Michigan Gov. Rick Snyder announced a $350 million aid plan Wednesday to help safeguard Detroit pensioners and protect the city-owned collection at the Detroit Institute of Arts from getting caught further in the bankruptcy fray.
Under the plan, the state would contribute funds over a period of 20 years, courtesy of revenue from tobacco settlements, in an effort to get the Motor City back on its feet much faster and without the prolonged legal fight.
Snyder stressed this is part of a broader settlement --not a bailout—that would ease cuts to retiree’s pensions and prevent a highly feared blow-out sale of the DIA’s prized collection. With legislators at his side, the Republican argued the plan would help the entire state prosper.
"The answer to our long-term situation is a thriving Detroit,” said Snyder at Wednesday’s press conference. “That's going to help every corner of Michigan.”
Snyder drafted the new proposal after consulting with top state lawmakers last week. It would basically match the $330 million recently cobbled together by private foundations across the country in a deal brokered by Chief U.S. District Judge Gerald Rosen.
The Detroit Institute of Arts welcomed the “good news” of the governor’s announcement.
“We are working hard to play an active and thoughtful role in this ongoing process that will allow for a significant contribution to this effort and ensure long-term support for the City's pension funds and sustainability for the DIA,” said DIA spokeswoman Pam Marcil in an emailed statement to msnbc.
“The DIA remains focused on continuing conversations with the mediation team, state, county and city officials, our board members, staff and supporters to determine how we can be as productive and supportive as possible in this process, with the ultimate goal of a balanced, achievable solution that provides for strong DIA involvement in this emerging plan and ensures the museum’s ability to meet its immediate budget commitments and long-term endowment needs,” the statement continued.
In response to Snyder’s announcement, the Detroit Bankruptcy Mediators urged that “all parties approach the issue with an open mind” now that “the question of State participation will now move to the legislative process.”
In another big move, U.S. Judge Steven Rhodes, who is overseeing Detroit's bankruptcy, rejected creditors’ requests Wednesday to allow an independent committee to appraise the DIA’s prized collection, which includes works by Van Gogh, Matisse, Monet, Caravaggio and Warhol.
Rhodes said Michigan Attorney General Bill Schuette made a “serious argument” as to why they can’t put a price-tag on its priceless art. The judge also issued a warning to creditors: "Be careful what you ask for. If you ask for a ruling that the art is part of the case, you might not get that ruling."
Last month, Christie’s Auction House, which was hired by the city, estimated the fair market value on nearly 2,800 works in the museum at $454 million to $867 million.
Detroit’s state-appointed emergency manager Kevyn Orr filed for Chapter 9 municipal bankruptcy in July to confront the city’s staggering $18 billion debt.