Orr: Detroit's Comeback Already Underway

orr-kevyn-bl120313-357.jpg
Kevyn Orr, emergency manager for Detroit, speaks at a news conference in Detroit, Michigan, U.S., on Tuesday, Dec. 3, 2013. Detroit can remain under bankruptcy court protection, where it's shielded from lawsuits or other actions that might interfere with its attempts to reduce debt and cut employee benefits. Photographer: Jeff Kowalsky/Bloomberg *** Local Caption *** Kevyn Orr

CHICAGO — Detroit's recovery will mirror the comeback of other major American cities like Miami, Washington D.C., and Cleveland, the city's emergency manager Kevyn Orr said Friday.

Signs of Motown's revitalization are already apparent, especially in the downtown area, where the occupancy rate is 97% and "you can't find an apartment," according to Orr. The city continues to lose population, but at a slower rate than in recent years, he said.

"The reality is we're probably at 685,000," Orr said of the city's population, down from 700,000 in 2010. "There's been some shallowing of the population loss and there's been some growth in some areas."

Orr, a corporate bankruptcy attorney, made the comments Friday during a keynote talk at the American Bankruptcy Institute's annual spring meeting in Washington.

The emergency manager also said that the city-owned art collection is "off the table" under the current bankruptcy exit plan, and that the city will unveil a new blight removal plan on Tuesday.

The city's recovery will be boosted by the launch of five infrastructure projects over the next few years, including a new bridge to Canada, a new hockey arena in midtown, and light rail, said Orr. That means more jobs, he said.

"I don't want to be Pollyannaish, but the opportunities that are coming the way for the city to turn around are at least a lot better than if they weren't there," he said.

Orr compared Detroit to other distressed cities like Miami that are now flourishing. Miami "in a snapshot, within five years it began to turn," he said, and DC's "gentrification, yuppification, trendification" happened "with dispatch," he said.

"It doesn't matter, every city, Baltimore, Pittsburgh, every city has an opportunity for rebirth, and that's what struck me about Detroit," said Orr.

Orr's praised his "core team" of professionals, which includes his former law firm Jones Day, investment bankers Miller Buckfire, and consultants Ernst and Young and Conway Mackenzie. He noted the firms have been working together with few problems since mid-2012.

"This is almost not quite easy, but long overdue and expected," the manager said. "It's what we do as restructuring professionals."

Taking the city into bankruptcy has helped it achieve settlements with major creditors and brought in an additional $800 million in state and private money for the city's pensions, according to Orr.

A recent settlement that calls for 100% repayment of police and fire pensions and 95.5% repayment of general employee pensions is do-able because of higher recent market returns due to improved oversight of the pension funds, he said.

Negotiations with creditors have often been difficult, he added, with lots of late nights, people sometimes walking out of meetings, "sucking their thumbs, crying ... but we're getting it done," he said.

"We have to leave this city in a way that's able to move forward together so they can seize this moment to rebuild a great American city," said Orr. "Detroit is already on its way to its renaissance."

For reprint and licensing requests for this article, click here.
Bankruptcy Detroit bankruptcy Michigan
MORE FROM BOND BUYER