Can Kevyn Orr Fix Detroit?
The Chevy Chase lawyer has faced daunting challenges in both his personal life and his career-from tragic losses to helping to keep Chrysler afloat. But his latest task is right up there: rescuing a once-great city that has fallen on hard times.
It’s a tranquil Friday morning in early summer on the shady, dead-end street where Kevyn Orr resides in North Chevy Chase. Home for an extended weekend of family time, Orr converses in a relaxed manner inside, occasionally reaching over to give his chocolate Labrador retriever a reassuring pat as his two young children play quietly nearby.
The scene seems a world removed from the maelstrom of Detroit’s Coleman A. Young Municipal Center—Orr’s temporary place of business, 500 miles to the northwest—where, in a dramatic series of moves just 24 hours earlier, he stripped the city council president of his salary and power for failing to show up for work; ordered the termination of the city’s contracts with two major municipal unions as a prelude to renegotiating them; and yanked responsibility for providing electrical service to several local institutions, including the school system, from Detroit’s aging, money-losing Public Lighting Department.
Orr’s authority for these actions, along with other headline-making moves just weeks earlier—which included telling the city’s creditors that Detroit could afford to pay just pennies on the dollar to settle upwards of $11 billion in unsecured debt—was handed to him in late March. Invoking a controversial state law known as Public Act 436, Michigan Republican Gov. Rick Snyder bestowed upon Orr—a highly regarded Washington bankruptcy and restructuring attorney who is a lifelong Democrat—the understated title of emergency financial manager.
But “for all practical purposes, he is the mayor,” veteran Detroit journalist Allan Lengel says. In fact, Orr’s offices are adjacent to those of the current elected mayor, onetime Detroit Pistons star Dave Bing.
Orr’s powers extend to the city council, whose actions are subject to his approval; in most instances, he can simply supersede the council if he so chooses.
Notwithstanding this sweeping mandate, Public Act 436 guarantees Orr a mere 18 months to address problems that have festered for decades in what was once America’s fourth largest city (now its 18th, tumbling from a onetime high of 1.8 million residents to barely 700,000). Detroit’s diminishing options were underscored in late July when Orr filed a so-called Chapter 9 petition in federal court—giving him the precedent-setting legal task of navigating the city’s emergence from the largest municipal bankruptcy filing in U.S. history.
But as a man who has faced down tremendous challenges—not just in his career, but in his personal life, with the murder of a onetime girlfriend at the hands of a serial killer and the deaths of his two brothers—he’s perhaps uniquely qualified to tackle a job that would be daunting to anyone else.
The task is not one to which Orr aspired—or one he was initially inclined to accept.
Orr had been working in the Washington office of Jones Day, an international law firm, for 12 years when he was first approached about the Detroit job. He had just been named partner-in-charge of Jones Day’s new office in Miami, the city where he had started his legal career three decades earlier.
“My first impulse was, ‘I don’t want to do this. I’m very happy in the firm. Things seem to be going quite well,’ ” the 55-year-old Orr says. Barely three years earlier he handled what many in his field consider the case of a career—representing the Chrysler Corp. in a six-week proceeding in New York during the summer of 2009 that was considered key to enabling the No. 3 automaker to avoid liquidation and be sold to Fiat.
There were personal considerations, as well. “I used to volunteer for the car pool, get involved in the schools, and coach my son’s baseball team,” Orr says. “So I’m thinking: ‘It’s going to take away from my family.’ ” He and his wife, Donna Neale, an obstetrician/gynecologist at Baltimore’s Johns Hopkins Hospital, have a son, 7, and a daughter, 5.
He accepted only after much cajoling from the Michigan governor’s closest adviser, Rich Baird, along with encouragement from Stephen Brogan, the Jones Day managing partner whom Orr regards as a mentor.
“When you’re a professional given that kind of opportunity, you have to think long and hard before you pass it up,” Brogan says.
Orr’s wife was in favor of the move, too. “My wife [was] saying, ‘Put up or shut up,’ after spending years [listening to] me on Sunday morning talk about Meet the Press and grumping and grousing,” Orr chuckles.
But taking the job involved “sacrifice,” Orr says. For one, Orr says his $275,000 annual salary as Detroit’s emergency manager is “a fraction” of what he had been pulling down as a partner before resigning in March from Jones Day’s D.C. office. “But it’s the right thing to do,” he says.
So at least through the end of September 2014, Orr will remain a weekend resident of Chevy Chase, sleeping weeknights in a Detroit condo, having his mail screened and traveling around the city accompanied by a security detail.
“I had not understood the loss of privacy and the scrutiny—and that’s probably some naïveté on my part,” says Orr, who has quickly become a household name in Detroit. “I get up in the morning, my security detail meets me downstairs. I come home at 8, 9 o’clock, they walk me to my door and lock me in. It’s a very cloistered life. I miss the anonymity.”
At the top of Orr’s mandate is restructuring the city’s finances. Detroit’s long-term debt and pension-related obligations, which combine to total $20 billion by some estimates, threaten to devour two-thirds of the city’s annual operating budget by 2017—at the expense of providing public safety and other essential services in a municipality saddled with the nation’s highest crime rate among cities of more than 200,000.
In several experts’ view, efficiently providing those services involves shrinking a depopulated city that sprawls over an area equal to Boston, San Francisco and Manhattan combined. It’s both a legally complicated and politically sensitive task.
“The size of [Detroit] is so phenomenal in terms of how much of it is empty now. In that way, it is fundamentally different than any other city I can think of in U.S. history,” says Frank Shafroth, director of the Center for State and Local Government Leadership at Virginia’s George Mason University. “No one has ever had anything like Kevyn Orr faces in Detroit, because it’s really a geographic-based bankruptcy as much as anything else.”
But an equally daunting part of Orr’s mission involves taking on the political and social culture in the world’s one-time automobile capital, where one former mayor, Kwame Kilpatrick, is facing decades in prison—with several other former local officials also serving time.
“Detroit has been run for so long as a city of go-along, get-along, who you know, inside deals,” Orr says. “It’s got to stop. Some of that is going to happen on my watch.”
Exasperation is evident in his voice as he discusses the current state of the jurisdiction whose future now rests in his hands. “It’s otherworldly,” he declares. “Everything doesn’t work.”
Such blunt talk has won Orr high marks both inside and outside Detroit. In late June, a Washington Post editorial declared: “Urban America has a much-needed truth teller, and his name is Kevyn Orr.”
But as evidenced by the security contingent that surrounds him constantly, Orr’s arrival in Detroit was less than universally hailed.
“I would say his reception has been wildly mixed, some of it along racial lines,” says Lengel, a former Washington Post reporter who co-founded Deadline Detroit, an online news site. “Some people see it as a wrestling away of democracy in Detroit. But I think a lot of other people see it as: The city is such a mess that finally somebody is coming in, taking a look under the hood, and really giving a true assessment of how bad things are.”
Critics of Public Act 436 and similar statutes contend they’re usually invoked by a white-dominated state government in municipalities that are mostly black. Detroit is presently almost 83 percent African-American.
“I think Mr. Orr does have an advantage because of the fact that he is African-American,” says city councilman Ken Cockrel, who served as Detroit’s interim mayor from 2008 to 2009. “I think the…reality is that, if the governor had chosen someone who is not African-American, that would have been fuel to the fire.”
That is not to say that the color of Orr’s skin has assuaged all critics. Rev. Jesse Jackson suggested that Orr was part of a “plantation-ocracy,” and protesters tried to deliver boxes of Oreos to Orr’s office.
Orr, whose roles at Jones Day included ensuring diversity within the firm, says he took the initiative in raising the issue of race early on.
“Rich [Baird] said, ‘It’s going to be volatile. Lots of things are going to be said about you. You’re going to have the Uncle Tom word thrown around, and all that.’ I said, ‘Rich, I’ve been hearing Oreo and Uncle Tom since I used to fight my way home from kindergarten and first grade.’ ”