Detroit may lease out Belle Isle, water department to save money - FOX 32 News Chicago

Detroit may lease out Belle Isle, water department to save money

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A Detroit Water and Sewerage Department facility on East Jefferson. The city may lease out the department to a regional authority. A Detroit Water and Sewerage Department facility on East Jefferson. The city may lease out the department to a regional authority.
DETROIT (WJBK) -

Detroit has a lot of assets. The question is what to do with them. That answer will be included in Kevyn Orr's plan that he will unveil on Friday.

"Belle Isle, water department, lighting grid, City Airport, those are all aspects that fit into that proposal that we'll be outlining on Friday," said Bill Nowling, Orr's spokesperson.

It is a proposal that the Office of the Emergency Manager says could save the city millions.

Orr says leasing Belle Isle to the state is a move he will make. It will save the city more than $6 million a year.

"We see that as a very positive thing, a great opportunity to bring much needed resources to the table," said Michelle Hodges with the Belle Isle Conservancy.

"It's [in] desperate need of some investment in terms of infrastructure. Bathrooms need to be cleaned up. The whole park needs to be cleaned up and made more useable and better useable for the residents," Nowling said.

However, there is another move looming. The city is also looking at leasing the Detroit Water and Sewage Department to a regional authority.

"It would allow the city to maintain the ownership of the asset, but turn over operation of the asset to an independent organization that could possibly run it better and more cheaply," Nowling said.

It is a move that Nowling said would require Detroit City Council support.

"It could bring in as much as $70 million to $100 million in revenue to the general fund," said Council President Pro Tem Gary Brown.

"Right now we don't make a dime off the water department. People call it an asset, which it is, but having that asset right now doesn't help the city at all," said Council Member Saunteel Jenkins. "If this authority is created correctly, we could actually make some kind of revenue."

Leasing Belle Isle to the state, creating a regional water authority and walking away from the Detroit Public Lighting power grid could save the city more than $100 million a year. However, there are some who say outsourcing the city's jewels doesn't make sense.

"If you've got to give someone $50 million for a lease, exactly how much is coming into the water department. There's billions of dollars that can be made," said Council Member Brenda Jones. "If we continue to lease everything, give everything to someone, there definitely won't be any revenue coming into the City of Detroit."

A Belle Isle lease deal would not happen until the end of the year at the very earliest. Meanwhile, everything else is on the table and under discussion.

Orr will be meeting with creditors and stakeholders, including unions, on Friday.

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