Restoring Detroit from the bottom up

Certainly, there is a committed corps of bright, dedicated business people who wear themselves out trying to fix Detroit's problems. But they're too few in number, and too few of them can be called giants. The erosion of Detroit's industrial base has left it without the concentration of wealth and power that produces world-class leadership ... But leadership of the Ford/Fisher caliber is what it will take to save Detroit.

- Nolan Finley, Editorial Page Editor of the Detroit News

In his column published yesterday, Finley laments the diminished power of Detroit's business titans. Once upon a time, he writes, big names like Henry Ford II and Max Fisher had the clout to raise millions of dollars and build city-saving institutions like the Renaissance Center. Without leaders like those today -- super rich and super powerful -- the city will never turn around.

What he ignores, of course, is that the city fell apart on their watch. Since the 1950s, one "city-saving" project after another has been pushed by the region's business elite. Highways, museums, stadiums, hotels, casinos, the Renaissance Center -- each new project was heralded as the key to the city's revival. And each one, in its way, failed. Even as downtown has improved, the neighborhoods have kept declining, rapidly. And even downtown the pace of demolition has exceeded the pace of development. And go figure. With a few praiseworthy exceptions, the movers and shakers Finley expects to save the city have almost uniformly abandoned it. They might bankroll the cultural institutions (and deserve gratitude for that), but most of them long ago moved their own homes, their offices, and their factories outside the city's borders, draining it of the one resource it needs most: jobs.

So pardon me if I don't sit around waiting for a handful of wealthy patrons to save the city. They have a role to play, certainly. The new light rail line being built from downtown to New Center is a great example of what private philanthropy can do, and there are some pretty big names behind all the region's major foundations, which have funded great, publicly-oriented projects like the RiverFront and the expansion of the DIA. But if the city's neighborhoods ever turn around, it'll be thanks to the small businesses, non-profits, and community activists that are planting trees, building community gardens, opening businesses, restoring historic buildings, fighting government corruption, and otherwise committing themselves to the city's restoration on a day-to-day basis. A few business titans, acting alone, can't save us. A community can.

Cause for cautious optimism

Detroit's economy may be moribund, but thanks to some new initiatives, it may not remain that way forever. To start with, the New Economy Initiative for Southeast Michigan, a consortium of ten foundations formed last year, is putting $5 million behind a new training program for entrepreneurs that will lead to 400 new start-ups a year. The sessions will be hosted at Wayne State's TechTown and run by the Ewing Marion Kauffman Foundation, the nation's leading foundation on entrepreneurship.

Three smaller initiatives are also getting great press. TechTown itself has been exceptionally successful, attracting eighty businesses and a long waiting list to its New Center location. Open City, a monthly meeting of Detroit business owners, was recently profiled by CNN for the remarkable collaboration and community it has sparked. Quicken CEO Dan Gilbert's Bizdom U has also gotten recognition for its free, two-year training program for select entrepreneurs. None of these are quick fixes for the ailing economy, but by focusing on the fundamentals, they should spark more job growth in the long run than ineffective tax incentives or the usual splashy projects, like stadiums and casinos, ever could.

Jobs, please

Rochelle Riley has a telling column on a Renaissance High and Harvard grad who chose to move back to Detroit but can't find a job in his field of choice, urban planning and development. The point here is pretty obvious. In a state rapidly losing population and half of its own college grads, shouldn't local businesses and agencies do everything they can to recruit and retain the local talent that actually wants to stick around? Yes, Detroit has a small, thriving do it yourself culture, and young entrepreneurs regularly kick off cool new businesses and non-profit projects, but let's be honest, that path is for the courageous few. Something needs to be done to keep the other 95% in town, starting with a clear path to whatever good, steady employment remains in our post-auto economy.

Unexpected good news

To my surprise, the News is reporting that plans to build an $80-million outdoor mall at 8 Mile and Woodward are proceeding. Yes, the project has already been delayed for two years, and today is April Fools' Day, but if the developers are to be believed, construction could actually begin as soon as next month. If constructed, the Shoppes at Gateway Park would be the largest commercial development built in Detroit in fifty years.

The mall would also mark a major transformation of the corridor. While the neighborhoods to the west (Palmer Woods, Sherwood Forest) are among Detroit's most affluent, the area just south and east of the proposed mall is as desolate as any in the city, with vacant lots and burned out homes outnumbering occupied dwellings. What's more, the major anchor of the area, the State Fairgrounds, is being shut down by the state. So the new mall will truly be a turn of events.

Retail fund to the rescue

There's a new $5 million fund for downtown retail, the News reports. The Detroit Investment Fund will give loans ranging from $50,000 to $500,000 to establish new storefronts in the city's five core neighborhoods -- downtown, Corktown, Midtown, Eastern Market, and the riverfront. Together with new greenways and proposed transit projects, this could keep the downtown area on an upward trajectory. What's still missing, though, is housing. If all the condo and loft deals are dead, who will keep these stores in business? Let's hope the real estate market finally starts to rebound soon.

Don't panic

Lately, it seems another downtown business closes its doors every other day -- Borders, Sweet Georgia Brown, Zaccaro's Market. The Free Press says revitalization has stalled. Even the well received Mercury Coffee Bar shut its doors Monday. Thus began the wailing and gnashing of teeth: downtown is dead, Detroit is doomed.

Let me let you in on a secret. Half of all new businesses fail within four years. And we're in a recession. In fact, the city itself has arguably been in a depression for decades. So while we should celebrate and promote all the new businesses that come on board, there's no need to declare defeat whenever one (or even two or three) shuts down. Just look at the turnover in Royal Oak. A business fails there every month, but no one's writing the downtown's post mortem. It's just the way it goes.

Oh, and Mercury Coffee Bar? It's set to re-open next Friday. It's joined by a fancy new French cafe at Trumbull and Howard in Corktown and a new produce market on John R in Brush Park. Go check 'em out.

Revitalization on hold

The Free Press confirms the obvious today: the revitalization of downtown has stalled. The proposed Cadillac Centre is dead, condos aren't selling, and Quicken's move downtown is highly uncertain. New hotels have opened and DTE renovated its campus, but those projects were underway before credit dried up. Some existing stores are disappearing, too, like the downtown Borders. Development isn't totally dead -- five new coffee shops have opened recently -- but things have sure slowed down.

Dublin, Detroit, and taxes

In April, the Free Press pointed to Pittsburgh for lessons on how the city of Detroit could revitalize itself. This week, Ellen Creager looks farther afield to Dublin. In a nutshell, Dublin went from bust to boom by slashing corporate taxes and investing its E.U. subsidies in education. Unfortunately, as the author repeatedly acknowledges, those lessons mean little for Detroit beyond the obvious (businesses like low taxes, and a better-educated workforce is, well, better) because the parallels between the cities are so few.

If there's a real lesson to be drawn, it's that Detroit needs to overhaul its tax system, which is currently caught in an unforgiving loop. As more residents leave, revenues decline, leaving fewer people left to pay for city services. To balance the budget, the city makes further cuts to services and is forced to raise fees, sending yet more residents fleeing, and forcing another round of belt-tightening and/or tax-raising.

This is obviously unsustainable. At some point, the city must find a way to lower its taxes -- especially the much-hated city income tax -- but it can't do so without an alternative source of revenue to compensate for what will initially be a serious drop in revenue. For now the city and county seem to hope that new tax incentive programs, like Land Bank T.U.R.B.O., will be sufficient to jumpstart new development.

Russell Industrial Center expands

The Russell Industrial Center continues to grow. The Free Press reports that in addition to the buildings' growing stable of art studios, the complex will soon feature a retail market, a film theater, and a drive-in.

Gilbert will build two towers downtown

John Gallagher of the Free Press says Dan Gilbert plans to develop both offered parcels downtown -- the Hudson site on Woodward and the Statler site on Grand Circus Park. One will house Quickens' headquarters while the other will be "a mixed-used office, retail and possibly residential tower." No word yet on which will be which; he has until November to decide. Rumor has it that the Deloitte & Touche consulting firm may also build a new tower downtown when its lease at the Ren Cen expires.

“Let’s Meet in the D!”

Tom Walsh of the Free Press reports that Christopher Ilitch is leading a campaign to get local businesses to hold conventions Downtown rather than other cities. Why send your employees to Vegas when we have casinos and hotels here?

A number of firms have already made this sensible pledge: Little Caesers, General Motors, Ford Motor, Bank of America, Blue Cross Blue Shield of Michigan, Crain Communications, Deloitte, Detroit Medical Center, ePrize, Northwest Airlines, Strategic Staffing Solutions, Verizon Wireless and the Michigan Economic Development Corp.

$220,500 offered for GAR building

A new offer is on the table for the castle-like Grand Army of the Republic building downtown:

$1.25 million for retail on Jefferson

The Community Foundation of Southeast Michigan is sponsoring a $1.25 million program through the Detroit Economic Growth Corporation to spark retail development along a 3-mile stretch of East Jefferson from Downtown to McClellan St., near the eastern end of Belle Isle.

Privatization of City Airport sought

Like every mayor before him, Kwame has a plan to revive City Airport. This time, the News reports, it's runway expansion and privatization along the lines of the Detroit Zoo or Eastern market: the city would retain ownership of the airport but a private group would manage it.

Any plan would improve upon the present strategy. The city began buying out local property owners 13 years ago to create a "safety zone" around the airport and prepare for a possible expansion. The expansion never happened, the buyouts were never completed, and the neighborhood has been needlessly decimated. It's long past time for the city to follow through on its plans and make something of the airport or restore the surrounding community.

Detroit stimulus plan proposed

Kwame Kilpatrick revealed details of a new $300-million economic stimulus plan today (see the Free Press or the News). The plan includes:

• $75 million for a rainy-day fund
• $15 million for business loans
• $10 million to prevent foreclosures
• $200 million for public works projects including "new Eastern District police headquarters; new fire stations for the east and west sides; new fire training complex; streetscape improvements; demolition of 50 abandoned commercial buildings; park upgrades, and dozens of other projects."
  

Now for the caveats.

• The city may need state approval to issue bonds.
• The mayor assumes casino revenue will increase substantially; if it doesn't the city will have to dip into revenue currently earmarked for other projects to pay back those bonds.
• Many on the City Council contend infrastructure can wait -- Detroit needs to rehire firefighters and policemen first.
• The Council is loath to pass anything proposed by the mayor.

So with that said, we'll see if this goes anywhere.

More money to make Paradise Valley

The News reports that City Council plans to spend another $7.5 million in its effort to transform Harmonie Park into Paradise Valley, a downtown district that the city hopes will be a hub for black-owned businesses and black culture. The name honors Paradise Valley / Black Bottom, the black neighborhood that was demolished in the era of "urban renewal."

The city certainly deserves a thriving black-owned area, but the article's quote of Councilwoman Barbara-Rose Collins still strikes me as needless: "Someone suggested to me it would be easier if we said Harmonie Park/Paradise Valley. I said no. This is Paradise Valley. This is not Harmonie Park anymore." In other words, the city once demolished Paradise Valley, so the city will now erase Harmonie Park in turn. So much for the spirit of historic preservation.

Also in the news

The News describes Kwame's rise and fall in depth and reports on Wayne State's new community-based research program in the School of Social Work, which will work with local agencies to determine best practices for confronting the major social problems in our area.

Crain covers an event urging cooperation with Canada, new tax incentives for urban brownfield development, and the many upgrades being made to hotels in Detroit. Also in Crain's this week: 20 in their 20s, profiles of young leaders in Metro Detroit that prove that not all promising college grads are fleeing, just most.

"Creative class" interview

Metromode has an interview of Richard Florida, the academic behind the "creative class" theory that says the survival of post-industrial cities depends on attracting creative types and highly-educated professionals. I didn't think much of the interview (he speaks in slogans like an advertising executive), but his influence is undeniable. The governor's Cool Cities initiative, for example, cites his work.

Update: As a counterpoint, here's a City Journal article that argues that only low taxes and basic services lead to job growth. An unimaginative and reductive argument, but it surely has some truth as well. Detroit may build a bohemian center amidst present-day decay, but the city cannot attract a flourishing middle class without efficient, effective governance. If taxes are going to be high (as they are in most major cities), they need to be put to very good use.

Redevelopment presentations

Many of the most interesting presentations given at the Michigan Suburbs Alliance's March 7 Regional Redevelopment Summit are now available online. The summit was geared toward preparing area leaders in government, development, real estate, and the non-profit community for the Brownfields2008 Conference, which will bring developers from across the country to Detroit from May 5-7 for a historic opportunity to make deals to redevelop vacant or abandoned property in Detroit.

Hat tip: Transportation Riders United.

Detroit fashion

The News reports on the fourth annual Detroit Fashion Week, which began Sunday and runs through Saturday at Asian Village (521 Atwater). The goal is "to bring designers, models, beauty professionals and businesspeople together to create a more cohesive and prosperous atmosphere for Metro Detroit's fashion industry." The official website isn't pretty but it has more information.