Politicians can posture all they like but the Wall Street Journal settles once and for all that the Detroit Institute of Arts was the key to resolving the city’s bankruptcy. Today, Judge Rhodes approved the bankruptcy plan.
Essentially, Kevyn Orr, the Emergency Manager, put the museum collection in play to motivate the state, unions and surrounding counties to collaborate and resolve the fiscal crisis:
“I made it clear that the state bailing out Detroit would not be appropriate and I still live by that. I don’t view the grand bargain as a bailout,” said Michigan Republican Gov. Rick Snyder, who authorized the city’s bankruptcy filing and endorsed its settlement. […]
The idea to rescue a bankrupt American city started with a doodle on a legal pad.
U.S. District Judge Gerald Rosen, who had been appointed as the chief federal mediator in the nation’s largest municipal-bankruptcy case, wrote the word “art” on the pad and drew a box around it. Then he drew an arrow from the box to where he had written the word “pensions.”
That concept forged in the summer and fall of 2013—to monetize Detroit’s world-class art collection to help shore up the city’s underfunded pensions with help from some of the nation’s largest foundations—turned out to be the linchpin deal in Detroit’s Chapter 9 case that effectively ended Friday.
In Detroit Bankruptcy, Art Was Key to the Deal (WSJ)