Bloomberg News

Detroit’s Emergency Manager Looms as Candidates Battle for Mayor

April 22, 2013

Detroit’s Emergency Manager Looms as Candidates Battle

Detroit Emergency Manager Kevyn Orr, center, speaks at a news conference as Detroit Mayor Dave Bing, left, and Michigan Governor Rick Snyder listen in Detroit. Photographer: Paul Sancya/AP Photo

Detroit residents this year will elect a mayor who will begin a four-year term in the shadow of a state emergency manager with the power to reshape the deficit- plagued city.

That won’t defuse a campaign spiked with rivalries, racial rifts and the potential for the first white mayor elected in 44 years in a city that’s 82 percent black.

Mayor Dave Bing hasn’t said whether he’ll seek a second term, and one early voter poll showed the former professional basketball star with less than 10 percent support. Even with the handcuffs of state control, the election has stirred voters fed up with crime, blight, darkened streets and fiscal distress.

“People really care who’s mayor, even with an emergency manager,” said Steve Hood, a Detroit political consultant with a local television talk show. “They know in 18 months this sucker is going to be out of here, and they know there’s a day after that. It’ll come down to, `Who can make my quality of life better?’”

Kevyn Orr, 54, a Washington bankruptcy lawyer who worked on the reorganization of Chrysler Group LLC, became the emergency manager March 25 against the opposition of the nine-member city council. Detroit is the sixth Michigan city under state control, though by far the largest and most complex, with a deficit pushing $400 million and almost $15 billion in long-term debt.

Two-Man Race

A new law gives emergency managers more sweeping authority to realign services, sell assets and cancel union contracts. Under the law, the council may oust Orr after 18 months with a two-thirds vote, though that would automatically send the city into mediation and a possible Chapter 9 bankruptcy filing.

Eight people have said they’re running, though polls show a two-man race. The candidates have until May 14 to file for a ballot spot. An Aug. 6 primary will whittle the nonpartisan field to two candidates for a Nov. 5 runoff.

Leading the polls are Wayne County Sheriff Benny Napoleon, 57, -- he’s a former Detroit police chief -- and Mike Duggan, 54, a former Detroit hospital executive and county prosecutor. Duggan is the only white candidate, having moved from suburban Livonia to Detroit last year. He’s worked in the city most of his adult life.

Both men said a strong mayor is needed, after Orr leaves, to fight crime, blight and bureaucracy in order to attract new businesses, jobs and residents to the city, the home of General Motors Co. (GM:US)

“The city cannot continue to be the poster child for violent crime in America,” Napoleon said in a phone interview.

Rising Yields

The election is important to investors with a stake in Detroit’s long-term health, said Rick Frimmer, a bankruptcy lawyer with Schiff Hardin LLP in Chicago who represents some Detroit bondholders.

Detroit tax-exempt general-obligation bonds maturing in April 2016 traded yesterday at an average yield of 8.76 percent, according to data compiled by Bloomberg. That compares with a 0.51 percent interest rate on benchmark munis due in three years. At this time last year, the debt traded at a yield of about 6.61 percent.

Frimmer, in a phone interview, said the next mayor must be a consensus-builder with financial skills to carry through changes that will attract new businesses and jobs.

“It’s important for a city of that size to have a strong person,” Frimmer said.

The campaign is heating up as Detroit’s executive office recovers from scandal and struggles with dwindling tax revenue.

Kilpatrick Scandal

Former Mayor Kwame Kilpatrick resigned in 2008 after he pleaded guilty to lying under oath about an extramarital affair with his chief of staff. On March 11, Kilpatrick was found guilty of federal corruption charges stemming from his tenure as mayor. He awaits sentencing.

Bing, 69, a former businessman and National Basketball Association Hall of Famer who played for the Detroit Pistons, was elected in 2009 with hopes he’d lead with a dignified, businesslike approach.

Like mayors in New York, Boston and Atlanta and other major U.S. cities, Bing came to office amid the worst financial conditions in a generation. He’s struggled to close a growing deficit and population hemorrhage that’s left almost 40 percent of city lots vacant or unused.

‘Dogfight’ Seen

An early March poll showed Bing supported by only 8 percent of voters. Duggan led by a 2-1 ratio over Napoleon in the poll of 581 Detroit voters by Mitchell Research and Communications of East Lansing, Michigan.

An April 16 poll showed Napoleon leading Duggan, 39 percent to 38 percent, with other contenders far behind. The automated poll by Main Street Strategies of 1,277 likely Detroit voters has a margin of error of plus or minus 2.95 percentage points.

“This will be a dogfight between Napoleon and Duggan through the primary and into the November election,” said Joe DiSano of Main Street Strategies. Either candidate could break away and win, he said.

Napoleon, supported by labor unions and church leaders, said that as a lifelong resident he knows the pain from the decline of a once-mighty industrial city of 1.8 million people to a symbol of blight. More than one-third of Detroit’s remaining 700,000 residents live below the poverty level, according to the U.S. Census.

“We need leadership that understands the sensitivities of the community, the financial difficulties and who understands how government works,” he said.

Executive Experience

Duggan touts his experience as the chief executive officer who rescued the Detroit Medical Center from near-bankruptcy, and as a top Wayne County official who revived a regional bus system. He left his hospital post to explore becoming mayor.

He said there’s no guarantee the emergency manager will leave in 18 months as promised. Duggan said as a turnaround expert with a detailed plan, he’d convince Governor Rick Snyder to continue Detroit’s recovery without an emergency manager.

“You’ve got 20 departments and you need 20 outstanding people to leave their careers and come in and turn this city around,” Duggan said in a phone interview. “Who’s going to leave a successful career to come work for an emergency manager for an undetermined period?”

Duggan can win a primary, though he’ll have more difficulty in a general election in which about 75 percent of voters will be black, said Steve Mitchell, who’s conducted Detroit political polls since 1989.

Racial Angle

Candidate Tom Barrow, 64, who lost to Bing in 2009, called Duggan an “outsider” and “not one of us” in an April 1 appearance on an Internet-based content provider. He also accused Duggan of running a campaign of “prejudice and bigotry and a subliminal appeal to Detroit whites.”

Duggan said his family moved from Detroit when he was 6, though he attended a Detroit Catholic high school. His father, Patrick Duggan, is a federal judge in Detroit, and the candidate said his great-grandfather was a Detroit blacksmith.

Race, he said, isn’t an issue among the 2,500 mostly black campaign volunteers he’s signed up at meetings.

“If I could meet every voter in Detroit, I’d win this campaign easily,” Duggan said. “Race goes away and people end up human beings talking to human beings about problems.”

Napoleon said he was encouraged by thousands of Detroiters to run for mayor. He said it’s obvious Duggan is white, and said media are hyping the race angle.

Race shouldn’t be an issue, said resident Dustin Campbell, 33, who’s black and said he’s more concerned about low voter turnout. About 23 percent of Detroit’s 572,500 registered voters cast ballots in the 2009 general election, according to the city clerk’s office.

Campbell said young voters who opposed a state takeover of Detroit may be discouraged after they voted successfully last November to repeal a 2011 emergency manager law, only to see the state enact a similar measure a month later.

“A lot of voters’ feelings are hurt,” said Campbell, who plans to run for Detroit city council this year.

To contact the reporter on this story: Chris Christoff in Lansing, Michigan at cchristoff@bloomberg.net.

To contact the editor responsible for this story: Steve Merelman at


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