The "grand bargain" that could help Detroit emerge from the biggest municipal bankruptcy in U.S. history is moving ahead.
On Tuesday the Big 3 U.S. automakers -- GM (GM), Chrysler and Ford (F) -- pledged $26 million to help the Detroit Institute of Arts stay off the auction block. Last week Michigan lawmakers approved $195 million in state aid for the ailing city. Altogether about $800 million will be needed to settle the bankruptcy.
The city's creditors, including retirees collecting pensions and bondholders, have until July 11 to vote on the plan, which in many cases will reduce the payouts they receive from the city. Then a trial will take place before Federal Bankruptcy Judge Steven Rhodes from mid-August to late September (it was recently delayed from starting in July), allowing city officials, bondholders and bond insurers to argue their support or opposition to the plan. Judge Rhodes is not expected to rule until late September at the earliest.
Ultimately, Detroit will be saved, says Josh Linkner, CEO and managing partner of Detroit Venture partners, which funds tech startups based in the city.
"So much revitalization is happening right now [that] in the central business district residential occupancy is at 99% and developers can't even keep up with demand," says Linkner, who is also the author of the new book The Road to Reinvention: How to Drive Disruption and Accelerate Transformation. "There are new restaurants, new art galleries popping up every day. We are really optimistic."
The self-described "multigenerational Detroiter" says Detroit's experience offers lessons for other cities, businesses and even individuals. "In the early 1900s Detroit was the Silicon Valley of our country ... but then we became complacent, stopped reinventing, stopped innovating, and our city really suffered," says Linkner. "We can't rely on previous successes. It's incumbent on us all to forge ahead ... and create something new."
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