DETROIT (AP) — Detroit presented its first full road map for climbing out of bankruptcy Friday, outlining an elaborate plan to restructure $18 billion in debt, demolish thousands of blighted homes and invest in the broken-down infrastructure that has made the city a symbol of urban decay.
If approved by a judge, the sweeping proposal would mean sharply reduced payments to some retirees and creditors. Pension holders could expect to get 70 percent to 90 percent of what they are owned, while many banks would receive as little as 20 percent.
The plan, which is sure to be the subject of court challenges, envisions a leaner, cleaner and safer Motor City after financial burdens are lifted.
“There is still much work in front of all of us to continue the recovery from a decades-long downward spiral,” state-appointed manager Kevyn Orr said in a statement.
Orr’s so-called plan of adjustment “provides the best path forward for all parties to resolve their respective issues and for Detroit to become once again a city in which people want to invest, live and work.”
The state is focused “on protecting and minimizing the impact on retirees, especially those on fixed, limited incomes,” Gov. Rick Snyder said, as well as “restoring and improving essential services ... and building a foundation for the city’s long-term financial stability and economic growth.”
The governor called the plan “a critical step forward.” But it leaves unanswered many questions, including whether creditors and labor unions will accept the deal or fight it, and how long that process might take.
The package calls for awarding police and fire retirees at least 90 percent of their pension after eliminating cost-of-living allowances. Other retirees would receive at least 70 percent.
It still doesn’t seem fair to Janice Pegg, 67, who receives the pension left by her husband, Victor, a Detroit police officer who died two years ago.