Corporations and Banks Abandoned Flint Driving the City Toward Bankruptcy
Michael Martinez
The Detroit News
Flint— Vehicle City has faced its share of setbacks over the years — shuttered factories, dwindling population and urban decay, to name a few — but none has cast as dark a shadow as the prospect of filing for municipal bankruptcy protection.
The struggling Genesee County community may soon be pushed over the financial cliff by a lawsuit. A group of city retirees is suing the city to stop proposed cuts to their health care benefits — a $5 million annual burden that could force Flint to become Michigan’s second-largest municipality to file for Chapter 9 bankruptcy protection, following on the heels of Detroit.
“The city won’t be able to stay solvent at this rate,” said Emergency Manager Darnell Earley. “I don’t want to see a bankruptcy in the city of Flint, and I’m going to do everything I can to make sure that doesn’t happen. If we get no relief from that retiree health care, then we have to start talking about that.”
It’s the latest dilemma for a once-thriving automotive hub that is experiencing many of the same problems as Detroit.
When the sprawling General Motors plants closed around the turn of the century, Flint’s downward spiral hastened.
Today, nearly one-third of its population lives in poverty. Tens of thousands of jobs have been lost and about 15 percent of the workforce is unemployed. And the population — once nearly 200,000, ranking it as Michigan’s second largest city — struggles to stay above the 100,000 mark.
The loss of tax revenue has rocked the city’s budget. Police and fire departments stand to lose dozens of workers to cuts. The school system has laid off teachers and closed buildings. And residents increasingly complain about a lack of basic public services such as trash pickup and police response.
“They’re in a very tough bind,” said Eric Scorsone, a Michigan State University economist who has closely tracked Flint’s financial troubles. “There have been improvements, but bankruptcy is still definitely a scenario.”
So grim was Flint’s financial situation in late 2011 that the state placed the city under emergency management.
At that time, the city had about $150 million in long-term debt, not to mention $900 million in unfunded liability for retiree health care. The city has cycled through multiple managers, including Earley, who was appointed in October.
“Since (2011) there’s been a lot of progress made in terms of identifying some of the remedial steps that are necessary to address the financial emergency,” Earley said.
Since its earliest days, Flint has been defined by manufacturing.
The city was known for its lumber industry in the 1800s, said Thomas Henthorn, a history professor at the University of Michigan-Flint.
The cigar, wool and carriage industries played big roles, too. But no business had a bigger footprint or impact than the automobile industry.
“The car itself as an icon kind of dominates Flint’s image for most of the middle of the 20th century,” Henthorn said. “The car industry really dominated our local economy.”
Flint was the birthplace of General Motors.
Sprawling auto plants like the 235-acre Buick City and 130-acre Chevy in the Hole once employed more than 80,000 workers, making everything from Buick LeSabres to Chevy Corvettes.
Other industries, including supplier factories and tool and die plants, flourished as well, and neighborhoods sprouted up around the plants as workers sought housing near their jobs.
But after the 1970s, Flint suffered the same fate as many Midwestern cities whose economies were tied to durable goods.
The auto industry began to leave the city, building plants in suburbs and, later, other countries. Workers left in search of jobs elsewhere.
Today, Chevy in the Hole and Buick City are abandoned lots, with weeds poking through cracks in miles of gray pavement.
Police, firefighter cuts
The latest chapter in Flint’s financial woes came in 2012 after former Emergency Manager Michael Brown decided that retired city employees should pay more for their health coverage. The retirees filed a lawsuit in 6th Circuit Court; a court date has not been set.
Fully aware that the city may have to absorb the costs, Earley proposed cuts in a two-year budget unveiled in April that calls for the elimination of 19 firefighter and 36 police officer positions as well as seeking higher fees for city services such as street lighting and garbage pickup.
“To balance the budget, that’s where we have to go to make the cuts,” Earley said.
“We’re at a point now where we believe the city can still deliver a satisfactory service level, nothing more, nothing less, no bells and whistles.”
The number of reported arsons in the city has decreased over the past few years, but FBI statistics show the city still had the highest per capita rate of arsons with its 226 in 2012, compared to 287 in 2011. In 2012, Flint led the nation with its homicide rate. Flint and Detroit were the most violent cities in America, according to 2012 FBI crime statistics.
The Michigan State Police has stepped up patrols in Flint since 2012 when Gov. Rick Snyder added officers there and in other high-crime cities.
Still, Crystal Hampton, a 26-year-old Flint resident, is concerned about the proposed cuts in emergency services.
“We already don’t have any (police officers),” she said. “Flint is not safe. There’s no schools here for our kids, there’s nowhere safe for them to play. It’s scary here.”
Hampton complained about high water bills, high bus fares, slow police response times and high crime rates. She said she doesn’t want the weather to warm up, because that means more crime.
“We’re just barely making it,” she said.
Downtown hope
Despite talk swirling about bankruptcy, Flint’s businesses are investing in downtown.
Uptown Developments, a nonprofit partnership between four wealthy families and the Mott Foundation, has contributed greatly to downtown’s revival. Since 2000, the group has purchased about a dozen properties and redeveloped them into loft apartments, offices and retail space.
“When we started, all of the buildings were boarded up; you rarely saw anyone walking on the sidewalks,” said Scott Whipple, Uptown’s development manager. “Today, downtown is truly vibrant. There are a ton of pedestrians. Bars and restaurants have opened up. People’s attitudes have changed.”
Within the past few years, a crepe-maker went from a mobile cart to a brick-and-mortar store along Saginaw Street. And other retailers, including a high-end shoemaker, have started to fill in empty storefronts.
A new 32,000-square-foot farmers’ market is under construction near the old Flint Journal building; MSU will add about 100 jobs when a new $19 million medical school is complete; Genesys Medical Center just opened a new health center downtown; and GM is again investing, breaking ground in March on a $600 million paint shop that will employ about 600 workers.
“Those are all good, positive, encouraging signs the city of Flint is very much alive and well,” Earley said.
Even Flint’s biggest symbols of decline — its abandoned auto plants — are poised for redevelopment, including a pipe-maker who’s planning a manufacturing plant at the Buick City site.
“It will never be what it was in the heyday of Chevrolet and Buick and AC Delco,” Earley said. “But it’s worth noting a lot of people are working hard and investing trying to help define what these new communities will look like.”
mmartinez@detroitnews.com
(313) 222-2401
Twitter.com/MikeMartinez_DN
From The Detroit News: http://www.detroitnews.com/article/20140519/METRO06/305190012#ixzz32AJddV9k
 |
| Flint is being driven into bankruptcy like Detroit due to the excesses of the corporations and banks. |
The Detroit News
Flint— Vehicle City has faced its share of setbacks over the years — shuttered factories, dwindling population and urban decay, to name a few — but none has cast as dark a shadow as the prospect of filing for municipal bankruptcy protection.
The struggling Genesee County community may soon be pushed over the financial cliff by a lawsuit. A group of city retirees is suing the city to stop proposed cuts to their health care benefits — a $5 million annual burden that could force Flint to become Michigan’s second-largest municipality to file for Chapter 9 bankruptcy protection, following on the heels of Detroit.
“The city won’t be able to stay solvent at this rate,” said Emergency Manager Darnell Earley. “I don’t want to see a bankruptcy in the city of Flint, and I’m going to do everything I can to make sure that doesn’t happen. If we get no relief from that retiree health care, then we have to start talking about that.”
It’s the latest dilemma for a once-thriving automotive hub that is experiencing many of the same problems as Detroit.
When the sprawling General Motors plants closed around the turn of the century, Flint’s downward spiral hastened.
Today, nearly one-third of its population lives in poverty. Tens of thousands of jobs have been lost and about 15 percent of the workforce is unemployed. And the population — once nearly 200,000, ranking it as Michigan’s second largest city — struggles to stay above the 100,000 mark.
The loss of tax revenue has rocked the city’s budget. Police and fire departments stand to lose dozens of workers to cuts. The school system has laid off teachers and closed buildings. And residents increasingly complain about a lack of basic public services such as trash pickup and police response.
“They’re in a very tough bind,” said Eric Scorsone, a Michigan State University economist who has closely tracked Flint’s financial troubles. “There have been improvements, but bankruptcy is still definitely a scenario.”
So grim was Flint’s financial situation in late 2011 that the state placed the city under emergency management.
At that time, the city had about $150 million in long-term debt, not to mention $900 million in unfunded liability for retiree health care. The city has cycled through multiple managers, including Earley, who was appointed in October.
“Since (2011) there’s been a lot of progress made in terms of identifying some of the remedial steps that are necessary to address the financial emergency,” Earley said.
Since its earliest days, Flint has been defined by manufacturing.
The city was known for its lumber industry in the 1800s, said Thomas Henthorn, a history professor at the University of Michigan-Flint.
The cigar, wool and carriage industries played big roles, too. But no business had a bigger footprint or impact than the automobile industry.
“The car itself as an icon kind of dominates Flint’s image for most of the middle of the 20th century,” Henthorn said. “The car industry really dominated our local economy.”
Flint was the birthplace of General Motors.
Sprawling auto plants like the 235-acre Buick City and 130-acre Chevy in the Hole once employed more than 80,000 workers, making everything from Buick LeSabres to Chevy Corvettes.
Other industries, including supplier factories and tool and die plants, flourished as well, and neighborhoods sprouted up around the plants as workers sought housing near their jobs.
But after the 1970s, Flint suffered the same fate as many Midwestern cities whose economies were tied to durable goods.
The auto industry began to leave the city, building plants in suburbs and, later, other countries. Workers left in search of jobs elsewhere.
Today, Chevy in the Hole and Buick City are abandoned lots, with weeds poking through cracks in miles of gray pavement.
Police, firefighter cuts
The latest chapter in Flint’s financial woes came in 2012 after former Emergency Manager Michael Brown decided that retired city employees should pay more for their health coverage. The retirees filed a lawsuit in 6th Circuit Court; a court date has not been set.
Fully aware that the city may have to absorb the costs, Earley proposed cuts in a two-year budget unveiled in April that calls for the elimination of 19 firefighter and 36 police officer positions as well as seeking higher fees for city services such as street lighting and garbage pickup.
“To balance the budget, that’s where we have to go to make the cuts,” Earley said.
“We’re at a point now where we believe the city can still deliver a satisfactory service level, nothing more, nothing less, no bells and whistles.”
The number of reported arsons in the city has decreased over the past few years, but FBI statistics show the city still had the highest per capita rate of arsons with its 226 in 2012, compared to 287 in 2011. In 2012, Flint led the nation with its homicide rate. Flint and Detroit were the most violent cities in America, according to 2012 FBI crime statistics.
The Michigan State Police has stepped up patrols in Flint since 2012 when Gov. Rick Snyder added officers there and in other high-crime cities.
Still, Crystal Hampton, a 26-year-old Flint resident, is concerned about the proposed cuts in emergency services.
“We already don’t have any (police officers),” she said. “Flint is not safe. There’s no schools here for our kids, there’s nowhere safe for them to play. It’s scary here.”
Hampton complained about high water bills, high bus fares, slow police response times and high crime rates. She said she doesn’t want the weather to warm up, because that means more crime.
“We’re just barely making it,” she said.
Downtown hope
Despite talk swirling about bankruptcy, Flint’s businesses are investing in downtown.
Uptown Developments, a nonprofit partnership between four wealthy families and the Mott Foundation, has contributed greatly to downtown’s revival. Since 2000, the group has purchased about a dozen properties and redeveloped them into loft apartments, offices and retail space.
“When we started, all of the buildings were boarded up; you rarely saw anyone walking on the sidewalks,” said Scott Whipple, Uptown’s development manager. “Today, downtown is truly vibrant. There are a ton of pedestrians. Bars and restaurants have opened up. People’s attitudes have changed.”
Within the past few years, a crepe-maker went from a mobile cart to a brick-and-mortar store along Saginaw Street. And other retailers, including a high-end shoemaker, have started to fill in empty storefronts.
A new 32,000-square-foot farmers’ market is under construction near the old Flint Journal building; MSU will add about 100 jobs when a new $19 million medical school is complete; Genesys Medical Center just opened a new health center downtown; and GM is again investing, breaking ground in March on a $600 million paint shop that will employ about 600 workers.
“Those are all good, positive, encouraging signs the city of Flint is very much alive and well,” Earley said.
Even Flint’s biggest symbols of decline — its abandoned auto plants — are poised for redevelopment, including a pipe-maker who’s planning a manufacturing plant at the Buick City site.
“It will never be what it was in the heyday of Chevrolet and Buick and AC Delco,” Earley said. “But it’s worth noting a lot of people are working hard and investing trying to help define what these new communities will look like.”
mmartinez@detroitnews.com
(313) 222-2401
Twitter.com/MikeMartinez_DN
From The Detroit News: http://www.detroitnews.com/article/20140519/METRO06/305190012#ixzz32AJddV9k
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