How is Detroit doing 10 years after it filed for bankruptcy? : NPR

It’s been a decade since Detroit became the largest U.S. city to file for bankruptcy. It’s made a lot of progress since then but still faces challenges.

STEVE INSKEEP, HOST:

Ten years ago today, in 2013, Detroit filed for bankruptcy protection. It was the largest U.S. city ever to do that. Quinn Klinefelter from our member station WDET asked how the city is doing now.

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QUINN KLINEFELTER, BYLINE: At a recent ribbon-cutting for a refurbished Detroit hotel, the wealthiest person in Michigan, billionaire businessman Dan Gilbert, delivers what’s become a Motor City mantra. Detroit is coming back.

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DAN GILBERT: Our goal is to provide the spark that will ignite other businesses, both small and large, as well as developers, to get involved, attracting further investment talent to come here and be part of this.

KLINEFELTER: Gilbert moved his corporate headquarters to the city a few years before Detroit entered bankruptcy in 2013. And after Detroit shed about $7 billion in debt, Gilbert and others poured investments into the city, especially in a downtown that sprouted trendy restaurants and upscale apartments. It amazed Detroit natives like Alice Cooper – yes, the rock star Alice Cooper – who said during a visit before the pandemic erupted that the previously boarded-up area used to resemble one of his ghoulish stage shows.

ALICE COOPER: You were terrified to go downtown Detroit before. Now it’s, like, the coolest place around. I kind of went, yeah – downtown Detroit needs a shot, you know, in the butt.

GILBERT: Decades of financial mismanagement and population decline drove Detroit to the brink. State officials took over the city’s finances until the mayor and city council produced three straight balanced budgets. Now, Detroit Mayor Mike Duggan says the city has no need to use money like federal pandemic relief funds to plug any deficits.

MIKE DUGGAN: Which means we can take the American Rescue Plan money and use it to build affordable housing, use it to build parks, use it to upgrade our residents’ skills. And Wall Street just upgraded our credit rating again.

KLINEFELTER: Analysts like S&P Global’s Randy Layman praised the city’s efforts to erase thousands of blighted buildings, even as he cautions Detroit remains very reliant on the shifting fortunes of its manufacturing base.

RANDY LAYMAN: There are still high poverty rates, low income in the city that just create practical and political challenges to raising revenue.

KLINEFELTER: The disparity between the flourishing downtown and impoverished neighborhoods still fuels discontent. Driving towards downtown, Detroiter Duane Johnson – no, not the actor Dwayne Johnson – says he watched the city sell vacant properties at cut-rate prices. But Johnson says it did not help him or others he knows who stayed in Detroit through the bankruptcy process.

DUANE JOHNSON: It’s like a curse. Rent goes up. They are developing those new apartments or rehabbing that new house for people who make a higher income. And with that, it’s pushing people out.

KLINEFELTER: The city repaired thousands of broken streetlights and improved slow police and emergency service response times, yet Detroit continues to have one of the highest per capita violent crime rates in the country. Johnson notes there’s a very visible police and private security presence downtown, but he says he can’t feel that on his block.

JOHNSON: In the city – in the inner city, they react to crime. So after you are victimized is when they show up. But in downtown, their job is to prevent it from happening in the first place. So that’s the difference.

KLINEFELTER: The bankruptcy is also still impacting one of Detroit’s major creditors – city government retirees whose pensions were cut. Detroit’s resuming pension payments after other entities covered them for the past decade. But former workers like Cecily McClellan, who participated in a city annuity fund, lost thousands of dollars in savings when bankruptcy attorneys decided they’d been paid excessive interest and demanded it back.

CECILY MCCLELLAN: Then they snuck up on us. They charged us interest on the money that we are being clawed back. So therefore, now it’s 10 years into the plan, and we still owe over two-thirds of what we owed originally.

KLINEFELTER: Other retirees found they had too little money after bankruptcy to stay retired.

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KLINEFELTER: At a small construction site, former Detroit fire battalion chief George Orzech builds a deck for the widow of a deceased police officer. He says he’s worked construction on the side all his life, but other retirees are doing it now to survive. Police and fire department retirees were spared big pension cuts, but Orzech says they lost most of their health care coverage.

GEORGE ORZECH: There’s not a day that doesn’t go by I don’t think about it, but it’s 10 years ago now. I was able to at least come away with a pension, and I’m walking, fairly healthy. But there’s a lot of people that aren’t like that.

KLINEFELTER: The financial health of the Motor City itself continues to improve as it steers away from the economic scrapheap it seemed headed towards before bankruptcy. It just remains to be seen how many Detroiters come along for the ride.

For NPR News, I’m Quinn Klinefelter in Detroit.

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