never consider. And Nichols is out of the running, too, even though it should have been a good option. Nichols typically performs at or slightly above average on state tests. And it’s a five-minute walk from Hill’s home in Indian Village, one of the few neighborhoods that look untouched by Detroit’s downturn. But Hill found the class sizes were too large, and she didn’t like that the English curriculum required teachers to follow a script. She’s now leaning toward sending her daughter to a private school, underscoring how difficult it will be for Brown and DPS to convince parents like her.

“Can the public schools really appeal to us?” she says. “I don’t know that they have the resources or the ability to do that right now.”

This story was produced by the Hechinger Report, a nonprofit, nonpartisan education-news outlet affiliated with Teachers College, Columbia University.

TIME Autos

Ford Recalls 65,000 Fusion Vehicles

There are no known accidents caused by the issue

Ford has recalled 65,000 Fusion cars for noncompliance with a regulation on “theft protection and rollaway prevention.

The automaker announced Tuesday said that it is not aware of any accidents or injuries caused by the issue, but said that it would voluntarily fix the more than 56,000 affected vehicles in the United States, as well as 6,000 in Canada and 2,300 in Mexico.

The 65,000 vehicles recalled Tuesday is small in comparison to General Motors’ notorious recall this year, when more than 1 million vehicles worldwide were pulled over a faulty ignition switch that caused the deaths of at least 30 people.

TIME cities

Judge Approves Detroit Bankruptcy

The Motor City just took a major step toward recovery

Detroit marked a major milestone along its road back to economic health on Friday, when a judge approved its economic recovery plan, less than a year and a half after the Motor City became, by far, the biggest-ever U.S. public entity to declare bankruptcy.

The Michigan metropolis had been gripped in a steep decline for years leading up to its declaration of bankruptcy on July 18, 2013. The departure of the auto industry from Detroit took with it a large chunk of employment opportunities, and precipitated a mass movement of people out of town, spurring urban decay that was exacerbated by the housing and financial crises.

In February 2014, the city presented its plan, which included deep cuts to pension payments for general city retirees and smaller cuts to police and fire pensions, as well as new funds pledged to improve city services and speed up demolition of empty and decrepit buildings strewn throughout the city.

The plan that Judge Steven Rhodes approved on Friday cuts pension payments by just 4.5%, averting deeper cuts with an infusion of cash into the pension system from the state of Michigan and private foundations. Under the plan, Detroit sheds $7 billion in debt and invests $1 billion in city services. Detroit’s bankruptcy timeline, under a year from the day the city turned out its pockets to a judge approving the recovering plan, is unusually quick—Vallejo, California, for instance, spent three years in bankruptcy.

The deal also negates the need to sell off the city art museum’s world class collection.

[AP]

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser