Residents wary as Detroit faces uncertain future in bankruptcy

DETROIT July 18 Thu Jul 18, 2013 11:10pm EDT

DETROIT July 18 (Reuters) - Some Detroit residents voiced skepticism on Thursday that the former U.S. manufacturing powerhouse would emerge in better shape from its historic bankruptcy filing designed to fix the city's financial crisis.

Hours after learning Detroit filed the largest municipal bankruptcy in U.S. history, residents spoke of the stark realities that come with living in a financially broken city.

"It was like putting a thumb in a dam," said Jodie Holmes, 55, as he leaned against an abandoned restaurant marked with graffiti, waiting for a bus to take him to his temporary job.

"I don't know if bankruptcy will help us or drop us to our knees," he added.

Detroit filed Chapter 9 bankruptcy in federal court on Thursday. The bankruptcy, if approved by a federal judge, would force Detroit's thousands of creditors into negotiations with the city's emergency manager, Kevyn Orr, to resolve an estimated $18.5 billion in debt that has crippled Michigan's largest city.

Detroit was once synonymous with U.S. manufacturing prowess. Its automotive giants switched production to planes, tanks and munitions during World War Two, earning the city the nickname of the "Arsenal of Democracy."

Now a third of Detroit's 700,000 residents live in poverty and about a fifth are unemployed.

"Maybe bankruptcy will help. I don't know," said lifelong Detroiter Damien Collins, 68, outside his east-side house surrounded by abandoned homes.

The retired autoworker said he had given up hope anything would bring back Detroit.

"Nothing else has worked, so why not try it?" he asked.

Detroit's economic struggles have resulted in a deterioration of city life. The murder rate is the highest in nearly 40 years, only a third of its ambulances were in service in the first quarter of 2013 and nearly 78,000 abandoned buildings create "additional public safety problems," Michigan's Republican governor, Rick Snyder, wrote in a letter accompanying the filing.

Residents have also had to cope with a breakdown of services. Forty percent of street lights were non-functional in the first three months of this year, while the police took an average of 58 minutes to respond to emergency calls, more than five times the national average. The city government has also been plagued by mismanagement and political corruption.

"Detroit has a lot to offer, but we need a clean sweep of politicians," said Joanna Maslach, 30, a restaurant manager. "There's still too much corruption here. It's too dysfunctional."

Jim Fields, 37, who recently moved to a downtown loft from the suburbs, is one who believes the city is poised for a comeback. He is among a growing number of professionals moving to historic buildings converted into loft spaces.

"Bankruptcy hits the reset button," the software engineer said. "It's a golden opportunity to make this city right again. I'm very hopeful."

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Comments (1)
AZ1811 wrote:
Detroit can thank years of corrupt politicians and public sector unions uniting to lead the city into bankruptcy. And the non-public unions at the auto makers forced most of their work to states with right to work laws. Getting more than $60 / hour for an unskilled job, as demanded by the unions, has created a mess in poor Detroit. Let’s hope this filing begins to set things straight

Jul 18, 2013 12:28am EDT  --  Report as abuse
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