June 12, 2014 at 1:00 am

Laura Berman

A bold step of faith spurs idea that became 'grand bargain'

Noland )

“Tell me again how this is going to work?”

Allan Gilmour is a sophisticated veteran of financial maneuvers and civic decision-making. Once Ford’s vice chairman, he is Wayne State University’s immediate past president.

But as chairman of the Community Foundation of Southeastern Michigan, he couldn’t quite believe what Mariam Noland, the foundation’s president, was telling him about the federal mediators’ idea to save employee pensions and the Detroit Institute of Arts.

“Explain that again,” he said.

Noland had run into chief federal Judge Gerald Rosen — a chance meeting at a downtown deli — on Oct. 5. “Let me know if I can help in any way,” she said cheerfully.

Within hours, she was meeting with Rosen and lawyer Eugene Driker, as the mediators laid out a way to potentially save the pensions of Detroit retirees and the city’s art museum.

The number mentioned that day — $500 million — was stunning in its sheer size. Philanthropies were being asked to lead the way. If not, years of litigation and uncertainty would be the likely result.

The Community Foundation gives away $40 million a year, from $750 million in assets. And Noland, who began with $2 million in 1985, was experiencing the most dramatic moment in her 29-year-tenure.

“I had a long conversation with (Rosen and Driker) and they said, ‘We don’t know how to raise money from foundations,’” Noland recalls.

Asked to reach out to her foundation brethren, she got on the phone. “We all know each other. It was as much as I had, a Rolodex and some friends,” she says.

Ford Foundation president Darren Walker, who ultimately made a $125 million commitment to the deal, remembers following up her email.

“We had a phone conversation and I said, “Mariam, this is a pretty wild idea ... but I like wild ideas. Generally speaking, this is not something we would consider. But because it’s Detroit, I will come.”

On Nov. 5, in a federal courthouse conference room, the foundation chiefs met for the first time to discuss what would eventually become “the grand bargain” — a deal that now hinges on acceptance from city employees and retirees, and approval by bankruptcy Judge Steven Rhodes.

But it would take weeks of meetings and conversations to move the discussions forward. Behind the scenes, Walker, Noland and Kresge’s Rip Rapson, among others, conferred. “We knew we needed a big first step,” Noland remembers.

Ultimately, Ford’s $125 million and Kresge’s $100 million set the stage for $366 million in philanthropic pledges. (“We knew we needed $200 million to create momentum,” says Walker.)

Local foundations kicked in proportionately, including $10 million from the Community Foundation.

On Monday, Judge Rosen credited Mariam Noland as “one of the heroes” of the deal — one of a group of leaders who recognized a moment of opportunity and acted with urgency and passion.

lberman@detroitnews.com
(313) 222-2032