September 28, 2013 | Vol. 94, No. 228

Feds offer broke Detroit $100 million to fight blight

DETROIT (AP) — Obama administration officials said Friday that they are sending someone to Detroit to oversee a federal effort that includes millions of dollars in grants to help fix the beleaguered city — a situation one adviser described as “an exceptional circumstance.”

Associated Press
A ROW of abandoned houses is shown in Detroit Thursday.

Don Graves will coordinate the public and private money going to hire more police and firefighters and clear out blighted neighborhoods, among other things, officials said. Graves, a Treasury Department official, serves as executive director of the President’s Council on Jobs and Competitiveness.

But critics said the combined $300 million in federal and private funds falls well short of a wider bailout sought by some in the city facing $18 billion in long-term debt.

Several high-ranking White House officials discussed federal efforts and other opportunities Friday during a closed-door meeting at Wayne State University with Gov. Rick Snyder, state-appointed emergency manager Kevyn Orr, Mayor Dave Bing and community and business leaders.

The $100 million of existing federal funds will be augmented with $200 million more in resources from foundations and businesses.

The funding includes $65 million in Community Development Block Grants for blight eradication, $25 million in a public-private collaboration for commercial building demolition and nearly $11 million in funds to ensure working families can live in safe neighborhoods. Attorney General Eric Holder announced $3 million that, in part, will be used to hire new police officers. About $25 million also will be expedited to Detroit to hire about 140 firefighters and buy new gear.

Officials did not specify when the various grants would be released.

Detroit this summer became the largest U.S. city to file for bankruptcy protection. Federal officials recognized that the prospect of legislation to bail out the city was extremely low, so the Obama administration pored through the federal budget and found untapped money.

“We knew this was an exceptional circumstance and it deserved an exceptional response,” Gene Sperling, Obama’s chief economic adviser to President and a Michigan native, told reporters after the meeting.

“What you see here is just a more expedited and aggressive effort because we want to help the people of Detroit to prosper,” he said. “But we also want the rest of the people in the country to understand ... that Detroit, with the right resources and right partnership, has a great future.”

Sperling said Snyder, a Republican, was the nation’s first governor to seek funds newly earmarked for blight eradication. Snyder also pledged $5 million in new state money toward those efforts.

Snyder said he was grateful to the federal government for its help and “tremendous progress” has been made in certain areas of the city, but “there’s much more work to be done.”

The gathering Friday follows a series of meetings with the White House to plot ways to pull Detroit from a fiscal pit. Detroit has had a poor record in making sure grant money is used properly and even spent at all, but Sperling and others say city and federal officials were taking steps to ensure that the funds are effectively used.