Published On: Tue, Sep 2nd, 2014

Dan Gilbert Supports Private Bailout Plan for Detroit

Chrysler Announces Expansion Of Car Manufacturer's Commitment To Detroit

U.S. Bankruptcy Judge, Steve Rhodes, is presiding over a case to possibly approve a plan that would enable the city of Detroit to leave behind its $18 billion municipal bankruptcy through private philanthropy. The trends for the last decade has been for the city to depend on private donations to revitalize neighborhoods and lure business. Only San Francisco has more private funding for public projects, but unlike San Francisco, Detroit, home of the struggling automakers, doesn’t have Silicon Valley billionaires to give generous handouts.

Detroit does, however, have its share of philanthropists who are eager to improve housing and quality of life in general in the struggling city. State lawmakers approved a plan to allow foundations to shore up public pension funds as long as the Detroit’s art collection won’t be sold to pay off debts.

Dan Gilbert, founder of Quicken Loans and Roger Penske of Penske Corp. are testifying in support of the plan. Private foundations gave $421 million to Detroit between  2003 and 2012, which means $600 per Detroit resident.

The trend towards private funding has its share of critics. Joel Kotkin, director of the center for Demographics and Policy at Chapman University in Orange, California, said, “Governments used to lead and now they can’t … We’re in a very dangerous situation where you have a very small group of people not arguing about policy, but implementing policy.”

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