DETROIT—In the most drastic move yet to save Detroit from bankruptcy, Gov. Rick Snyder Thursday cut away some of the power of the local elected government by the naming of Jones Day partner Kevyn Orr as the city’s emergency financial manager.

The state’s Local Emergency Financial Assistance Loan Board approved the hiring of Orr for a reported $275,000 per year to bring the city out of a massive debt hole. A preliminary review of the city's finances, conducted last fall, found that a "serious financial problem" existed in Detroit as a result of several issues. An independent, six-member financial review team, appointed by Snyder on Dec. 18, 2012, concluded unanimously Feb. 19 that a financial emergency exists in Detroit and that no satisfactory plan is in place to overcome the city's fiscal crisis.

Orr specializes in assisting organizations experiencing severe financial trouble, ensuring that they were brought to proper resolution, including representing Chrysler in all aspects of its 2009 bankruptcy and restructuring. Among other positions, Orr previously served as assistant general counsel for Complex Litigation and Bankruptcy at the Resolution Trust Corp. in Washington, D.C., and as a litigator for the Federal Deposit Insurance Corp.

Orr will begin on Monday, March 25, and will work with Detroit officials and seek citizen input to create a written financial plan that will set a blueprint for solving the financial emergency. Gov. Snyder says in a statement that he remains convinced that a financial emergency exists in the Motor City. "With this action and by working together, we can rebuild the sound financial footing needed in Detroit,” Snyder says. “The extensive experience that Kevyn Orr has in working to turn around financially troubled organizations will serve the citizens of Detroit well. He will bring a fresh, objective look at Detroit's finances that is needed to end this financial crisis which has been more than a half-century in the making."

The move was greeted by protests in Detroit and the state capitol, Lansing, as well as threats of a lawsuit by residents and the City Council. Detroit Mayor Dave Bing has already issued statements of support for Orr’s hire.

It’s not clear yet how the move will affect the Detroit’s commercial real estate industry, but it’s assumed that any moves to get the city’s infrastructure repaired and clean up problems with crime and corruption will be welcomed by the business community. Various development projects are already ahead of the resurgence curve, as Detroit Red Wings and Little Caesar’s Pizza owner Mike Ilitch has already announced plans for a new hockey stadium downtown, as well as Quicken Loans head Dan Gilbert’s moves the past two years to buy up older properties downtown for redevelopment into retail, office and multifamily uses.