Detroit’s Diamond in the Rough

By Thomas Cribbins

Thomas Cribbins is a junior at the University of Michigan studying political science.    
   
A good analogy for the bankruptcy of Detroit might be sailing into uncharted waters. Chapter 9 bankruptcy had never been tried on such a large scale, with the next largest municipal bankruptcy only about ⅕ of the size of Detroit’s bankruptcy. [1] Needless to say, the outcome of the bankruptcy involved many complex deals. One such deal was the leasing of Belle Isle Park to the State of Michigan. This lease gave the management and operational responsibilities of Belle Isle to the Michigan Department of Natural Resources to manage the island as a state park. For a minimum of 27 years, Belle Isle will be under state control while still technically owned by the City of Detroit. After the intervening 3 years, how beneficial was the Belle Isle deal for Detroit?

The Belle Isle lease certainly helped Detroit get back on its feet. The deal intended to relieve Detroit of the burden of maintaining the aging Belle Isle that had fallen into substantial disrepair largely because of Detroit’s mismanagement leading up to the bankruptcy. This transfer would relieve Detroit of the approximated four million dollars that Belle Isle cost the city each year. [2,3] In return, the city would hand Michigan any money preserved for Belle Isle.
The state planned ambitious improvements after the extensive cleanup of the island. These most likely long overdue renovations were only dreams when Detroit could not even afford police officers or firefighters, let alone new buildings for a city park. However, in the grand scheme of things, Detroit probably got a much better end of the deal than the state. Not entirely by accident, Michigan intended this transfer to serve as a helping hand. However, when you confront the numbers of the management of Belle Isle as a state park, it becomes quickly apparent that the city could never have managed the island even remotely as well as the state. In short, Michigan intended to do Detroit a favor, in the name of bettering the entire state by fostering a strong Detroit, but probably never realized the enormity of the favor they took on.
        Michigan believed that it was saving the city around four million dollars - quite the donation to the bankruptcy effort. [2] As it turned out, the cost of operating Belle Isle is substantially more: over 8 million. [4] In fact, the State’s General Fund doles out 5.5 million dollars each year alone to support Belle Isle operations and law enforcement. However, the most startling fact is not the budgetary requirements of the park, but the fact that that the revenue the park generates seems rather low. In 2016, it generated $934,737, less than a million dollars. [4] From these numbers, it seems obvious that the city certainly could not have sustained Belle Isle in the wake of the largest municipal bankruptcy in American history.
        Understandably, Belle Isle is probably not intended to be a profit making machine for Detroit or Michigan. It is a city park, a common pool resource for the enjoyment of the people of Detroit. However, the point is not that Detroit railroaded the state, the point is that Belle Isle is lucky that Michigan swooped in when it did. If you look at pictures of Belle Isle at the time of the State takeover, you will not be pleasantly surprised. Certainly, the Department of Natural Resources (DNR) knew what they were getting into in a broad sense. Perhaps not the full financial investment, but certainly the scope of the rehabilitation necessary to bring Belle Isle back to a respectable nature. Since the transition, the DNR has restored 13 of the 17 bathrooms to safe, clean, fully functioning order. Also, water mains in 8 different areas have been replaced. [4] While the document does not say how many bathrooms or water mains were previously out of proper order, we can assume that many of them were desperately in need of restoration. This level of investment could only be delivered from outside the city and the DNR was the best candidate for the job. With 103 state parks, the DNR are preeminent experts in how to manage and restore recreational areas: no small task in the case of Belle Isle.
        Moreover, the transfer of Belle Isle to the state allowed Belle Isle to receive a second chance and a new revitalization. The leasing of the island to the state came out of necessity;Detroit needed outside help to resolve its bankruptcy. Belle Isle’s basic operations would have hindered Detroit’s recovery and the necessary restorations would have been impossible under the constraints of the financial crisis.. While the state’s surprise over the cost requisite to manage and revitalize the park could have been avoided with a more proper study , handing the island over to Michigan was still the best course of action with the state’s expertise and substantial capacity to do the project justice. While not one of the headlining portions of Detroit’s bankruptcy, the Belle Isle lease very well may have been one of the city’s shrewder moves.

1. Davey, Monica, and Mary Williams Walsh. "Billions in Debt, Detroit Tumbles Into Insolvency." New York Times, July 18, 2013. http://www.nytimes.com/2013/07/19/us/detroit-files-for-bankruptcy.html?pagewanted=all&_r=0.
   
2. Michigan Senate. Summary of the Belle Isle Lease and Associated Fiscal Issues. By Josh Sefton. Lansing, MI, 2014.
   
3. City of Detroit. Office of the Emergency Manager. Belle Isle Park Lease. Detroit, MI, 2013.
   
4. Michigan Department of Natural Resources. Belle Isle Park Advisory Committee. Belle Isle Park Project Management Presentation. Detroit, MI, 2016. https://www.michigan.gov/documents/dnr/BIPACAssetManagementPresentation091516_534835_7.pdf
   

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