Water World

How a $26-billion plan to revitalize Michigan and the Great Lakes ‘Freshwater Coast’ could lead to $100 billion in economic development
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northern michigan shore
Photograph by Ed Wargin

Whenever it rains more than 2 inches in Bay County, Mich., sewer systems in the area often release combined sewer overflows, a mix of wastewater and storm water, into nearby rivers and streams. Combined sewer overflows serve as a safety valve to prevent untreated wastewater from backing up into homes, flooding streets, or bursting underground pipes when its volume exceeds the capacity of the sewer system. Soon, thousands of gallons of untreated wastewater are rushing their way toward the Saginaw Bay, along with phosphorous and other nutrient-rich agricultural byproducts from the 22 counties that make up the Saginaw Bay watershed. This concoction stews in the shallow bay, where algae bloom, die, and are blown up along the shoreline to form what locals call “beach muck.”

“As you get closer to the water, you start to smell an odor; then if you step into the water, you might sink up to your knees in the muck,” says Ernie Krygier, Bay County commissioner and president of the advocacy group Save Our Shoreline. “It’s not just dead plant life; there’s E. coli in it.”

Beach muck is just one of the issues, along with jobs, education, and transportation, that must be addressed before the full potential of the regional renewal and revitalization concept called the Freshwater Coast can be realized. The Freshwater Coast (also called the North Coast) extends from Minnesota to New York — anywhere the land touches a Great Lakes shoreline. Backers of the concept, like John Austin, vice president of the Michigan Department of Education and nonresident senior fellow at the Brookings Institution in Washington, D.C., say that Detroit, the state of Michigan, and the entire Great Lakes region have as many or more natural and intellectual resources and, therefore, more economic potential, than the country’s other coasts, and that we should leverage those strengths to revive our sagging economies.

Austin has emerged as a prominent voice in support of reinventing the Rust Belt as a vibrant fourth U.S. coastline. His name appears on many Brookings Institution reports about the economic potential of the Great Lakes, including the 2007 report “The Vital Center — A Federal-State Compact to Renew the Great Lakes Region,” which “… remains a vital part of the U.S. economy and possesses many assets that, if leveraged, can help it be a major contributor to the knowledge economy.”

There’s good reason why the West Coast and the Gulf Coast and the East Coast are thriving economically, Austin says. “In part, it’s because people want to live and work and be near the coast. Particularly for well-educated people or knowledge workers, it’s very important to be near natural amenities, from looking out your office window over the Detroit River or the Chicago River to having the chance to take out your sailboat or your kayak. We have a unique economic opportunity [in that] Michigan and its sister states and provinces are located on a … coastline that makes us an attractive place to live and work.”

Austin says it’s not just a matter of lakes and beaches and sand dunes. “We’re a leading research and knowledge-creation center, we have world-leading research universities, and we have large corporations that do their R&D work here. We have an incredible opportunity to be a center of education and learning.” Indeed, according to the Institute of Higher Education at Shanghai Jiao Tong University, the Great Lakes region is home to 19 of the world’s 100 top-ranked universities. Brookings research shows that the region accounts for 29 percent of the nation’s total public and private research and development, and nearly one-third of the country’s new intellectual property in the form of patents.

The perception and reality of Michigan as a beat-up industrial state with hulking factories and obsolete mills on its waterfront — that’s real,” Austin says. “So part of what we’ve got to do is tear down or remake our waterfronts to be open for people to develop new offices and residences, and that’s beginning to happen on the Detroit riverfront. It should’ve happened 20 or 30 years ago.”

Sarah Hubbard, vice president of government relations at the Detroit Regional Chamber, thinks we need to market the Great Lakes region to the world as a destination, similar to what the Pacific Northwest and the South do for their regions. “The Great Lakes have unique assets that should be considered when companies are looking for a place to do business,” she says. “[We have] lakes, access to fresh water, the border with Canada, infrastructure, [and] the crossroads of the NAFTA corridor going from Canada to Mexico. Most of that trade comes right through Michigan. Michigan is also known as a melting pot for high-skilled immigrant labor, very talented people who come here and work in the knowledge industry.”

This thinking isn’t lost on the business and political leaders consumed with trying to figure out how to recast their region as a post-industrial economy. In February 2008, just months after Austin published “The Vital Center,” the Summit of Midwestern Chambers of Commerce convened at The Henry Ford in Dearborn, bringing together 45 CEOs and staff from 30 metropolitan chambers of commerce and municipal leagues in the Great Lakes region. Led by a core of chambers from Detroit, Milwaukee, Chicago, Toledo, and Pittsburgh, the group established priorities relating to transportation; border security; immigration; research, development, innovation; and the creation and preservation of clean water resources.

“Out of that meeting in February came an agreement that we would take these priority areas back to our individual communities, that we would make them business priorities, and that we would … begin a dialogue with those running for public office in the fall on the importance of these areas,” says Ed Wolking, executive vice president of the Detroit Regional Chamber and president of the Great Lakes Manufacturing Council. “It’s our chance to get focus and commitment to delivery in these five areas.”

That last priority focuses attention back on beach muck, PCBs, dioxins, and the entire nasty cast of pollutants that must be cleaned up before the Freshwater Coast can reach its full potential as a magnet for new businesses and residents. Some progress has already been made. “We’ve been very active in policies related to the environment in the basin,” says George Kuper, president and CEO of the Council of Great Lakes Industries, which represents around 40 Canadian and U.S. companies with significant operations in the Great Lakes basin. “We’ve been very active in cleaning up some of our past behaviors, voluntarily removing some toxins from the basin. [But] we’re woefully behind in cleaning up our sewer infrastructure, [and] every time it rains, we have a problem on our beaches.”

northern michigan shore
Photograph by Ed Wargin

That has to be addressed, Kuper says. “And we’ve been working on it.”

The federal government got involved in May 2004 when President Bush issued Executive Order 13340, directing his cabinet to establish the Great Lakes Interagency Task Force and promote a “regional collaboration of national significance” for the Great Lakes. The Great Lakes Regional Collaboration, as the task force was known, spent the next 19 months studying regional needs such as cleaning up toxic hot spots, stopping invasive species, repairing aging sewer infrastructure, and restoring wetlands. It presented its recommendations in December 2005. The price tag: $26 billion.

Twenty-six billion dollars is a daunting sum, but for people who hope to see the North Coast reach its potential, it’s money well spent. “It’s an important and big investment,” Austin says. “A $26-billion cleanup program and sewer infrastructure-rebuilding program means $80 billion to $100 billion of economic development in the Great Lakes. For southeast Michigan itself, following through on this program … will mean $3.7 billion to $7 billion in economic-development benefits. That’s serious money for southeastern Michigan and Detroit. It’s money short-term, as people are put to work engineering and designing and building sewer systems, and it’s long-term by having new economic development on the waterfront.”

It has tremendous economic spinoff for the region, says Vicki Barnett, former mayor of Farmington Hills and immediate past president of the Michigan Municipal League. “A $20-billion federal investment would feed all the needs of the Great Lakes coastline-restoration project for eight states, and that would immediately return in increased property values, recreation, clean water, and the positive environmental impact,” she says. “If you can spend $20 billion today and get $50 billion within three to five years, that’s a good expenditure of public money. There [are] huge benefits in the longer term, so I’m just talking about a quick response here.” Such a return would be welcomed by Barnett, who’s impatient with Michigan’s role as a “donor” state (receiving 92 cents back for every dollar it sends to Washington, according to the Tax Foundation).

Of course, the key to unlocking $26 billion in federal and state funding is to become immersed in the political process. “We have a good opportunity, given that it’s a presidential election year,” Austin says. “The election in our country is determined by the states that touch the Freshwater Coast — Ohio, Pennsylvania, Wisconsin, Minnesota, and [Michigan]. We have succeeded collectively in asking the presidential candidates … will you follow through on that cleanup program as you’re seeking votes [in this region]? The [two] that are left have said yes, they will, as president.”

John McCain and Barack Obama have both signed candidate pledges that state, in part, “I recognize that investing in the restoration of the Great Lakes is not only sound environmental policy, but also has significant economic benefits for the region and the country.” The candidates pledged to appoint a cabinet-level official to oversee all Great Lakes restoration policies and to include “significant” funding in their annual budgets to address beach closures and sewer overflows, cleanup of toxic sediments, restoration of wetlands, and prevention of new invasive species.

“The pledge in writing is, of course, important because it puts them on the record,” says Andy Buchsbaum, director of the National Wildlife Federation’s Great Lakes Natural Resource Center. “Even more important was when, during the Michigan primary, each one of those candidates talked to reporters repeatedly about their commitment. The candidates did it themselves; it wasn’t just their campaign staff signing a document. They were personally engaged in it.”

In the meantime, the $26-billion Great Lakes Collaboration Implementation Act, co-sponsored by Sen. Carl Levin, D-Mich., and nine other senators, including Barack Obama, which puts in place many of the recommendations from the Great Lakes Regional Collaboration Strategy, was referred to the Senate Environment and Public Works Committee in March 2007. A companion bill in the U.S. House of Representatives was also introduced in March 2007 and was referred to the House Subcommittee on Fisheries, Wildlife, and Oceans later that month. Both bills still await action.

Environmental cleanup is a very visible and emotional issue, and certainly one that John Austin counts as a major “to-do” in making the Freshwater Coast a reality. Of the other major initiatives Austin recommends in his Brookings research, “re-purposing” how Michigan invests in new technologies is near the top. His research for the Brookings Institution also recommends shifting federal R&D dollars away from Cold War-era laboratories to universities to develop “next-generation” energy technologies in Michigan and attracting venture capital to fuel innovation in the region.

“Federal policy that supports and accelerates that kind of investment is probably No. 1,” he says. “No. 2 is some of the very tangible ways we can add deeper capital pools. We create lots of inventions here in our research universities and in our private sector. If we had more venture money and capital here, and there are ways we could steer pensions and other funds to support that, that could help us keep and create new businesses here versus letting them go where the venture money is.”

An Extreme Makeover: Freshwater Coast Edition is certainly seductive, but some observers wonder if it’s just another “program du jour” in the mad scramble to reinvent the state. “I think it’s possible as a component to a larger strategy,” says Wayne State University marketing professor Jeff Stoltman, who studies consumer behavior and leisure trends. “I’m skeptical that the region or the state could move with a high rate of success into that repositioning.”

Stoltman says when he considers Michigan’s brutal winter weather and his belief that the people who are attracted to a coastal lifestyle have already found a place to enjoy it, he questions how broad the appeal is. “Unless something tilts toward Michigan and the Midwest generally — and it might be this water shortage that everybody is forecasting … I don’t know how much our natural resources tip the balance in our favor.”

“If the job market isn’t growing and stable, if the quality of life is materially not as good in a number of other categories, I don’t know if that tips everything in favor of relocating to Michigan.”

Stoltman cautions against thinking that people will flood into the state if only they could see Saginaw Bay (once the beach muck is removed). “What [brings] somebody from San Jose … to Michigan isn’t just a wonderful coastal community; it’s a coastal community that has a very robust, growing economy, jobs, infrastructure, schools, all of those things. It’s that string of pearls that you have to put out there and oh, by the way, Seattle is putting its string of pearls out there and [so is] Cincinnati.”

He’s realistic when it comes to the challenges Michigan faces, but not hopeless. “I think this might be our best shot — trying to find and buff those pearls to a high shine and putting them together in a beautiful setting makes sense, but we’re going to have to stick to something. Is it going to be the aerotropolis? Is it going to be life sciences? What’s it going to be?”

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