CHICAGO -- A plan to fund Detroit's pensions while protecting its art collection received a boost Tuesday when a major foundation pledged $40 million to the effort.
The W.K. Kellogg Foundation said it would invest $40 million to a fund created by a group of local and national foundations that is raising money for the city's unfunded pension debt in order to safeguard the city-owned art collection at the Detroit Institute of Arts museum.
The contribution boosts the plan's fund to $370 million and offers a significant boost for the one-of-a-kind plan.
"The Kellogg Foundation's commitment strengthens this effort, and we are hopeful the fund will continue to attract commitments from individual donors and institutions," a working group representing the foundation coalition said in a statement. "It is our urgent hope and belief that our combined investments in the future of Detroit will help stabilize and renew the city at this critical time."
The coalition has said it hopes to raise at least $500 million.
Gov. Rick Snyder wants to pledge $350 million in state funds to the plan, and will propose the appropriation as part of his Feb. 5 executive budget.
The state funds are subject to legislative approval.
The entire plan is being hashed out in private under the oversight of Detroit bankruptcy court mediators. The coalition and the state have made clear that they will pledge the money only if it goes solely to pensioners -- and no other creditors -- and if it safeguards the art collection from a sale.
"[T]he Kellogg Foundation's commitment today inspires the mediation team to continue its work toward facilitating agreements among as many of the parties to the Detroit bankruptcy as possible, agreements which can become part of a larger, balanced, agreed-upon plan of adjustment designed to provide Detroit with a prompt and successful exit from bankruptcy and to move us toward a revitalized and renewed city and region," the mediators, who are led by U.S. Chief District Judge Gerald Rosen, said in a statement released after the Kellogg Foundation's announcement.
The plan expected to be a key part of the city's plan of adjustment, to be filed in the next several weeks with the bankruptcy court.
