The Great Divide

Like two prizefighters circling inside a ring, the east and west sides of Michigan haven’t always seen eye to eye. Competing economic and political agendas play a role, as do envy and distrust. So what would happen if the two sides joined forces?
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Illustration By Andy Potts

There’s no line of demarcation separating east and west Michigan. And in an official sense, neither “place” is really a place at all. But if you think in terms of regions with economic identities, both the east and west sides of the state are distinct entities with their own leaders, specific agendas, and diverse cultures.

While relations between the two sides have been fairly cordial of late — productive, even — the recent camaraderie likely has more to do with the struggling economy and limited resources than anything else.

“The economic stress that everybody is feeling has forced people to realize that if we don’t get Michigan healthy again, none of us will thrive,” says Doug Rothwell, president and CEO of Business Leaders for Michigan in Lansing. “So that’s created an environment in which people at the local level are more willing to work across boundaries than in the past.”

Twenty years ago, resentment and mistrust often dominated the discussions between the leaders of the two regions. Politicians on the west side resented what they saw as disproportionate state resources going to Detroit, while business executives engaged in virtual hand-to-hand combat to expand the economic climate for their own sides of the state.

The competition wasn’t so much for specific private sector projects as it was a case of one-upmanship, in which each side found it necessary to match the other’s development jewels.

Around the time downtown Detroit was welcoming Comerica Park and Ford Field, for example, downtown Grand Rapids was looking for funds for its DeVos Place convention center — and got them. It wasn’t lost on the west-siders that the east-siders had gotten their stadiums, and Grand Rapids wanted it known that Michigan’s second-largest city shouldn’t be forgotten.

While the east side has size, population, infrastructure, and a large industrial base, the west side boasts less crime, lower taxes, a more modern infrastructure, and — it argues — a better work ethic and overall quality of life.

 

In the past, west-siders often looked on the east side as a dysfunctional region, anchored by a troubled core city, which required too much wealth transfer to deal with its problems. By contrast, the east often looked at the west as a smattering of backwater towns filled with religious fanatics and cultural deviants.

Stereotypes? Of course. It’s the stuff regional misunderstanding is made of.

It wasn’t quite a war, but the conflicts were frequently ugly — and it certainly wasn’t the picture of statewide cooperation outsiders like to witness before investing sizeable resources in new projects for the state.

Today, by most accounts, the atmosphere has improved. Whether it’s a result of lessons learned or the economic downturn, which no longer permits the luxury of intrastate pettiness, regional leaders appear to have formed the relationships and understandings necessary to ensure economic development in Michigan is a serious team effort.

“You still have economic development competition between different regions. It’s natural for that to occur,” Rothwell says. “But you don’t see the competition for resources, where people say, ‘You’ve got a stadium, I’m going to get a convention center’; ‘You’ve got this, I’m gonna get that.’ You don’t see the competition for state resources as much, because they’re not there.”

Additionally, key players in the effort are looking at new governor Rick Snyder to take advantage of the progress made to bridge the great divide between east and west, and, with improved cooperation, advance the state’s economic climate.

Rothwell’s Business Leaders for Michigan is today’s statewide iteration of what was once Detroit Renaissance, a business roundtable that functioned in that form for nearly 40 years. In December, Rothwell, who was named chair of the Michigan Economic Development Corp., the state’s main business attraction and retention organization, said several regional initiatives are helping provide the model for the group’s statewide emergence, including the Detroit Regional Chamber’s annual Mackinac Policy Conference as well as the West Michigan Strategic Alliance organization.

“The Alliance is a great example of governments working together and trying to figure out ways — whether it’s regional planning, looking at mass transit, or sharing services — they could be more collaborative and, therefore, provide better services,” Rothwell says. “If you look at it from an economic development perspective, in east Michigan, a number of the business incubators are sharing the same programs in terms of seed money and loan money to start up, which typically would not have happened in the past.”

 

The economic development community took one of its biggest steps toward collaboration three years ago, when it started the process of expanding Detroit Renaissance statewide. Before going forward, Rothwell says, Detroit Renaissance reached out to CEOs across Michigan to make certain there was support for the idea.

“It worked well enough that I don’t think, on a business level, there are very many differences between east and west now,” Rothwell says.
Sarah Hubbard, the former senior vice president of government relations for the Detroit Regional Chamber, says business leaders began the cross-state outreach at a time when political leaders were loath to do so.

“Going back to the mid-’90s with the Detroit Regional Chamber and the Grand Rapids Chamber, there was a lot of friction between public officials and a lot of competition in the legislative process for all kinds of things,” Hubbard says. “The way to help solve that was to get the business community to work more closely together and to hold public officials more accountable.”

The two chambers started meeting jointly, Hubbard says, which cleared the way for the business communities in both regions to work jointly toward goals that mattered for the entire state.

Hubbard recalls a 1994 mayoral exchange between Detroit’s Dennis Archer and Grand Rapids’ John Logie as one of the first and most high-profile moves toward greater understanding and cooperation. The exchange was followed by high-level contacts among business and economic development leaders in both regions, and the mayors continued to encourage cooperation on issues of urban importance, rather than the usual grappling for state aid.

Some proof of the heightened cooperation between the two sides is evidenced by the development of a 24-page white paper published last fall by the Michigan Economic Developments Association. The report includes input from economic development officials across the state, as well as focus groups conducted last summer in Detroit, Flint, Kalamazoo, Lansing, Marquette, and Traverse City.

 

Considering the broad cross-section of contributors, some say the white paper is extraordinarily bold in its recommendations. Among its leading proposals:
• A radical simplification of the state’s tax structure.

• Major reforms in the state’s permits and regulatory processes.

• A comprehensive reform of the state’s workforce programs, to better prepare workers for the jobs economic developers are trying to attract to the state.

• A shift to a much more collaborative approach in labor/management relations. (The white paper notes, without making an endorsement, that states with right-to-work laws tend to be favored in site-selection processes for new businesses.)

• Revamping all small business finance programs in the state, with an emphasis on tax cuts or tax credits to encourage venture investing.
• The elimination of state programs that are often contradictory to local and regional efforts.

• Creating and implementing a major international economic development strategy — an effort the report claims is essentially nonexistent today.
Birgit Klohs, the longtime CEO of Grand Rapids-based The Right Place Inc., which leads economic development efforts on behalf of Kent County, says a relatively small group of CEOs from both sides of the state got the cooperation ball rolling.

“The major step was to get CEOs across the state into the same movement, saying, ‘We’re all in a boat called Michigan, and we’re all rowing in the same direction,’ ” Klohs says.

 

She says the group had established significant influence and enough investment in the state so that, when they started pulling in the same direction, others got swept up in the current. Klohs says the change in cooperation came not a moment too soon.

“The state has experienced a serious (economic) decline in the last 10 years that is very painful, and is caused largely by the auto industry and obviously what came with it,” she says. “But there are very, very bright spots in this state — whether it’s projects in Holland or projects in Oakland County — and the economic development community, formally and informally, works together a lot more closely than people may perceive.”
In some cases, Klohs says, that means the state has managed to find a home for projects that, in the past, would have been awarded to locations outside of Michigan.

“We all understand that we are competitors to some degree, between Oakland and Kent counties or whatever,” Klohs says. “But we meet regularly, and we throw each other the ball over the fence. People are willing to say, ‘If it can’t work here, it [could work] in Muskegon. So let’s give it to Muskegon.’ ”

There was a time when folks in the west felt a patronizing attitude coming from their neighbors to the east. That, too, appears to have changed.
“I think it probably shows up as increasing respect by the east side of the state of what we have created on the west side,” says Fred Keller, CEO of Grand Rapids-based Cascade Engineering, a manufacturer of plastic products made via injection-molding.

Because west Michigan’s economy has benefited in recent years from greater diversity, and has added successful cultural events like the downtown Grand Rapids phenomenon known as ArtPrize, Keller believes his counterparts on the state’s east side are letting go of some stereotypes.

ArtPrize runs counter to the conventional view of west Michigan as stodgy and traditional. It allows artists to choose venues all over downtown Grand Rapids — pretty much wherever they can find a spot — and erect creations that are often edgy and avant-garde. The community’s acceptance of the event, as well as its ability to capitalize on the economic impact, demonstrate a city that is far more urbane and sophisticated than its reputation would suggest.

 

“I think we’ve suffered in the past from kind of a backwater image,” Keller says. “[People think], ‘Those folks over there are very Dutch and religious, and they do things out of the goodness of their heart as opposed to the good, hard business way we do business in the east.’ I think that’s an overstated image, but I think that generally would describe the nature of the divide.”

Of course, the two regions are different. But that doesn’t have to be the basis for poor relations.

“Upstate New York is different from New York City,” Klohs points out. “We have to accept that Michigan is made up of regional economies. That’s a fact of life. But this gap between east and west was always, to me, a lot of perception and some reality.”

The rivalry may not have benefited either side, and it may have hurt the state as a whole, if only because it didn’t present a very harmonious picture of Michigan to outsiders.

“The opportunities that were lost had more to do with the outside perception of the state, rather than us working east versus west,” Klohs says. “Working with site consultants, working with companies directly, this is much more a perception of what the state is and isn’t than of us working together or not. But the message that is being sent by us working together is changing perceptions.”

As cooperation increases, Klohs says, economic development officials in given regions are able to shift more emphasis to a basic tenet of customer service, which is making sure existing constituents are satisfied.

“The message has to be that Michigan is fully engaged in the economic development game, and that includes the entire spectrum — from entrepreneurship and innovation all the way to the support of our existing companies and [the] attraction of new ones,” Klohs says. “And I’m emphasizing the latter, even though I spend 80 percent of my time on the former.”

 

With intrastate cooperation so vastly improved, but with many economic problems remaining, players on both sides are waiting to see if Gov. Snyder can build on the groundwork they have laid.

“This is an opportunity for Rick Snyder to draw on talent and resources from all areas of the state to help build those bridges,” Hubbard says. “This [will happen] through his economic development operations, but also through policies that affect both sides of the state in a very positive way.”

A cynic might ask, of course, why any of this matters. As good as it might be to have business and economic leaders getting along, does it really help to create a job or add one dollar to anyone’s tax base?

Rothwell is convinced the benefits are real and quantifiable.

“The first is the hardest to measure, but the image of the state to people outside the state is very important,” Rothwell says. “Michigan is one of several states that does not work very cohesively and is very balkanized by different governments in terms of race, politics, and labor/management relations. That really does affect people trying to invest here. So the more we can make those divisions go away, you will see an improved perception of Michigan by folks considering us as the place to invest.”

Keller, of Cascade Engineering, believes better relations also put business leaders in the state in a stronger position to advocate for important policy initiatives. He sees business value in expanding networking opportunities as intrastate relations improve.

“We’ve done OK, but I think there is a certain tendency to socialize and work with your colleagues who are in a particular geographic region,” Keller says. “It’s just natural.”

 

Hubbard says business leaders around the world know about Michigan, but at times it isn’t necessarily pretty.

“When we go to India or China to talk to businesses about locating in Michigan … they don’t know anything about Michigan, but they’ve heard of Detroit as the automotive capital, and that’s the identity of Michigan around the world. It’s important that we present a united front from an economic development perspective in this kind of global outreach.”

 

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