Street Talk: Motor City: It’s time to pay the piper
Pot of gold.
Like it or not, West Michigan’s business fortunes are tied to Detroit. So, when one part of the body is injured, other parts feel the pain.
Gov. Rick Snyder declared a state of financial emergency for Detroit that in all likelihood will set off a chain of events that include the naming of an emergency financial manager for Motown and a possible lawsuit by the Detroit City Council.
Detroit’s finances are a mess. But there is hope — maybe — for Big D, according to Tim Horner and Stephen Grow, co-chairs of Warner Norcross and Judd’s Emergency Manager Law Group in Grand Rapids.
Just like weight loss, however, a problem that has been building for years won’t be erased in a few months, no matter how much effort is put forth. In just the past year, Detroit’s assets shrunk by more than $340 million. Over the long haul, the Motor City’s population has dwindled from 1.8 million 60 years ago to 713,000 today, including a 25 percent drop in just the past decade — yet its government has remained fat and sassy.
“We have a vastly larger and overly complex and bureaucratic city government than is needed for the size of population it is serving, yet Detroit still can’t deliver basic services,” Horner said. “The city has borrowed and borrowed for decades to fund departments and programs that, in many cases, simply don’t work. Detroit is trying to crack down on the homeowners and businesses who the city claims aren’t paying their taxes, but city records are in such disarray that they can’t be trusted.”
Grow and Horner agree an emergency financial manager will be required and a bankruptcy may be in the offing.
“A Chapter 9 filing for Detroit would be the largest in the history of the country and without precedent,” Grow said. “Given the complexity of the situation and the number of stakeholders involved, it would make sense for an emergency manager to go the route of a pre-packaged bankruptcy, soliciting support for a plan and reaching agreement with as many stakeholders as possible before filing. That approach offers two important advantages: speed and certainty.”
One thing is clear: Detroit officials will not be able to dig themselves out of this hole.
“While Gov. Snyder has several options to consider, it’s becoming increasingly apparent that it’s impossible under the current city charter and structure to fix Detroit’s financial problems without an emergency manager,” Horner said. “This problem has been growing for decades and is now a true financial emergency. While we don’t know exactly what the fix will look like, it’s abundantly clear that the city can’t cut its way to financial solvency by simply docking the pay of city workers and reducing headcount. Detroit must restructure its long-term debt.”
Horner said under Michigan law, only an emergency manager has the legal tools required to solve Detroit’s debt problems.
“An EM has the power to cut through bureaucratic red tape. An EM has the power to reject contracts. An EM has the power to file for bankruptcy,” he said. “As much as the mayor and city council want to solve Detroit’s problems, they simply do not have these tools at their disposal … only an EM does. So I fully expect that an EM will be appointed.”
Now there’s an idea
The Michigan State University College of Law is leading an initiative to help Michigan entrepreneurs and small businesses with their intellectual property questions. The Intellectual Property Start-Up Project will offer assistance with patents, copyrights and trade secrets.
“Often a new company’s or an entrepreneur’s most valuable asset is simply the idea for a new technology,” said Adam Candeub, the professor at MSU Law who is overseeing the program. “There are laws to protect the economic value that those ideas represent, and we want to help Michigan’s emerging high-tech company leaders understand their options.”
The project will start at the MSU Bioeconomy Institute in Holland, with the i6 Green Proof of Concept Center consortium: MSU, Lakeshore Advantage, NewNorth Center and The Prima Civitas Foundation. They will find entrepreneurs and small companies that could benefit from intellectual property consultations. The i6 Green project provides business services for innovative “green” technologies that involve bio-based materials, specialty chemicals and fuels.
However, the new IP assistance won’t be just for “green tech” innovators; it is open to all qualified Michigan entrepreneurs and small companies. In addition to West Michigan, the program is being offered in Greater Lansing and along the I-69 International Trade Corridor, a region that covers Genesee, Lapeer, Shiawassee and St. Clair counties.
Small companies or individuals interested in IP help can call The Prima Civitas Foundation at (517) 999-3382.
As national reading month kicks off, nearly a dozen area executives are trading the boardroom for an hour of reading their favorite children’s story to preschool through fourth grade students at Hope Academy of West Michigan, a charter school in Grand Rapids authorized by Ferris State University.
According to the organization Reach Out and Read, reading aloud is widely recognized as the single most important activity leading to literacy acquisition. Among other things, reading aloud builds word-sound awareness in children, a potent predictor of reading success.
One of the best parts of the program is that guest readers select a book that might pertain to their profession.
To wit: Bing Goei, CEO of Eastern Floral, is reading “The Tiny Seed” to preschoolers today. Mark Meijer, president and founder of Life EMS Ambulance, will be entertaining second-graders with “Curious George Goes to the Hospital” tomorrow. On Thursday, Rick Huisman, executive director of Boys and Girls Club Commonwealth and a former pitcher for the Kansas City Royals, will share “How Georgie Rayburn Saved Baseball” with third-graders.
You just knew it was only a matter of time.
Cannabis Career Institute (honestly), which bills itself as “America’s first and premier marijuana business seminar,” is taking its show on the road from California (where else?) to Boston for an event this week that will give attendees their “first glimpse” at marijuana marketing, business plans, corporations and tax structures.
The event is geared toward “cannapreneurs” (we are not making this up) and will host seminars on how to start a medical marijuana business and how to grow medical marijuana commercially and privately.
“People need medical marijuana, and there are hundreds of thousands of careers to be made out of this industry,” said Robert Calkin, founder of CCI and the medical marijuana site cannajobs.com. “No matter what your profession is, there is a place for you.”
A plan of action is created specifically for the attendee, whether it is a grow operation, a dispensary, a delivery service for homebound and terminally ill patients, or an edibles kitchen.
There is even a “certificate of completion” available to those who attend the day-long event, ostensibly to be presented to potential employers down the road.
No word yet whether Grand Rapids City Manager Gregory Sundstrom and Kent County Prosecutor William Forsyth are on vacation this week.