Can Detroit be Saved?

The business sector has proven it can rejuvenate downtown Detroit and its historic districts with new investment, jobs, housing, and entertainment. So what’s the game plan for the rest of the city, where crime, neglect, and inequality impede meaningful pr
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Detroit is a tale of two cities. One is the shining metropolis of stadiums, corporate headquarters, a lively riverfront, casinos, historic neighborhoods, and lofts teeming with young adults, professionals, and empty-nesters. Downtown Detroit, Midtown, Corktown, Lafayette Park, and the more than 20 historic districts in the city are on the rebound, having survived years of disinvestment and neglect. What’s more, these pockets of relative affluence  are racially integrated.

The other Detroit is dying a slow and painful death. Venture into the city’s poorest and most violent neighborhoods and the patterns are hard to miss. Thousands of homes, schools, factories, and storefronts have been abandoned. The city’s geography of segregation, inequality, and income disparity has contributed to an overall sense of hopelessness. If the city can figure out how to repair and transform these vast tracts of perilous desertion, it will be well on its way to becoming a world-class city once again.

But to reach Detroit 2.0 — a moniker favored by Dan Gilbert, founder and chairman of Quicken Loans Inc. in downtown Detroit — the city government must continue to “right size” itself, do away with a discredited central management system, reduce a $327-million deficit and build a budget surplus, encourage the creation of more charter schools, and better train students for high-demand jobs, either in the city or the suburbs.

The latter goal will become more achievable once a dedicated mass transit system is up and running, which is expected by 2016 now that federal, state, and local governments have come together to develop a flexible system of buses connecting some of the most viable commercial and transportation centers including Mount Clemens, Rochester, Novi, Canton Township, Detroit Metropolitan Airport, and downtown Detroit. Smaller feeder buses, which will connect to major employment areas, will complement the system.

“The city lacks leadership in its fiscal affairs, job attraction, education, and the health of its citizens,” says Irvin D. Reid, president of Wayne State University from 1997 to 2008 and inaugural holder of the Eugene Applebaum Chair in Community Engagement. “You can tear down all the houses you want, but unless you offer viable, sustainable neighborhoods, you’re not going to attract residents.”

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On the education front, Reid says the city must do a better job of engaging students and offering them a clear path to career opportunities. “The skill sets for the jobs of today and tomorrow are not being taught in (Detroit’s) schools; rather, we are bringing people in from outside the city or outside the region to fill those jobs,” he says. “There must be a better plan for educating our students. Otherwise, we will continue to see the city’s resources impacted.”

One ray of hope, following years of missteps, cronyism, and scandals, is the Detroit Future City project initiated by Mayor Dave Bing. The 347-page plan, unveiled in January, attempts to align city resources with viable, dense neighborhoods. In turn, vacant and desolate areas will be rezoned into industrial or commercial uses, farming, reforestation, or wetlands. The latter initiative is designed to clean surface water naturally and be less of a burden on the city’s aging sewer system.

Already, the Kresge Foundation has pledged $150 million to the project. Other supportive organizations include the Community Foundation for Southeast Michigan, along with five other foundations: Erb, Ford, Hudson-Webber, Kellogg, and Knight.

To speed development, city planners will need greater flexibility for changing zoning laws without a formal municipal review — which can take months, if not years. “If a neighborhood is too far gone or we have an old commercial district that is no longer viable, city planners should have the flexibility to market an area as an industrial park or a new residential or commercial district,” says George Jackson, president and CEO of Detroit Economic Growth Corp., a quasi-public development agency that works hand-in-hand with developers to spur new and renovation projects across the city.

“You have to take some chances, you have to take some risks, but I’m not talking about turning over large parcels of land to a would-be developer who just sits on it because he can’t get financing,” Jackson says. “They have to be viable, fully financed projects, or otherwise nothing will happen. In the past, we had too many developers who had great vision but little in the way of financial backing.”

THE EARLY YEARS

It wasn’t always this way. For 250 years after Antoine de la Mothe Cadillac edged his canoe onto the Detroit shoreline in 1701, the city prospered. Blessed with natural resources and an abundance of tinkerers, inventors, and risk-takers, the city was a model of productivity, innovation, and modernism. Foreign leaders, businessmen, and urban planners seemed to never tire of visiting Detroit to learn its secrets, in hopes of duplicating them back home.

Throughout the 1700s and up until the 1850s, the city’s main trades were lumber and fishing. As the industrial revolution took hold, Detroit was at the forefront, first constructing large ships before becoming the stove capital of the world. In the early 1900s, the city was the largest producer of automobiles — a title it held until the 1960s. But success wasn’t to last.

Until the economy and productivity grew enough that people could afford their own vehicle, the populace was largely confined to the central business district. While photos of downtown Detroit from a century ago seem to glorify urban living, most residents, if afforded the opportunity, couldn’t wait to get out. Lacking access to a car or truck, the only means of transportation was a horse and buggy or the streetcar system.

The exodus to the suburbs, which began in the 1950s, likely would have happened a lot sooner had it not been for World War II. Factories were built seemingly overnight and the federal government, in lockstep with industry, encouraged people to move to Detroit to help protect the country from another invasion or, worse, German rule. Sound urban planning was thrown out the window.

 

Car plants gave way to military production, and a slew of new factories were built close to neighborhoods to ensure ready access to workers. To help speed the delivery of military parts, the world’s first freeways were built in and around Detroit. By the time the war was over, the city’s population had swelled to 1.6 million people, from 582,000 in 1900. It would peak in 1950 at 1.8 million.

Following the war, some of the factories were converted back to vehicle production, but it would take several years before demand picked up. Over time, the remaining factories were abandoned. Some say Detroit needed its own Marshall Plan following the war. Just as Europe was rebuilt, the federal government should have aided Detroit by tearing down factories and repurposing the land into neighborhoods complemented by schools, parks, recreation centers, and commercial districts. Unfortunately, the help never came.

Operating from Cadillac’s former headquarters in southwest Detroit, Frank Venegas Jr., chairman and CEO of Ideal Group, a multifaceted manufacturing enterprise, says the city’s aging infrastructure needs to be turned into an asset. “We now work in an area that is largely crime-free and drug-free,” Venegas says. “It’s a working zone surrounded by neighborhoods. We hire local people but, more importantly, we work with the local schools to give students a career path.”

Two years ago, the Ideal Group donated 90 iPads to the senior class at Detroit Cristo Rey High School, a private, college-prep institution where students attend class four days a week and work with a nearby employer on the fifth day. Last year, Venegas donated 300 Google Chromebooks to the school’s entire student body; teachers and administrators received Chromebooks, as well.

“The iPads worked out well, but we found the Chromebooks were better since they offer more functions,” Venegas says. “I can tell you the school attributed nearly a 10-percent improvement in overall grade average to the computers. And every senior was accepted into college. I don’t think a lot of schools in the suburbs have seen 100-percent college admission rates.”

RISE AND FALL

Competition also contributed to Detroit’s downfall. By the 1950s, GM, Ford, and Chrysler came to dominate the auto market, with smaller manufacturers like Packard, Studebaker, Nash, and Hudson holding their own. That all changed when Henry Ford II, the grandson of automotive pioneer Henry Ford, launched a price war in a bid to restore his grandfather’s company as the leading automaker.

In 1953, he ordered drastic price cuts on nearly every model. GM and Chrysler, which rarely backed down from a fight, went toe-to-toe with Ford. The smaller players couldn’t compete. In the following year, Nash merged with Hudson and became American Motors Corp., while Packard acquired Studebaker (Packard ceased production in 1958, while Studebaker quit the market in 1966). Ford II, with his price war, set off the last major consolidation of the U.S. auto industry, although American Motors, having acquired Jeep in 1970, partnered with French automaker Renault before the whole enterprise was sold to Chrysler in 1987.

As the auto industry consolidated at home, factories sprang up in emerging markets around the world. Over time, the Packard Plant on Detroit’s east side became the poster child for abandonment. The 3.5-million-square-foot complex, designed by Albert Kahn in 1903, produced 1.6 million vehicles until it closed in 1958. Today, the 74-building campus is rotting and, in its own right, is considered a symbol of the city’s inability to plan and execute a turnaround.

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“When we address a turnaround situation, we start with a clean sheet of paper that simply lists the assets and the liabilities of a given company or organization,” says Van Conway, CEO of Conway MacKenzie, a restructuring and financial advisory firm in Birmingham. “Once you have that, you project out what can be fixed in 12 to 24 months, such as more efficient operation of city departments, as well as projecting what the city’s population will be like and what impact that will have on revenue.”

While the initial fixes are being made, Conway says a long-range plan for fiscal health must be completed. “That way you have a smooth transition from short-term to long-term,” he says. “When you look at the city of Detroit, I see short-term planning that has led to success in places like downtown and Midtown. The Detroit Future City plan offers a blueprint for rightsizing the city going forward, but it will take millions of dollars to implement.”

GREEN ACRES

One replicable form of rejuvenation is urban farming, although it must be paired with an overall plan to clean and maintain aging infrastructure, vacant structures, and empty, often littered, lots, says John Hantz, founder and CEO of Hantz Group Inc. in Southfield and Hantz Farms in Detroit.

“Regardless of whether you farm or not, you have to clean up the city and develop a maintenance plan that can be replicated within each square mile,” says Hantz, who planted 1,000 hardwood trees last year as part of a pilot project in a four-acre area on Detroit’s east side. This year, he plans to plant upward of 15,000 trees, after finally receiving City Council approval following more than two years of review.

“You really need to clean an area first, get rid of the burnt-out buildings, and save what structures you can. Farming is really managed landscaping. It has to be planned, you need a maintenance budget, and you need training programs. Will it provide jobs in the city? Yes. But it is only one piece of the puzzle.”

Overall, there are roughly 2,000 gardens in the city, and Hantz and others see a time when vast tracts might be transformed into agricultural uses, so that the city could essentially feed itself.

Apart from farming, the city is being primed for a change at the top. In November, following voter approval in 2009, seven of the nine City Council seats will be up for re-election by district, while the remaining seats will be filled by at-large candidates. The move is designed to provide more community representation and help avoid politically charged votes.

 

In January, the City Council failed to vote on a plan to turn Belle Isle into a state park. Had the initiative been approved, the state would have invested millions of dollars into Belle Isle, saving the city more than $6 million annually. After the vote was scrapped, Gov. Rick Snyder pulled the plan from further consideration.

While Detroit might be a tale of the haves and the have-nots, Sue Mosey, president of Midtown Detroit Inc., says there are a number of programs that communities can adopt that require limited or shared financial resources, including façade matching grants for businesses and property owners, home repair grant offerings, and the adoption of public parks.

“I know some neighborhoods have annual cleaning programs, but in two weeks things can be back to where they were,” Mosey says. “What we’ve learned is that for a community to move forward, you need a dedicated group of people that will oversee the entire neighborhood. We’re working with the banks on appraisals, because we have a lot of people who want to move into the city, or want to move from one section of the city to another, who can’t get mortgage financing, given the appraisals are too low. Lenders need to work on programs that can bridge the gap. If we could solve that, I think you would see a lot more people move into the city.” db

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