Recession Proof?

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Photograph by Scott Stewart

For most communities, news that its largest private employer was shutting down — leaving 2,100 people looking for jobs, as much as $4.7 million in community philanthropy gone, and a 2-million-square-foot state-of-the-art facility sitting vacant — would’ve been met with shock, disappointment, and panic. And for about 15 minutes, that’s exactly what happened at Ann Arbor Spark, the city’s not-for-profit economic-development office, in late January 2007. Sitting in a staff meeting, the group heard the news that Pfizer Inc. was shuttering its Ann Arbor research-and-development facility as part of the company’s worldwide restructuring.

Shaking off the disappointment, Michael Finney, Spark’s president and CEO for just over a year, began drawing up a plan to turn the dismal news into something good — maybe even great. Ideas soon filled a conference room whiteboard, including what Finney called SWATs, or “strategic working action teams.” The teams, which focused on issues such as talent retention and business development, would be composed of Ann Arbor business people, its government organizations, and its universities to help the community make it through the Pfizer loss.

Finney’s quick action and optimism was replicated throughout Ann Arbor, by many accounts, as everyone from the mayor to Main Street’s small-business owners considered how Pfizer’s actions could affect them.

“I thought about my client list. I had two clients from Pfizer out of a thousand,” says Heather Dupuis, co-owner of Viefit, a boutique fitness center in downtown Ann Arbor. “I may have been isolated from it because of that, but still it made me pause.” Then she went back to finalizing plans to double the boutique’s size. She recently expanded a spinning studio and added a juice bar to keep pace with the needs of her customers, who she says travel extensively and expect the same amenities in their hometown that they see in big cities.

Those who would have to deal intimately with the closure — business leaders, government officials, and Pfizer employees — also went back to business. The business of what they had set out to do at the turn of the 21st century: make the Ann Arbor region a place that tops every list for where to start or grow a business.
“In the early 2000s, we looked at Austin, Madison, San Diego, Boston — all the places that people wanted to be, and we wondered what set us apart from them,” says Kenneth Nisbet, executive director of the University of Michigan’s office for technology transfer. “It wasn’t scientific, and it was somewhat crude, but we looked at what created that entrepreneurial [culture]. We added up those rankings to give us a context of how they did it. We looked at those factors that are all required to build a vibrant economic center with a great quality of life.”

For most of the 113,206 residents of Ann Arbor, and indeed for those looking in from the outside, such painstaking scrutiny may have seemed unnecessary. After all, Ann Arbor often ranks at the top of “most livable cities” or “best place to raise a family” in yearly surveys.

Ann Arbor prides itself on being recession-proof — at least in comparison to the many other communities in Michigan that have been hit hard by manufacturing plant closings. It’s also home to a world-class university, the University of Michigan, with its nationally ranked schools in law, medicine, and social work. Its downtown — unlike other Michigan small towns — is vibrant with locally owned stores, packed restaurants, and nationally recognized music venues like The Ark and Hill Auditorium for performing arts. Zingerman’s Deli, with its corollary businesses of a bake house and a creamery, offers food that most people expect from such cities as New York and San Francisco.

All of that helped Ann Arborites believe their town was insulated from the state’s deep economic problems brought on by the continued contraction of the automotive and other manufacturing-heavy industries. In general, Ann Arbor had followed national economic trends — not state trends — in part because of the presence of the University of Michigan and stable (or so was thought) employers like Pfizer. For example, while the state suffered from a 7 percent unemployment rate in December— the worst in the nation — Ann Arbor’s unemployment came in closer to the national average — just under 5 percent.
 

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