Obama administration plans $320 million to aid Detroit recovery

Top Obama administration officials will head to Detroit on Friday to announce nearly $320 million in federal and private aid as the city grapples with the largest municipal bankruptcy in American history.

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The aid includes money for housing rehabilitation and demolition, some $30 million targeted to fight crime and reduce the city's notoriously long emergency response times, and millions more to rehabilitate the city's transportation network.

The aid package will be announced Friday by HUD Secretary Shaun Donovan, Transportation Secretary Anthony Foxx, Attorney General Eric Holder and White House Economic Council director Gene Sperling.

“We’re going to continue to support the efforts underway in Detroit and ensure the federal government is an active partner in supporting the revitalization of the city," Sperling said. "This effort is about lifting up Detroit, and committing to a shared, long-term investment that will enable the businesses and residents in Detroit to expand opportunity and renew this world-class city.”

The aid, which comes from existing federal spending that is being expedited, pledged and re-purposed, is designed to improve the safety and security of Detroit, which has been devastated by a rapid population decline — and corresponding loss of tax receipts.

The federal government will spend $24 million to rehabilitate buses and install security cameras on board. Another $1.35 million will be devoted to creating a community policing program. The Federal Emergency Management Agency will also underwrite the hiring of 150 new firefighters, as well as new equipment to detect cases of arson.

The administration also hopes to help turn on neglected street lights, establish a police officer bike patrol, and grant $3 million for the hiring of new police officers.

Millions more will be spent on removing urban blight and cleaning up former industrial areas with concentrations of hazardous waste or pollution.

The emphasis on safety comes after a Bloomberg News story in July revealed that Detroit's murder rate — 58 victims per 100,000 residents — was higher than that in the South American country of Colombia. 

In addition to federal grants, the announced package will include private-public partnerships, including some $25.4 million for commercial building demolition. 

The federal intervention will be the first since Detroit declared bankruptcy two months ago, and helps address concerns voiced by many Michiganders upset that the government hadn't done more to intervene.

In July, White House press secretary Jay Carney said the bankruptcy was “something local leaders and creditors are going to have resolve, but we will be partners in an effort to assist the city and the state as they move forward.”

But he indicated that there would be no large-scale bailout coming. Detroit owes its creditors some $18.5 billion in debt.

“The issue here of the insolvency and dealing with that is one that Detroit and Detroit’s creditors will have to resolve," Carney said. "We will be of assistance in general, both in terms of policy as well as just being a partner with Detroit as Detroit finds its way and moves forward in the coming weeks, months and years."

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