The Detroit Free Press has an epic behind-the-scenes story of Detroit’s Grand Bargain. Starting from Gerald Rosen’s doodle, the reporters follow every major player in the story. They show how Kevyn Orr and his colleagues put the art in play. Then they give us details on how Judge Gerald Rosen corralled a group of foundations to cement the deal.
Here’s how Alberto Ibargüen, president and CEO of the John S. Knight Foundation, and Darren Walker, president of the Ford Foundation, reacted to Rosen’s overture in a car ride back to their hotels:
“Alberto,” Walker said, “this is going to be a hundred-million-dollar taxi ride.”
“Well, if you’re putting in a hundred million, then I have to put in twenty,” Ibargüen said. “And by the way, on an asset basis, you’re getting away with murder because you should be putting in more.”
Walker smiled. “I think my board will be excited by this.”
It turns out the Knight Foundation board was even more excited:
the Knight Foundation board of trustees met at its headquarters in Miami. The Knight trustees, including Noland, wanted to help Detroit, where the Knight family had once owned the Free Press. CEO Ibargüen suggested a contribution of $20 million but was astonished that trustees thought he was too conservative.
Beverly Knight Olson, the late James Knight’s daughter and the late Jack Knight’s niece, had tears in her eyes as she addressed the board.
“Jack Knight loved Detroit, and the Detroit Free Press was his newspaper,” she said. “I don’t think 20 is enough.” The trustees voted unanimously to give $30 million.
Ibargüen left the room and quickly called Walker. “Listen, you piker! I’ve upped the ante. I’m in for 30, so you guys had better cough up some more money.”
“You are an inspiration to me, my friend,” Walker said.
In short order, the Ford Foundation board, briefed and prodded by Walker, upped its ante to $125 million.
All told, more than $250 million in foundation money materialized in a matter of days. Other foundation money followed. Many were giving unprecedented amounts, even dipping into their core endowments, something rare because foundations usually donate only the interest earned.
How Detroit was reborn: The inside story of the city’s historic bankruptcy case (Detroit Free Press)
