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'Grand Bargain' Will Help Save Detroit — And Its Art


A nearly miraculous outcome. That's what U.S. Bankruptcy Judge Stephen Rhodes said today as he approved Detroit's plan to wipe out about three-quarters of its unsecured debt. That's more than 7 billion dollars. Rhodes said it gives the city a fresh start, and he praised Kevyn Orr, the state-appointed emergency manager, who led Detroit through the contentious bankruptcy process. Mr. Orr, in turn, praised all the players involved.


KEVYN ORR: Coming together, through a difficult, but managed, judicial process, to get a result that's for the benefit of the citizens of Detroit, the region and the state.

BLOCK: Much of that managed process occurred in closed-door mediation sessions where Detroit reached key settlements with major creditors. It was dubbed the grand bargain - a most unusual arrangement where private foundations and corporations are preserving Detroit's art collection by helping pay retirees' pensions, on the condition the art would not be sold. NPR's Elizabeth Blair reports on that key component of the grand bargain.

ELIZABETH BLAIR, BYLINE: Motor city, the cradle of the once-thriving American automobile industry, has one of the country's greatest art collections. In part because of the vast wealth that industry created. When Detroit declared bankruptcy last year, art was its marquee asset, and some creditors insisted it was fair game. Detroit's creditors include financial institutions, as well as retirees living on pensions. The outcry over a possible fire sale of the art was loud and immediate from the art world and Detroiters who take pride in the city's historic museum. The Detroit Institute of Arts, or DIA, a federal mediator in the bankruptcy proceedings, had an idea. Maybe the foundations and wealthy donors wanting to shield the art, would be willing to rescue the pensions in the process. Several foundations came forward. Kresge contributed a hundred million dollars. Ford contributed a hundred and twenty-five million.

DARREN WALKER: We were interested in solving the problem. And the problem needed a big response.

BLAIR: Darren Walker, the Ford Foundation president, says the grand bargain does just what a plan is supposed to do - look to the future.

WALKER: Every great city has a great cultural institution. So it's impossible to imagine a future great Detroit without a future great DIA.

BLAIR: Here's how it's supposed to work. A newly created entity, called the Foundation for Detroit's Future, will take the money from the foundations and funnel it through to the city, which will use it to pay the pension funds. Twelve foundations committed a total of 366 million dollars over 20 years. In addition, the DIA has contributed to a hundred million. Mariam Noland, president of the Community Foundation for Southeast Michigan, will lead the Foundation for Detroit Future. She says it's the result of work by many different players - federal mediators, lawyers, pensioners and the city.

MARIAM NOLAND: Everybody came together and compromised in an unheard-of way. Was everybody satisfied? No. But did they all, finally, step up and say, for the good of all, this is what has to happen. This is what has to happen for the art, for people and for the city.

BLAIR: But it is just one piece of a very large, complicated problem facing Detroit moving forward. June Thomas, a Professor of urban planning at the University of Michigan, says Detroiters have been very anxious as the city began to cut basic services.

JUNE THOMAS: The street lights were off. The police and the fire were overstretched. The schools were being closed or consolidated. It seemed as if the city was dying.

BLAIR: Today's approval will keep prized artworks on the walls. Pensioners will take smaller cuts. But, June Thomas says, profound imbalances between Detroit's needs and its revenue, remain. Solving those will likely take an even grander bargain. Elizabeth Blair, NPR News. Transcript provided by NPR, Copyright NPR.

Elizabeth Blair is a Peabody Award-winning senior producer/reporter on the Arts Desk of NPR News.

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