Detroit Bankruptcy: Dan Gilbert Testifies Crime, Education, Blight Are City's Major Challenges
DETROIT (WWJ/AP) - Businessman Dan Gilbert has testified during Detroit's bankruptcy trial that the city's high crime rate, poor school system, unemployment and blighted neighborhoods are its major challenges.
The founder of mortgage lender Quicken Loans also said Wednesday that $850 million is needed to wipe out Detroit's blight, which includes tens of thousands of abandoned houses and trash-filled lots.
Gilbert was one of the leaders on a blight removal task force that looked at all city properties.
State-appointed emergency manager Kevyn Orr also is expected to testify Wednesday in the trial overseen by federal Judge Steven Rhodes. Rhodes is to decide if Detroit's plan to remove $7 billion in debt is fair to creditors.
Orr's debt restructuring plan sets aside more than $1 billion for improving city services, including blight eradication.
Most creditors, including about 30,000 retirees and city employees, have endorsed Detroit's plan to cut $12 billion in unsecured debt to about $5 billion.
The threat to artwork at the Detroit Institute of Arts prompted the creation of the so-called Grand Bargain – commitments from the state, major corporations, foundations and others to donate more than $800 million over 20 years meant to soften cuts to city pensions while placing pieces in the DIA into a trust and out of the reach of debtor demands.
Pensioners this summer voted in favor of Orr's plan, which calls for general retirees to take a 4.5 percent pension cut and lose annual inflation adjustments. Retired police officers and firefighters would lose a portion of their annual cost-of-living raise.
For decades, Detroit paid its bills by borrowing money while struggling to provide the most basic of services for residents. The city, once fueled by the massive auto industry it gave birth to, shrank from 1.8 million people six decades ago to fewer than 700,000 now.
[Continuing Coverage: Detroit Bankruptcy]
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