[Plantagenet]

The judge in the bankruptcy case ruled just this morning that pensions with former city employees could be reduced as part of the bankruptcy proceedings.

This is very bad news for all in the USA who rely on social security, federal pensions, state, city pensions, etc., as almost every government pension system in the US is underfunded.

[Tanada]

The problem is most government pension systems have been chronically underfunded because politicians try and always kick the can of funding way far down the road while promising to spend the money today. Sooner or later the can either disintegrates from too many kicks or the road runs out.

Detroit currently has two people drawing pensions for every one actively employed. No system set up like that can work in deficit mode, you need three or four people paying in for every one drawing out unless you have strongly pre-funded the system.

[Lore]

Detroit, like many other cities around the country increased pension benefits in lieu of raises. Now that it's coming time to pay out, bankruptcies are allowing city governments to renege on the pension allowance, cutting them and bypassing state pension laws. The average Detroit city worker is presently making around $19k/year with all their retiree benefits. Pensions adding to approximately half of the total.

Nationally, most non supervisory city workers average a present salary in the mid 30s. While police and fire workers make an average in the mid 50s.

[sparky]

.
several papers mentioned the employees pension funds as vulnerable in quite a lot of states and cities
California was mentioned several times

[Keith_McClary]

Detroit, like many other cities around the country increased pension benefits in lieu of raises. Now that it's coming time to pay out, bankruptcies are allowing city governments to renege on the pension allowance

Some corporations did the same, taking profits for dividends and executive "compensation", leaving the workers with unfunded promises.

[Tanada]

Detroit, like many other cities around the country increased pension benefits in lieu of raises. Now that it's coming time to pay out, bankruptcies are allowing city governments to renege on the pension allowance

Some corporations did the same, taking profits for dividends and executive "compensation", leaving the workers with unfunded promises.

When a Corporation raids the pension fund there is legal recourse, sadly when the politicians do the same thing they try and exempt themselves from the laws meant to protect the workers.

[Plantagenet]

Giant sinkhole opens up in downtown Detroit in front of the GM headquarters building

Sinkhole emits giant sucking sound in Detroit

How perfect. How symbolic.

----a giant sinkhole in Detroit, right in front of the GM building.

[Subjectivist]

Our fair neighbor to the north is making news again, the Chrysler buyout by Fiat is completed, and then I saw this;

The numbers here show us a few things. Obviously, Detroit was not the only city in the region to suffer from the decline of U.S. manufacturing. The sector's 2010 employment figures are well below the 2000 levels in all seven cities. It's also evident that the decline began before the Great Recession in 2008.

But it's clear that Detroit's manufacturing sector suffered more than the cities around it. From 2000 to 2010, the city lost more than 52 percent of its manufacturing jobs. The other six metros were also slammed, dropping an average of 38 percent. That's still nearly 15 points better than Detroit's drop.

Compounding the problem was the fact that Detroit placed so many of its employment eggs in the manufacturing basket. The mean total job loss for the six other cities in the 2000-2010 period was 6.5 percent. Detroit's job total, meanwhile, plummeted 21 percent — another 15-point disparity, and a sign of the city's poorly diversified economy.

McDonald ends on a positive note. The three big Detroit automakers not only survived the recession but are profitable again and have even added manufacturing jobs. Meanwhile the city center is reconstituting itself around a knowledge-based economy consisting of health, education, finance, and tech workers. "Is a major transformation of Detroit underway that will save the city?" asks McDonald. Everyone but L. Brooks Patterson sure hopes so.

http://www.theatlanticcities.com/jobs-a ... ties/8232/

[dinopello]

Downtown Detroit is becoming too expensive, pricing out current residents.

Five-year resident, Andrew Kopietz moved out of his one-bedroom in the downtown Lafayette Park neighborhood late last year after his rent was hiked to $1,100 from $840 a month.

"I work downtown and have never loved living somewhere as much as I do here," said Kopietz, a design director for D:Hive, which provides information about living in Detroit. But, "it seemed unfair to be forced to pay more."

Karl Wolf, 37, works as an assistant manager for Quicken and lives in Wyandotte, a small city 10 miles southwest of Detroit. He is eligible for the $20,000 forgivable loan and has been condo hunting for a couple of years, but he still can't seem to find a place he can afford.

"Apartments are prohibitively expensive, especially those that have been renovated, but even the shabbier ones are very pricey," he said.

[copious.abundance]

^
Related to that article above ...

Ladies and gentlemen, boys and girls. May I have your attention please: Detroit has bottomed.

I repeat: Detroit has reached its nadir and it's all uphill from here. The evidence has now become overwhelming. You heard it here first. A sample of some of the stuff happening there.

Exhibit A: This is a long article that made the NY Times a couple weeks ago:

Testing Ground for a New Detroit

DETROIT — Inell Byrd’s house has a leaky roof.

Walls are cracked, sections of ceiling are missing and the concrete porch is buckling. Most of the furniture is gone and random belongings like Christmas lights and a bicycle are scattered about, the result of preparations for a redecoration that Ms. Byrd has not been able to manage.

The front room is bare, its only contents a low-slung futon and a large flat-screen television. With her family finances in shambles, she briefly tried to sell the house.

And beyond her walls, she worries that her street — which still has handsome colonials, Tudors and other sprawling homes — abuts one that looks bombed out.

“You got these two beautiful blocks,” said Ms. Byrd, 41, a home health aide, referring to Arden Park Boulevard in the city’s historic North End, “and everything behind you is, I ain’t going to say Beirut, but basically it just fell off.”

But there is also immense potential in this shattered urban landscape, despite more than a half-century of government mismanagement and residential and industrial flight.

Mayor Mike Duggan, who took office in January, promised immediate improvements after the city hit a low point last year, becoming America’s largest to file for bankruptcy. The North End captures both the hope and challenge of the mayor’s pledge. So tracking what happens in this neighborhood this year and next will tell a lot about whether this metropolis, with nearly 690,000 residents, can rebuild.

“The North End is an area that has real potential to come back,” the mayor said in an interview. “It’s got a proud history in this city.”

Annexed by the city in the late 19th century, the North End once was the northernmost point in Detroit, bordering on the cities of Highland Park and Hamtramck. It quickly became a haven for the upper class.

These days it still has some of the city’s most glorious homes bordering some of its harshest blight. While it counts judges, doctors and other professionals in its ranks of homeowners, its remaining residents are mostly low-income blacks who bear the brunt of Detroit’s economic decline because of a legacy of confinement to the lowest-paid, least-skilled and least-mobile jobs.

[...]

[copious.abundance]

Exhibit B: Another recent big article in the NY Times. This made the front cover of the NY Times Magazine.

The Post-Post-Apocalyptic Detroit

In downtown Detroit, at the headquarters of the online-mortgage company Quicken Loans, there stands another downtown Detroit in miniature. The diorama, made of laser-cut acrylic and stretching out over 19 feet in length, is a riot of color and light: Every structure belonging to Quicken’s billionaire owner, Dan Gilbert, is topped in orange and illuminated from within, and Gilbert currently owns 60 of them, a lordly nine million square feet of real estate in all. He began picking up skyscrapers just three and a half years ago, one after another, paying as little as $8 a square foot. He bought five buildings surrounding Capitol Park, the seat of government when Michigan became a state in 1837. He snapped up the site of the old Hudson’s department store, where 12,000 employees catered to 100,000 customers daily in the 1950s. Many of Gilbert’s purchases are 20th-century architectural treasures, built when Detroit served as a hub of world industry. He bought a Daniel Burnham, a few Albert Kahns, a Minoru Yamasaki masterwork with a soaring glass atrium. “They’re like old-school sports cars,” said Dan Mullen, one of the executives who took over Quicken’s newly formed real estate arm. “These were buildings with so much character, so much history. They don’t exist anywhere else. And it was like, ‘Buy this parking garage, and we’ll throw in a skyscraper with it.’ ”

[...]

The belief in Detroit’s imminent revival has spread far beyond Dan Gilbert and the skyscrapers of downtown. Out in the neighborhoods, there is a legion of mini-Gilberts, longtime Detroiters and recent transplants alike, who have united around a conviction that the city has fallen as far as it can go — that the time to buy in is at hand. Just a couple of years after Detroit slid into what the national news media incessantly called a “post-apocalyptic” collapse, the city now teems with a post-post-apocalyptic optimism. When I visited this spring, Quicken Loans had a new slogan emblazoning its downtown office towers and company shuttles, and everyone I spoke with outside the city center seemed to be uttering it like a mantra: OPPORTUNITY DETROIT.

[...]

[copious.abundance]

Exhibit C: The Big Kahuna which was announced Sunday.

The guy who is developing this is the owner of Little Caesar's Pizza, a big Detroit casino, part owner of the Detroit Tigers and several other businesses, so he already has the money to build it. And he plans on building the whole thing at once starting this fall!

Hockey, housing and more: Ilitches unveil 'bold vision' for Red Wings arena district

Detroit’s new arena and entertainment district planned by the Ilitch family for the northern edge of downtown promises to be the city’s boldest and most significant development since the Renaissance Center of the 1970s — creating as many as 2,000 new residential units, dozens of shops, walkable European-style streets and perhaps the nation’s most innovative multipurpose arena.

Christopher Ilitch, president and CEO of his family’s Ilitch Holdings, provided the Free Press the first public renderings and details of the new Red Wings hockey arena and surrounding entertainment and residential district. In a lengthy interview late last week, Ilitch discussed his hopes and plans for the new and sprawling development, which he called “a very exciting and bold vision.”

“Our vision is to build out a sports and entertainment district that is world-class and rivals anything in the country, perhaps the world,” he said. “We’re not just building a hockey arena. It’s really about the district.”

The large-scale development, overseen by the Ilitches’ Olympia Development, will be integrated with the planned M-1 Rail line, Comerica Park, Ford Field, the Fox Theatre, MotorCity Casino Hotel, the Detroit Opera House and other attractions. The arena and various buildings and residential projects will be built on what are now mostly vacant lots encompassing dozens of blocks along and near Woodward Avenue.

Unlike other similar projects, the still-unnamed arena and a big portion of the entertainment district will be built at the same time, rising up together.

The family owns much of the land already and has been buying up lots around the long-economically challenged Cass Corridor and lining up a financing plan to bring the $650-million vision to reality. The new district will stretch from Grand River on the west to Ford Field and Brush Park on the east, and roughly 10 blocks from Grand Circus Park to Charlotte on the north.

[...]

Some renderings.









And a map showing the new districts being created by the development.



And there's a lot, lot more in addition to all this!

[dolanbaker]

Looks like the lessons of peak oil are being learned.

[Lore]

The Renaissance Center was and is a failure. There is no reason to believe a sports arena surrounded by unpopulated businesses and empty residential high rises will make much difference. You need center city jobs, and good ones.

You have to man an expedition crew now to get from the suburbs to downtown. With nothing but hostiles in between.

Their timing is perfect, just before the next financial bust.

[dolanbaker]

Yep, they need to create the opportunities for business to start and build decent accommodation for the staff as a starting point.
Exhibition centres & sports arenas come much later.

[dinopello]

The judge in the bankruptcy case ruled just this morning that pensions with former city employees could be reduced as part of the bankruptcy proceedings.

Former city employees vote overwhelmingly to cut their pensions

Pension cuts were approved in a landslide, according to results filed shortly before midnight Monday. The tally from 60 days of voting gives the city a boost as Judge Steven Rhodes determines whether Detroit's overall strategy to eliminate or reduce $18 billion in long-term debt is fair and feasible to all creditors.

"I want to thank city retirees and active employees who voted for casting aside the rhetoric and making an informed, positive decision about their future and the future of the city," said Kevyn Orr, the state-appointed emergency manager who has been handling Detroit's finances since March 2013.

[copious.abundance]

The Renaissance Center was and is a failure. There is no reason to believe a sports arena surrounded by unpopulated businesses and empty residential high rises will make much difference.

These are not going to be empty. Read dinopello's article just above my first one - there is actually a big shortage of apartments in downtown Detroit. I will show later a whole bunch of plans and construction for other apartments in downtown Detroit. Among other things, a lot of the old (1920's and 30's) office towers that had been sitting nearly or all-vacant for decades have been recently converted into apartments, and for the most part they are all leased up.

[copious.abundance]

5-story Royal Oak apartment building to break ground in spring

February 13, 2014

Construction on a new five-story, 48-unit apartment building in downtown Royal Oak is expected to begin in the spring.

Clinton Township-based developer Aragona Properties LLC garnered financing for the project and now awaits building permits from the city, the developer confirmed today.

The development is planned for 1.5 acres of vacant land on South Main Street south of East Lincoln Avenue. Besides luxury apartments, plans call for first-floor retail space.

Paul Aragona, CEO of Aragona Properties, said construction on the $13.5 million project is expected to be complete by the first quarter of 2015.

The building would be about 73,000 square feet, according to Marty Smith, principal at Southfield-based Siegal/Tuomaala Associates Architects & Planners Inc., the architecture firm on the project.

He expects to receive building permits from the city within a few weeks.

[...]

Michigan OKs incentives to turn 2 historic Detroit hotels into apartments

February 25, 2014

High demand for apartments and super-low vacancy rates in Detroit’s downtown and Midtown area are bringing still more apartment projects to the market.

The Michigan Strategic Fund approved incentives Tuesday for renovation projects to create apartments in two historic Detroit hotels — $3.5 million for the Strathmore in Midtown and $1 million for the Milner Hotel in the city’s central business district.

The Free Press reported in January that rents for apartments in downtown Detroit are spiking amid short supply, forcing out some young professionals who breathed fresh life into the city core.

On Tuesday, the strategic fund board approved funding for the planned development of 129 one- and two-bedroom apartments inside the blighted former Strathmore Hotel on Alexandrine near Cass Avenue and 61 apartments inside the historic Milner Hotel near Comerica Park, which closed in October 2012.

[...]

Of the units planned by Strathmore Apartments Limited Dividend Housing Association, 60% will be offered at market rate and 40% will be affordable housing, said Joe Martin, a program manager with the MEDC.

[...]

Ashley Owner is redeveloping the former Milner Hotel, where all 61 residential units will be priced at market rates, along with ground-floor and second-floor commercial developments, Martin said.

[...]

Many apartment managers report waiting lists or occupancy rates at or above 95%. The popular Live Midtown and Live Downtown incentive programs offered by major employers to subsidize moves by their workforces to downtown have resulted in hundreds of new residents moving in ...

$6.9 million Midtown apartment financing closes; construction to begin 'any day'

March 4, 2014

The former Tushiyah United Hebrew School at Kirby and St. Antoine streets in Midtown will be turned into 25 market-rate apartment units as part of a $6.9 million redevelopment now that the developer has closed on project financing.

Lead and asbestos abatement has been completed and construction on the building will begin "any day now," said Ian Wiesner, senior loan officer in the Ann Arbor office of Arlington, Va.-based Capital Impact Partners (formerly NCB Capital Impact), one of the lenders on the project.

[...]

There will be 21 one-bedroom units, 2 two-bedroom units and two studio units.

Construction is expected to be completed by the beginning of next year, Wiesner said.

[...]

[Lore]

The Renaissance Center was and is a failure. There is no reason to believe a sports arena surrounded by unpopulated businesses and empty residential high rises will make much difference.

These are not going to be empty. Read dinopello's article just above my first one - there is actually a big shortage of apartments in downtown Detroit. I will show later a whole bunch of plans and construction for other apartments in downtown Detroit. Among other things, a lot of the old (1920's and 30's) office towers that had been sitting nearly or all-vacant for decades have been recently converted into apartments, and for the most part they are all leased up.

I call this "Fake Detroit" Like Disney World, a made up purpose for being there, but the city itself is a hollowed out shadow of its former self. You have a lot of give away incentives in the beginning for people to work and live and then when the real check comes due, there is really nothing there but a facade.

My vision of starting over would be far different from trying to repeat the past and what essentially is already broken or breaking. The chance here would be to start something really unique and what the future needs.

[copious.abundance]

That entertainment district, if that's what you were referring to, is only one part of the revitalization. Old buildings are being refurbished at an increasing rate. The City of Detroit has a program in which they're auctioning city-owned houses that need lots of work but are still salvageable to people starting at $1000/each, under the condition that they have to bring the house up to spec within 6 months and then live in it themselves. Since the program started they've been auctioning about 2 homes per day. The website for the program is here:
http://buildingdetroit.org/Home
Here's the houses they've auctioned to date:
http://buildingdetroit.org/Home/SoldHouses

There's a lot more going on than just that "Disneyland" district.