The City Council has given its final approval of a bankruptcy plan to transfer the assets of the Detroit Institute of Arts to an irrevocable trust in exchange for state and foundation funding to aid city pensioners. (Daniel Mears / The Detroit News)
Detroit— The City Council on Monday gave its final approval of a bankruptcy plan to transfer the assets of the Detroit Institute of Arts to an irrevocable trust in exchange for state and foundation funding to aid city pensioners.
The council’s unanimous 8-0 vote for terms outlined in a so-called “grand bargain” to shore up pensions and shield the museum collection in bankruptcy came after the panel previously supported terms of the concept, but held off on giving its full blessing pending the resolution of “ancillary terms” between lawyers, the art museum and foundations involved, said Detroit’s Corporation Counsel Melvin Hollowell.
The council ultimately took its vote Monday with little discussion, following a closed session that spanned more than an hour.
“That’s a big approval from the legislative branch that it’s important to protect both the pensioners and the art,” said Hollowell, who added he could not disclose the unresolved issues that were discussed in the closed session.
“This mechanism for doing so, this grand bargain, is a very good deal for the people,” he said. “The art and all of its contents are going to be here for the benefit of the people of Detroit in perpetuity.”
For its part, the Michigan Legislature approved millions of dollars in state aid for Detroit’s bankruptcy.
The nine-bill package calls for an upfront payment of $195 million from the state as well as $366 million from 12 foundations and $100 million from the DIA over 20 years. The museum has said it has already identified at least $70 million toward its goal.
Council President Pro Tem George Cushingberry agreed Monday that approving the transfer was a “tough sell,” but said he’s now satisfied that remaining questions and concerns have been resolved.
“A lot of my colleagues are hearing in the community that people are concerned that the city is being systematically devalued,” Cushingberry said. “To me, the objective is to get us out of bankruptcy as soon as we possibly can. I think (the vote) furthers that along the way.”
Council President Brenda Jones declined to comment.
Hollowell said the now-approved term sheet confirms what’s laid out in Emergency Manager Kevyn Orr’s bankruptcy Plan of Adjustment.
After the council’s prior vote of support, Orr submitted a letter to U.S. Bankruptcy Court. Parties involved will attend a closing no later than Dec. 31 to effectuate the protection of the art in a public trust, he said.